Module-I

Entrepreneurship:
Entrepreneurship is the art of starting a business, basically a start-up company offering
creative product, process or service. We can say that it is an activity full of creativity. An
entrepreneur perceives everything as a chance and displays bias in taking decision to exploit
the chance.
An entrepreneur is a creator or a designer who designs new ideas and business processes
according to the market requirements and his/her own passion. To be a successful
entrepreneur, it is very important to have managerial skill and strong team building
abilities. Leadership attributes are a sign of successful entrepreneurs. Some political
economists regard leadership, management ability, and team building skills to be the
essential qualities of an entrepreneur.
Definition: Entrepreneurship is the process of developing, organizing, and running a new
business to generate profit while taking on financial risk. An entrepreneur is a person who
starts a new business and usually risks his own money to start the venture. Examples of
well-known entrepreneurs include Bill Gates, Steve Jobs, Mark Zuckerberg.
Schumpeter is believed to be the first scholar to introduce the world to the concept—or
at least, the economic significance of—entrepreneurship.
Concept: 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.
In economics, entrepreneurship connected with land, labour, natural resources and capital
can generate a profit. The entrepreneurial vision is defined by discovery and risk-taking
and is an indispensable part of a nation’s capacity to succeed in an ever-changing and more
competitive global marketplace.
Meaning of Entrepreneur:
The entrepreneur is defined as someone who has the ability and desire to establish,
administer and succeed in a start-up 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.
It can be classified into small or home business to multinational companies. In economics,
the profits that an entrepreneur makes is with a combination of land, natural resources,
labour and capital.
In a nutshell, anyone who has the will and determination to start a new company and deals
with all the risks that go with it can become an Entrepreneur.
What are the 4 Types of Entrepreneurship?
It is classified into the following types:
 1) Small Business Entrepreneurship-
These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter,
plumber, electrician, etc. These people run or own their own business and hire family
members or local employee. For them, the profit would be able to feed their family and
not making 100 million business or taking over an industry. They fund their business by
taking small business loans or loans from friends and family.
2) Scalable Start-up Entrepreneurship-
This start-up entrepreneur starts a business knowing that their vision can change the
world. They attract investors who think and encourage people who think out of the box.
The research focuses on a scalable business and experimental models, so, they hire the best
and the brightest employees. They require more venture capital to fuel and back their
project or business.
3) Large Company Entrepreneurship-
These huge companies have defined life-cycle. Most of these companies grow and sustain
by offering new and innovative products that revolve around their main products. The
change in technology, customer preferences, new competition, etc., build pressure for large
companies to create an innovative product and sell it to the new set of customers in the
new market. To cope with the rapid technological changes, the existing organisations
either buy innovation enterprises or attempt to construct the product internally.
4) Social Entrepreneurship-
This type of entrepreneurship focuses on producing product and services that resolve
social needs and problems. Their only motto and goal is to work for society and not make
any profits.
Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make
entrepreneurship successful. A few of them are mentioned below:
 Ability to take a risk- Starting any new venture involves a considerable amount of
failure risk. Therefore, an entrepreneur needs to be courageous and able to evaluate
and take risks, which is an essential part of being an entrepreneur.
 Innovation- It should be highly innovative to generate new ideas, start a company
and earn profits out of it. Change can be the launching of a new product that is
new to the market or a process that does the same thing but in a more efficient and
economical way.
 Visionary and Leadership quality- To be successful, the entrepreneur should have
a clear vision of his new venture. However, to turn the idea into reality, a lot of
resources and employees are required. Here, leadership quality is paramount
because leaders impart and guide their employees towards the right path of success.
 Open-Minded- In a business, every circumstance can be an opportunity and used
for the benefit of a company. For example, Paytm recognised the gravity of
 demonetization and acknowledged the need for online transactions would be more,
so it utilised the situation and expanded massively during this time.
 Flexible- An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace
change in a product and service, as and when needed.
 Know your Product-A company owner should know the product offerings and
also be aware of the latest trend in the market. It is essential to know if the available
product or service meets the demands of the current market, or whether it is time
to tweak it a little. Being able to be accountable and then alter as needed is a vital
part of entrepreneurship.
Importance of Entrepreneurship:
 Creation of Employment- Entrepreneurship generates employment. It provides an
entry-level job, required for gaining experience and training for unskilled workers.
 Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.
 Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and
promotes facilities like higher expenditure on education, better sanitation, fewer
slums, a higher level of homeownership. Therefore, entrepreneurship assists the
organisation towards a more stable and high quality of community life.
 Increase Standard of Living- Entrepreneurship helps to improve the standard of
living of a person by increasing the income. The standard of living means, increase
in the consumption of various goods and services by a household for a particular
period.
 Supports research and development- New products and services need to be
researched and tested before launching in the market. Therefore, an entrepreneur
also dispenses finance for research and development with research institutions and
universities. This promotes research, general construction, and development in the
economy.
Q1 Who is the father of entrepreneurship?
Joseph Alois Schumpeter is regarded as the father of entrepreneurship. He introduced the
concept of entrepreneurship.
Q2 What are the key concepts of entrepreneurship?
The 4 key concepts of entrepreneurship are as follows:

1. Innovation
2. Risk taking
3. Vision
4. Organisation
Q3 what are entrepreneur traits?
Some of the most important entrepreneurial traits are:
 1. Passion
2. Risk taking ability
3. Persisting nature
4. Innovative
5. Leading from the front
6. Ethical in nature

Entrepreneurial Competencies
If you want to become a successful entrepreneur, you probably already have a pretty
good idea of the skills you’ll need. Vision, initiative, sales, planning, finance, strategy,
and branding are among the most commonly mentioned. All of those are incredibly
important, but they’re not the end of the list. There are a few other unexpected skills
that entrepreneurs will need to succeed, you just might not be thinking about them
yet. Here are seven unexpected business skills all entrepreneurs must master.

1. Communication
For internet, it’s much easier these days to conduct the majority of your business from
your computer, without really interacting with anyone face-to-face. It’s surprisingly
challenging to deliver the kind of message and tone you want through email, phone
communication, and social media. Entrepreneurs today have to make extra effort to
communicate effectively online in order to build the relationships that would have
once happened organically in person. If you’re unable to express yourself and your
expectations clearly, it can affect your staff’s productivity or ability to deliver what
you’re looking for. Today’s entrepreneur needs to be able to write clear instructions
and use increasingly distant communication channels to network and build
relationships.

2. Curiosity
If you’re not interested in learning, it’s almost impossible to succeed as a modern -day
entrepreneur. Those who really thrive are the ones who make genuine efforts to learn
new technologies and methods to keep their business on the cutting edge. Every
entrepreneur needs the skill of curiosity, which drives them to learn as the playing
field changes.

3. The Ability to Inspire Others

No one can doubt that an entrepreneur is passionate about their work. But it’s the
ability to install that inspiration in others that really drives success. In some ways, this
is an extension of the communication skill. You need to be able to explain things in
an understandable way, then take it a step further to make the project resonate with
your team. Even if you’re a self-professed “solopreneur,” there’s no way you’re really
doing every task on your own. If you can get others excited about your work, the
momentum created can be huge.

4. Stress Management
An entrepreneur is not just the boss, they have an active hand in a lot of different
areas of a business, to keep things running smoothly and cope with potential setbacks
and failures along the way. Anyone could get burned out in that environment, which
might be why research has shown that entrepreneurs tend to have higher instances of
mental health issues than the general population. Any entrepreneur who wants to
succeed long-term must be very good at stress management.

5. Consumer Focus
Digital marketing has changed the game for a lot of entrepreneurs. So much of success
is now contingent upon understanding the needs of consumers and finding ways to
meet them with your business. Entrepreneurs need to work to really understand the
mentality of the people who make their business possible, then cater your products,
services, policies, and marketing campaigns to those people.

6. Adaptability
Now more than ever it’s important to have the skill of adaptability, the ability to
change your approach. As new technologies and services enter the market, they can
vastly change the landscape in a matter of months. Just think of the impact of Google
algorithm updates on businesses. Even huge brands like Mozilla, BBC, and Overstock
suffered the consequences and had to make major changes to begin to recover. Great
entrepreneurs must be comfortable going with the flow and making quick business
decisions to minimize the impact of such a fast-moving marketplace.

7. Vision
Having a clear market niche is essential for a business to grow, but many entrepreneurs
make the mistake of over-focusing on their own corner of the business world. The
entrepreneurs who genuinely understand markets, what makes a successful company,
business management standards, and opportunities when they see them, those are the
ones with the potential for exponential growth.

Functions of Entrepreneurship
The various functions of entrepreneurship are Innovation and creativity, Risk taking
and achievement and organization and management, Catalyst of Economic
Development, Overcoming Resistance to Change and Research. These have been
depicted, at a glance, with the help of the given Figure and are being discussed, in
brief, below.
(i) Innovation and Creativity – Innovation generally refers to changing processes or
creating more effective processes, products and ideas. For businesses, this could mean
implementing new ideas, creating dynamic products or improving your existing
services. Creativity is defined as “the tendency to generate or recognize ideas,
alternatives, or possibilities that may be useful in solving problems, communicating
with others. Creativity and innovation have always been recognized as a sure path to
success. Entrepreneurs think outside of the box and explore new areas for cost-
effective business solutions.

(ii) Risk taking and Achievement – Entrepreneurship is a process in which the

entrepreneur establishes new jobs and firms, new Creative and growing organization
which is associated with risk, new opportunities and achievement. It results in
introducing a new product or service to society. In general, entrepreneurs accept four
types of risks namely Financial Risk, Job Risk, Social & Family Risk & Mental &
Health Risk, which are as follows:

(a) Financial Risk – Most of entrepreneurs begin by using their own savings
and personal effects and if they fail, they have the fear of losing it. They take risk of failure.

(b) Job Risk – Entrepreneurs, not only follow the ideas as working situations,
but also consider the current risks of giving up the job & starting a venture. Several
entrepreneurs have the history of having a good job, but gave it up, as they thought that
they were not cut out for a job.

(c) Social and Family Risk – The beginning of entrepreneurial job needs a
high energy which is time consuming. Because of these undertakings, he/she may confront
some social and family damages like family and marital problems resulting on account of
absence from home and not being able to give adequate time to family.
 (d) Mental Health Risk – Perhaps the biggest risk that an entrepreneur takes
it is, the risk of mental health. The risk of money, home, spouse, child, and friends could
be adjusted but mental tensions, stress, anxiety and the other mental factors have many
destructive influences because of the beginning and continuing of entrepreneurial activity.
This can even lead to depression, when faced with failure.

(iii) Organization and Management – The entrepreneurial organization is a simple

organizational form that includes, one large operational unit, with one or a few individuals
in top management. Entrepreneurial management means the skills necessary to successfully
develop and manage a business enterprise. A small business start-up under an owner-
manager is an example of an entrepreneurial organization. Here, the owner-manager
generally maintains strict control over business operations. This includes directing the
enterprise’s core management functions. According to Mintzberg, these include
the interpersonal roles, informational roles and decision-making roles. The smaller the
organization, the more concentrated these roles are in the hands of the owner-manager.
The entrepreneurial organization is generally unstructured.

(iv) Research – An entrepreneur is a practical dreamer and does a lot of ground-work

before taking a leap in his/her ventures. In other words, an entrepreneur finalizes an idea
only after considering a variety of options, analysing their strengths and weaknesses by
applying analytical techniques, testing their applicability, supplementing them with
empirical findings, and then choosing the best alternative. It is then that he/she applies
the ideas in practice. The selection of an idea, thus, involves the application
of research methodology.

(v) Overcoming Resistance to Change – New innovations are generally opposed by people
because it makes them change their existing behaviour patterns. An entrepreneur always
first tries new ideas at his/her level. It is only after the successful implementation of these
ideas that an entrepreneur makes these ideas available to others for their benefit. His/her
will power, enthusiasm and energy help him/her in overcoming the society’s resistance to
change.

(vi) Catalyst of Economic Development – An entrepreneur plays an important role in

accelerating the pace of economic development of a country, by discovering new uses of
available resources and maximizing their utilization. Today, when India is a fast
developing economy, the contribution of entrepreneurs has increased multi-fold.

Process/Steps involved in Entrepreneurship

Entrepreneurship is the act and art of being an entrepreneur or one who undertakes
innovations or introducing new things, finance and business acumen in an effort to
transform innovations into economic goods. The most obvious form of entrepreneurship
is that of starting new businesses. In more recent times, the term entrepreneurship has been
extended to include elements not necessarily related to business formation activity, but it
also includes specific forms of social entrepreneurship, political entrepreneurship, or
knowledge entrepreneurship.

Following are the steps involved in the entrepreneurial process. This entrepreneurial
process is to be followed, again and again, whenever any new venture is taken up by an
entrepreneur, therefore, it is an ever ending process.

(i) Search for a new Idea – An entrepreneurial process begins with the idea generation,
wherein the entrepreneur identifies and evaluates the business opportunities before
him/her.

(ii) Preliminary assessment of Idea – The identification and the evaluation of

opportunities is a difficult task, therefore, an entrepreneur seeks inputs from all the
persons including employees, consumers, channel partners, technical people, etc. to reach
to an optimum business opportunity. Once the opportunity is decided, the next step is to
evaluate it.

(iii) Detailed analysis of promising Idea – An entrepreneur can evaluate the efficiency of
an opportunity by continuously asking certain questions such as, whether the opportunity
is worthy of investing, its attractiveness, proposed solutions feasibility, chances of
competitive advantage & various risks associated with it etc. Above all, an entrepreneur
must analyse his/her personal skills & capabilities to ensure realisation of entrepreneurial
Goals.

(iv) Selection of the most promising Idea – Once the analysis is done at both macro &
micro level, then the entrepreneur selects the best possible option amongst the chosen few,
on the basis of the key factors identified by him/her before idea generation.

(v) Assembling the Resource and Personnel – The next step in the process is resourcing,
wherein, the entrepreneur identifies the sources from where the finance and the human
resource can be arranged. Here, the entrepreneur finds the investors for its new venture
and the personnel to carry out the business activities.

(vi) Determining size of unit – On the basis of the ability to manage resources, the
entrepreneur determines the initial size of the business and the possibilities of expansion.

(vii) Deciding location of Business & Planning Layout – This is a significant decision.
Entrepreneur should ideally decide the location where there are Tax holidays & cheap
labour & material are available in abundance.

(viii) Sound Financial Planning – Once the funds are raised and the employees are hired,
business location and layout have been finalised, then efforts are made to do sound
financial planning with the available financial resource in order to put it to optimum use.
(ix) Launching the Enterprise – Launching the enterprise by an entrepreneur can be a
daunting adventure as the entrepreneur needs to stay focused and should always be open
to suggestions. If he/she is mission-driven entrepreneur, it must be remembered that
building a truly great company is a marathon, not a sprint.

(x) Managing the Company – Once the funds are raised and the employees are hired, the
next step is to initiate the business operations to achieve the set goals. First of all, an
entrepreneur must decide the management structure or the hierarchy, which is required to
solve the operational problems, as and when they arise.

(xi) Harvesting – The final step in the entrepreneurial process is harvesting, wherein, an
entrepreneur decides on the future prospects of the business, such as its growth and
development. Here, the actual growth is compared against the planned growth and then
the decision regarding the stability or the expansion of business operations are taken.

The risks of entrepreneurship

The business environment is dynamic. Despite all the planning and risk management,
some unforeseen situations expose businesses to several risks. A businessman doesn’t
follow a unique or original path. An entrepreneur, who creates their own path, comes up
with an invention to introduce an entirely new product, or they bring innovation to
existing ones. There are a number of risks involved in entrepreneurship. One of the most
common risks that entrepreneurs take is leaving a stable job to pursue their dream of
carrying out a successful business. Therefore, compared to businessmen, entrepreneurs are
exposed to different types of entrepreneurial risks. This is the reason why entrepreneurs
in general are considered risk-takers.

1. Financial Risk
An entrepreneur will need funds to launch a business either in the form of loans from
investors, their own savings, or funds from family. The founder will have to put their
own "skin in the game." Any new business should have a financial plan within the overall
business plan showing income projections, how much cash will be required to break even,
and the expected return for investors in the first five-year timeframe. Failure to accurately
plan could mean that the entrepreneur risks bankruptcy, and investors get nothing.

2. Strategic Risk
An impressive business plan will appeal to investors. However, we live in a dynamic and
fast-paced world where strategies can become outdated quickly. Changes in the market
or the business environment can mean that a chosen strategy is the wrong one, and a
company might struggle to reach its benchmarks and key performance indicators (KPIs).

3. Technology Risk
New technologies are constantly emerging, particularly in the era of the Fourth Industrial
Revolution. Some of these changes are characterized as "paradigm shifts" or "disruptive"
technologies. To be competitive, a new company may have to invest heavily in new
systems and processes, which could drastically affect the bottom line.

4. Market Risk
Many factors can affect the market for a product or service. The ups and downs of the
economy and new market trends pose a risk to new businesses, and a certain product
might be popular one year but not the next. For example, if the economy slumps, people
are less inclined to buy luxury products or nonessentials. If a competitor launches a similar
product at a lower price, the competitor might steal market share. Entrepreneurs should
perform a market analysis that assesses market factors, the demand for a product or
service, and customer behaviour.

5. Competitive Risk
An entrepreneur should always be aware of its competitors. If there are no competitors
at all, this could indicate that there is no demand for a product. If there are a few larger
competitors, the market might be saturated, or, the company might struggle to compete.
Additionally, entrepreneurs with new ideas and innovations should protect intellectual
property by seeking patents to protect themselves from competitors.

6. Reputational Risk
A business's reputation is everything, and this can be particularly so when a new business
is launched and customers have preconceived expectations. If a new company disappoints
consumers in the initial stages, it may never gain traction. Social media plays a huge role
in business reputation and word-of-mouth marketing. One tweet or negative post from a
disgruntled customer can lead to huge losses in revenue. Reputational risk can be managed
with a strategy that communicates product information and builds relationships with
consumers and other stakeholders.

7. Environmental, Political, and Economic Risk

Some things cannot be controlled by a good business plan or the right insurance.
Earthquakes, tornadoes, hurricanes, wars, and recessions are all risks that companies and
new entrepreneurs may face. There may be a strong market for a product in an under-
developed country, but these countries can be unstable and unsafe, or logistics, tax rates,
or tariffs might make trade difficult depending on the political climate at any point in
time. Also, some business sectors have historically high failure rates, and entrepreneurs in
these sectors may find it difficult to find investors. These sectors include food service,
retail, and consulting.

8. Compliance Risk
When an entrepreneur plans to start their operations in a country, they have to be wary
of the laws of the land. A company has to abide by existing laws and adapt to the changing
legal environment in the future as well. This is one of the significant entrepreneurial
risks that an entrepreneur may face. Any law framed in favour of or against an industry
can change the trajectory of its success.

9. Operational Risk
This entrepreneurial risk arises when a company is unable to carry out routine business
activities efficiently. As a result, overall productivity of an enterprise declines. This could
be due to people failure or process failure as well. External events like natural disasters can
also impact the operational efficiency of a company.

Entrepreneurial Values and Attitudes

In a civilized society, qualities like honesty, truthfulness, cooperation, integrity etc are
important for happy and healthy living. They are a set of beliefs or ideas that provide
standards which guide behaviour. Such guiding principles established in a cultured society
are called values. Entrepreneurs, by the root characteristic of their innovative spirit and
creativity, are capable of spotting and opportunity and initiating a change. They’re never
satisfied with the existing products or services and always strive to introduce better
products or services by making the existing ones obsolete.

While explaining human behaviour, one often comes across the terms values and attitudes.
Rather than attempting to distinguish between these two terms, it would be sufficient to
say here that taken together, entrepreneurial values and attitudes refer to the behavioural
choices individuals make for success in entrepreneurship. The word ‘choice’ is important,
as there are alternative ways of behaving too. Be it the decision to make a choice about
entrepreneurship as a career, be it the decision to choose the product line, growth strategy,
profit making and social responsibility you would be required to make choices. The choice
that you make may have a tremendous impact on your performance. What we do here is
to profile some of the dimensions relating to starting and managing a business and the
associated behavioural alternatives, we have considered here two to keep the things simple.
We have highlighted those alternatives that have been generally observed to be associated
with superior performance.

Entrepreneurial Values Entrepreneurship is considered to be a value-driven process, as

there is a higher chance of the entrepreneur to be motivated to sustain the business in the
long run. Entrepreneurial values are some key values and beliefs that entrepreneurs are seen
to have and that have influenced or encouraged entrepreneurial behaviour. These deeper
beliefs influence one’s decision 5 making and opinions. An entrepreneur needs to balance
between personal, professional and social values.

1. Personal values for an entrepreneur include passion, honesty, integrity, determination,

confidence, wisdom, cooperation, decisiveness, humility etc. These values are reflected
in a person’s personality and in their perception about certain things. No one really
 likes to do business with someone who is dismissive, arrogant, egoistic, argumentative
and dishonest.
2. Professional values correspond how an entrepreneur conducts himself or herself in the
professional business and workplace environment. Ethics in the business world are also
the domain of professional values. Professional values guide entrepreneurs towards
being an effective team leader. Some professional values include advancement, balance,
authority, leadership, competitiveness, efficiency, opportunity, ethical practice,
resourcefulness, excellence etc. These values encourage self-determined action in a
professional setting.
3. Social values are values that make entrepreneurs look beyond the core business and
have a bigger purpose. These values are what drive entrepreneurs to make the business
socially acceptable. In terms of business, social values also influence the objectives of
business and the manner in which business matters should be carried out. Some social
values an entrepreneur must possess include change, creativity, fairness, kindness,
patriotism, empathy etc. This encourages entrepreneurs to take action that benefit the
society as well.

Some entrepreneurial values are as follows:

a) Independence: Entrepreneurs need to be independent to savour the sense of

achievement. It creates a very strong and positive ego and enables the
entrepreneur to develop a mission concept to achieve their goal. This trait of
self-reliance and self-sufficiency serves as an important asset for the
entrepreneur to increase their confidence and courage to innovate.
b) Respect for work: An entrepreneur cannot succeed if he/she does not respect
and values their work. It is important for an entrepreneur to work hard and
keep trying different alternatives to sustain and grow their venture. This
encourages the entrepreneur to keep pursuing a career path in which rewards
and incentives are dependent on the amount and quality of hard work and effort
put in.
c) Respect for others: Mutual respect towards others and one’s employees is an
important value for entrepreneurs. This also includes value for their work, time
and effort. It enables the entrepreneur to appreciate others’ efforts, relate
effectively to vendors, employees and community, build long-lasting and
healthy relations and increases their self-esteem as well.
d) Trust: Usually overlooked in a professional setting, trust plays a key role for an
entrepreneur in different aspects of life. An entrepreneur must trust their own
vision or goal, develop mutual trust with employees, make customers trust his
product/service, develop a trustworthy relationship with vendors etc.
e) Honesty: An entrepreneur must be honest in financing the company and
managing the assets of the firm. Honesty, which emanates from decisiveness in
taking risks and making choices, lets the entrepreneur avoid false security and
stay calm amid confusing situations. An ethical entrepreneur is always driven
by honesty.
f) Vision: Vision guides the entrepreneur through the business planning process,
clarifying the opportunity and setting goals for the organization. Vision allows
the entrepreneur to see past his or her current position and beyond limited
resources to more fully appreciate the potential of the venture.
g) Outstanding performance: Entrepreneurs are always ready to face and resolve
the challenges. They set for themselves certain standards of outstanding
performance and excellence and can deal with unexpected obstacles with
confidence. Most companies experience three or four life-threatening crises in
their early years; to survive this period, the true entrepreneur deals with these
crises and wins through.
h) Initiative and ownership: Entrepreneurs derive great satisfaction by taking
initiative and in their sense of ownership. They take initiative to do many things
and commit to executing tasks. This gives them a sense of complete
identification and encourages them to learn from their own decisions.
i) Creativity and innovation: Entrepreneurs value creativity as they constantly
have to use their imagination or original ideas to create something new.
Similarly, they like to innovate in a lot of aspects of the business by making
small incremental changes.

In any civilized society, values and qualities like truthfulness, honesty, harmony,
integrity etc. as given high regard for a healthy, peaceful and happy living. As we
are aware, these beliefs that serve as standards and influence behaviour are known
as values. Since entrepreneurs also share some of these beliefs and qualities that
guide and direct certain behaviour in them, they are termed as entrepreneurial
values.

Entrepreneurial Attitudes: Entrepreneurs often exhibit certain attitudes. Similarly,

some attributes related to one’s attitude are needed to have the right mind set for
achieving entrepreneurial success.

Some of these are as follows:

 Use imagination: In entrepreneurship, use of imagination and creativity

provides a structure to entrepreneurs to think out of the box, consider
alternatives, try unconventional ways to do things and continuously
improvise and iterate.
 Take moderate risks: Moderate risk takers are those entrepreneurs who are
often characterized as willing to assume a moderate amount of risk in
business, being neither overly conservative nor likely to gamble.
 Look for economic opportunities: The trends in industries and businesses
keep changing. In various situations, entrepreneurs can feel uncomfortable
when implementing a needed change in people, technology, product,
mission, etc. An entrepreneur has to step out of his or her comfort zone and
focus on pursuing and trying different economic opportunities. They must
continuously.
 Enjoy freedom of decision making and action: If an entrepreneur does not
decide to take a particular action, the action will not happen. Entrepreneurs
have to decide to do something and then do that. This is the logical process
of how they can take action.
 Analyse situations and plan actions: Part of having an entrepreneurial
attitude is to assess and analyse situations, understand challenges given the
situation and plan action steps accordingly. Entrepreneurs must not be
afraid to plan and take real action. Planning and executing actions are
something that can lead to successful and timely business activity.
 Be able to deal with fear: No one can live without experiencing fear.
Knowing this truth will enable you deal with fear. In business, many
challenging tasks can create pressure and instil fear in an entrepreneur, such
as repaying a loan, launching a new product, losing employees etc. It is
important for an entrepreneur to overcome the fear and take the leap.
 Accept feedback and criticism positively: Constructive feedback can prove
to be extremely valuable for entrepreneurs. Many times, customers, industry
partners, consultants etc. might criticize the idea or a certain action. An
entrepreneur must always be open to this and take it positively rather than
getting demotivated or negative about it.
 Get involved in all activities: An entrepreneur cannot afford to procrastinate
or be laid back. While planning helps, it is important for an entrepreneur
to make timely decisions. Even when there are ups and downs while building
the business, it is important to rebound from the setbacks and keep moving
forward. For this, an entrepreneur needs to be involved in all activities.
 Have clarity of purpose: When an entrepreneur has clarity of purpose,
he/she will always have the confidence to execute. Without clarity of
purpose, an entrepreneur cannot inspire staff, or potential clients, or even
vendors.
 Believe the change you want to bring: Self-believe and faith is an important
part of an entrepreneurial attitude. This is because getting bogged down by
things can come inevitably to the entrepreneur. It is imperative for one to
believe in one's own self, in one's vision, in one’s company, and in one’s
 people. This confidence helps to keep employees, stakeholders, customers
and suppliers believe in the business and its mission as well.
 Be passionate: Passion is key for entrepreneurial success, because one cannot
deal with frustrating situations or overcome challenges if one does not feel
passionate about the business. This also helps to persuade others to stay
motivated. Most successful entrepreneurs feel passionate about their ideas,
daily tasks, creations and goals.
 Be flexible: Sudden adversities, changes and hurdles are a part of
entrepreneurial journey. An entrepreneur has to maintain a positive attitude,
be open and flexible to uncertainty and adversity. An entrepreneur must be
able to make relevant changes and act quickly during unexpected situations.
 Do not be egoistic: Keeping one’s ego under control when it comes to
managing employees, building partnerships and taking advice, is important.
It is not necessary to impress others every time but one must be open to
hearing out new suggestions and ideas even if they don’t make sense in the
first go.
 Strong work ethic: Work ethic is a set of moral principles an entrepreneur
uses in their work. A strong work ethic helps to produce high-quality work
consistently and the output motivates them to stay on track.

Entrepreneur Skills: Definition

While becoming a successful entrepreneur is natural for some, others require certain
essential skills to start and lead a business to success. These skills determine your
entrepreneurial success. Successful entrepreneurs have mastery over both hard and soft
skills. Hard skills like accounting, marketing and financial planning are critical for running
and managing a business and soft skills like communication, problem-solving and decision
making help you scale up your business. Mastery of entrepreneur skills requires practice
and a dedicated learning plan.
What are entrepreneur skills?
Entrepreneur skills include various skill sets such as leadership, business management, time
management, creative thinking and problem-solving. You can apply these skills in many
job roles and industries. These entrepreneur skills are vital for promoting innovation,
business growth and competitiveness. Developing these skills means developing many
skills together. For example, to be a successful entrepreneur, you may need to develop your
risk-taking skills and sharpen your business management skills.
1. Business management skills
Business management skills are traits an entrepreneur must have to run a business and
ensure all business goals are met. Entrepreneurs with this skill set can oversee and manage
operations of different departments because they possess a good understanding of each
function. Business management skills include multitasking, delegating responsibilities and
making critical business decisions.
2. Communication and active listening skills
Every entrepreneur must be able to communicate effectively with clients, team members
and all other stakeholders. Whether through verbal communication during meetings or
sending reports and messages through emails about the project, entrepreneurs require
superior written and verbal communication. Apart from communication skills,
entrepreneurs must be excellent listeners to understand the project's requirement and
discussion during project meetings.
3. Risk-taking skills
Being able to take calculated and intelligent risks is one of the essential entrepreneur skills
to learn. Employees with an entrepreneur mind set never shy away from taking risks
because they understand that calculated risks result in tremendous success. They know
that risk is an opportunity to learn and grow a business to the next level. Employers want
candidates who can take risks in pursuit of potential gains and profit.
4. Networking skills
Networking involves building and managing relationship with other professionals to grow
and promote a business. Effective networking skills open up future opportunities and help
build a solid brand. Networking allows entrepreneurs to meet like-minded professionals,
build future teams and stay up-to-date with industry trends. It is one of the most desirable
skills for entrepreneurs because, through a solid network, they can meet professionals to
fund their ideas, access professional business expertise and get feedback on their new
venture or idea.
5. Critical thinking skills
Critical thinking is an entrepreneur skill that objectively analyses the information and
draws a rational conclusion. It helps entrepreneurs assess a situation and come up with a
logical solution. Employers look for candidates with critical thinking because it helps solve
problems and build strategies for business growth. Usually, a critical thinker is
independent, competent and reflective. This skill helps entrepreneurs logically connect
ideas, scrutinise information, evaluate arguments, find inconsistencies in work and solve
complex issues. Instead of memorising information, such candidates use the information
to deduce meaningful insights.
6. Problem-solving skills
Often, entrepreneurs face challenging and unexpected situations. It could be a venture
capitalist refusing further funding or a team member refusing to work as per the project
guidelines; an entrepreneur must possess excellent problem-solving skills to handle
stressful situations and calmly identify alternate solutions. Exceptional problem-solving
skills ensure they reach their business goal.
7. Creative thinking skills
Creativity is a valuable yet underappreciated skill in the digital world. Creative thinking is
the backbone for innovation and it forces employees to think differently. Entrepreneurs
with creative thinking skills are never hesitant to try solutions that others may overlook
because of fear of failure. Such people think out-of-the-box and always seek input from
professionals in a different field for understanding a new perspective. It is one of the most
sought-after entrepreneur skills because it allows them to see patterns (even when there
are no patterns) and develop innovative ways to solve business issues.
8. Customer service skills
Quality customer service promotes the brand and increases loyalty. Regardless of the
industry, excellent customer service skills are essential for business success. From talking
to clients to discussing funding opportunities, customer service skills help entrepreneurs
connect with their potential customers.
9. Financial skills
The ability to handle resources, assess investments, calculate ROI is a must for
entrepreneurs. Apart from this, they must know how to use accounting and budgeting
software to keep track of all the financial processes. By learning financial skills,
entrepreneurs avoid overspending and optimally allocate resources.
10. Leadership skills
Being able to inspire colleagues, empower the workforce and lead from the front requires
excellent leadership skills. Exemplary leaders lead by examples and can take a leadership
role and work as a part of a team. Entrepreneurs with leadership skills motivate their
employees, manage operations and delegate tasks to reach the business goal.
11. Time management and organisational skills
Effective time management increases productivity and organises your workspace.
Entrepreneurs with time management and organisational skills understand different ways
to prioritise tasks and avoid procrastination. For ensuring timely completion of projects,
entrepreneurs analyse their and their team's time, set time limit for each task, complete
priority tasks first, delegate work to others, create a to-do list and use technology to keep
the workspace organised.
12. Technical skills
Technical skills are hard skills that are gained by using digital tools and software.
Entrepreneurs must know how to use planning, marketing and budgeting software.
Knowledge of software helps in managing projects, tracking sales and allocating a viable
budget for the project.

Key Differences between Entrepreneur and Manager

The difference between entrepreneur and manager can be drawn clearly on the following
grounds:

1. A person who creates an enterprise, by taking a financial risk in order to get profit,
is called an entrepreneur. An individual who takes the responsibility of controlling
and administering the organisation is known as a manager.
2. An entrepreneur focuses on business start-up whereas the main focus of a manager
is to manage ongoing operations.
3. Achievements work as a motivation for entrepreneurs. On the other hand, the
primary motivation is the power.
4. The manager’s approach to the task is formal which is just opposite of an
entrepreneur.
5. An entrepreneur is the owner of the enterprise while a manager is just an employee
of the company.
6. A manager gets salary as remuneration for the work performed by him. Conversely,
profit is the reward for the entrepreneur.
7. An entrepreneur’s decisions are driven by inductive logic, courage, and
determination; that is why the decision making is intuitive. On the contrary, the
decision making of a manager is calculative, as they are driven by deductive logic,
the collection of information and advice.
8. The major driving force of an entrepreneur is creativity and innovation. As against
this, a manager maintains the existing state of affairs.
9. While entrepreneur is a risk taker, the manager is risk averse. His job is to maintain
the status quo of the company. So he cannot afford risks.

The difference between an entrepreneur and a manager are as follows:

Particulars Entrepreneur Manager

It refers to persons who They are individuals responsible

Meaning
establish a company or for administering and controlling a
 enterprise and takes a financial group of people in the company or
risk to get profits. enterprise.

They are visionaries who

Position in the convert an idea into a business. They are the employees of the
company They are the owners of the company.
company.

They focus on business start-

Focus They focus on ongoing operations.
ups.

They bear all financial and

Risk They do not bear any risks.
other risks.

They focus on starting the

They focus on the daily smooth
Focus business and expanding the
functioning of the company.
company.

Their motivation comes from the

Their key motivation is the
Motivation power that comes with the
achievements of the company.
position.

Their reward is the profit they Their reward is the salary they draw
Reward
earn from the company. from the company.
 Their approach to every problem is
They can be casual in their role
Approach formal, and they take a scientific
and have an informal approach.
approach.

They are risk-takers. They take They are risk-averse. Their job is to
Nature of
calculated risks to drive the maintain the status quo of the
decisions
company. company.

Decision The decisions tend to be

The decisions are calculative.
making intuitive.

They do not need to be

They are trained to perform tasks
Specialisation specialised in any particular
and are specialists in their domain.
trade.

Business Structures

Efficiency cannot exist without structure. Without structure, businesses would struggle to
reach that well-oiled machine status every company strives to obtain. In business, this
structure comes from ownership style. Because no business is exactly the same, there are
different types of business ownership, all with different traits that make them suited for
some companies and wrong for others. Choosing a business ownership style, also known
as a business structure, is a necessary step when starting a small business or when
reworking your current business plan.
Common types of business ownership
Let’s take a look at the types of business ownership, along with some pros and cons, to
help you figure out which one best fits your ideal structure.
1. Sole proprietorship: A sole proprietorship occurs when someone does business activities
but doesn’t register as another kind of business. There is no separate business entity,
meaning there is no distinction between the business owner’s personal and
professional assets and liabilities.
Sole proprietorships are simple, easy to start, and one of the most common types of
business ownership. They are a good option for someone starting a low-risk business on
a trial basis. Also, no additional taxation! However, because there is no formal separation,
the business owner will become personally liable for any obligation the business might
have.

2. Partnership: Similar to sole proprietorships, a partnership is the simplest type of

business ownership when two or more people are involved. There are two kinds: limited
partnerships and limited liability partnerships. This term liability is being thrown around
quite a bit, so let’s define the types of liabilities we will be looking at when discussing
business ownership:
Liability: being responsible for something by law
Limited liability: a person’s liability is limited to a fixed sum, which usually reflects their
investment in the business
Unlimited liability: there is no limit to the liability and the owners take full responsibility
for the companies’ debts

A limited partnership has one partner with unlimited liability while everyone else involved
has limited liability. With limited liability, comes limited control. Since being a partner
with limited liability is less of a risk, they get less say in decision-making processes. A
limited liability partnership has only one class of owners, meaning there is no partner with
the risk, and power, of unlimited liability. A limited liability partnership shares the liability
among the owners, protecting them from the mistakes of their partners. Neither of these
partnership types pays additional taxes.
3. Limited liability company: Not to be confused with a limited liability partnership, a
limited liability company (LLC) separates the owner’s personal and professional assets.
Meaning if your business gets hit with a lawsuit or goes bankrupt, your house, car, and
personal piggy bank are safe.
Similar to sole proprietorships and partnerships, LLCs do not pay additional federal
income taxes or those associated with being a corporation. However, depending on their
location, they might be subject to other state taxes. Also, LLCs fall under the category of
self-employment, so those taxes fall on them as well. An LLC is a good choice for a
business owner willing to take a little bit of a bigger risk or one looking to protect their
personal assets.

4. Corporations: There are actually a few separate types of corporations, and each one has
something that makes it a little different.
 C corporation
A C corporation, or just a regular corporation, is its own entity kept separate from its
owners. This means they offer the most protection in terms of personal liability.
Corporations have an advantage when it comes to funding: stock. A stock is a partial share
in a company, so when people buy stock, they are essentially buying ownership and
decision-making responsibilities. However, starting a corporation costs more than any
other business structure. Not only are they legally required to do keep more records and
release more reports, but they also pay income tax. In some cases, there is even double
taxation - once on profits, and then again on the dividends distributed to stockholders.
With so many different stakeholders contributing to the same business, corporations
become solid. If someone leaves, the business remains relatively unaffected. A corporation
is a good structure for a business owner looking for a little more risk, good funding
options, and the prospect of eventually “going public,” which means the company will
eventually sell stock to the public.

 S corporation
An S corporation, or S corporation, is a type of corporation that is meant to avoid the
double taxation that hits normal C corporations. To become an S corporation and avoid
that taxation, you file a special election. Once the business is officially an S corporation,
it is no longer taxed on profits. Instead, all profits, and losses, are passed on to the
stockholders. However, this is not possible everywhere. There are certain states that tax
above a certain limit and some just tax them like a C corp. Becoming an S corporation
isn’t possible for everyone. If you have more than 100 stakeholders and any stakeholders
that aren’t citizens of the United States, you are out of luck. You can find other S
corporation criteria here.

 B Corporation
Benefit corporations, or B corps, have missions similar to non-profit organizations, but
they are, in fact, a for-profit corporation. Their stakeholders have the goal of providing a
public benefit, but they also want to see a profit. Certain state governments also want to
see that public benefit; some require B corps to submit benefit reports that prove they are
contributing to the good of the public. Even though they might have different purposes,
B corps are not taxed differently form C corps.

 Close corporation
A close corporation resembles the structure of a B corp. A lot of the rules associated with
smaller companies also apply to close corporations. With other types of corporations,
anyone can own stock. If there is stock available and they have the money, it’s theirs. This
is where close corporations differ: the stocks are owned by people that are closely related
to the business. Stockholders in close corporations benefit from liability protection while
also being free of reporting requirements and pressure from shareholders that don’t know
much about the business.

 Non-profit Corporation
Non-profit corporations work in charity, education, religion, literature, or science. Because
they exist to serve the common good, non-profit corporations do not pay any state or
federal taxes on their income. To obtain this tax-exempt status, non-profit corporations
must register with their state, follow similar rules to standard C corporations, and all
money must go back into the organization. In other words, profits can’t be distributed to
the members of the organization. This does not mean non-profits do not pay their
employees.

5. Cooperative:
A cooperative is a private business owned and operated by the same people that use its
products and or services. The purpose of a cooperative is to fulfil the needs of the people
running it. The profits are distributed among the people working within the cooperative,
also known as user-owners. There is typically an elected board that runs the cooperative,
and members can buy shares to be apart of decision-making processes.

Difference between Entrepreneur and Intrapreneur:

As both entrepreneur and Intrapreneur share similar qualities like conviction, creativity,
zeal and insight, the two are used interchangeably. However, the two are different, as
an entrepreneur is a person who takes a considerable amount of risk to own and operate
the business, with an aim of earning returns and rewards, from that business. He is the
most important person who envisions new opportunities, products, techniques and
business lines and coordinates all the activities to make them real. On the contrary,
an Intrapreneur is an employee of the organization who is paid remuneration according
to the success of the business unit, for which he/she is hired or responsible. The primary
difference between an entrepreneur and Intrapreneur is that the former refers to a person
who starts his own business with a new idea or concept, the latter represents an employee
who promotes innovation within the limits of the organization.
Comparison Chart

BASIS FOR
ENTREPRENEUR INTRAPRENEUR
COMPARISON
Meaning Entrepreneur refers to a person Intrapreneur refers to an employee of
who set up his own business the organization who is in charge of
with a new idea or concept. undertaking innovations in product,
service, process etc.
Approach Intuitive Restorative
Resources Uses own resources. Use resources provided by the company.
Capital Raised by him. Financed by the company.
Enterprise Newly established An existing one
Dependency Independent Dependent
Risk Borne by the entrepreneur Taken by the company.
himself.
Works for Creating a leading position in Change and renew the existing
the market. organizational system and culture.
Definition of Entrepreneur
An entrepreneur is an individual who conceives the idea of starting a new venture, take
all types of risks, not only to put the product or service into reality but also to make it
an extremely demanding one. He is someone who:

 Initiates and innovates a new concept,

 Recognises and utilises opportunity,
 Arranges and coordinates resources such as man, material, machine and capital,
 Take suitable actions,
 Faces risks and uncertainties,
 Establishes a start-up company,
 Adds value to the product or service,
 Takes decisions to make the product or service a profitable one,
 Is responsible for the profits or losses of the company.
Entrepreneurs are always the market leader regardless of the number of competitors
because they bring a relatively new concept in the market and introduce change.

Definition of Intrapreneur
An intrapreneur is nothing but an entrepreneur within the boundaries of the organisation.
An intrapreneur is an employee of a large organisation, who has the authority of initiating
creativity and innovation in the company’s products, services and projects, redesigning the
processes, workflows and system with the objective of transforming them into a successful
venture of the enterprise.

The intrapreneur believe in change and do not fear failure, they discover new ideas, looks
for such opportunities that can benefit the whole organisation takes risks, promotes
innovation to improve the performance and profitability, resources are provided by the
organisation. The job of an intrapreneur is extremely challenging; hence they are
appreciated and rewarded by the organisation accordingly.

Key Differences between Entrepreneur and Intrapreneur: The important distinguishing

points between entrepreneur and intrapreneur, are given in the following points:

1. An entrepreneur is defined as a person who establishes a new business with an

innovative idea or concept. An employee of the organisation who is authorised to
undertake innovations in product, service, process, system, etc. is known as
Intrapreneur.
2. An entrepreneur is intuitive in nature, whereas an intrapreneur is restorative in
nature.
3. An entrepreneur uses his own resources, i.e. man, machine, money, etc. while in the
case of an intrapreneur the resources are readily available, as they are provided to
him by the company.
4. An entrepreneur raises capital himself. Conversely, an intrapreneur does not need
to raise funds himself; rather it is provided by the company.
5. An entrepreneur works in a newly established company. On the other hand, an
intrapreneur is a part of an existing organisation.
6. An entrepreneur is his own boss, so he is independent to take decisions. As opposed
to intrapreneur, who works for the organisation, he cannot take independent
decisions.
7. This is one of the salient features of an entrepreneur; he is capable of bearing risks
and uncertainties of the business. Unlike intrapreneur, in which the company bears
all the risks.
8. The entrepreneur works hard to enter the market successfully and create a place
subsequently. In contrast to Intrapreneur, who works for organization-wide change
to bring innovation, creativity and productivity.