ESBM MOD 2
Entrepreneurial Environment
The entrepreneurial environment refers to the external and internal factors that affect the
functioning of a business. These factors influence business decisions, growth, and
sustainability.
Types of Environment:
● Internal Environment (Avoidable)
○ Factors within an entrepreneur’s control, such as business policies,
management structure, and company culture.
● External Environment (Unavoidable)
○ Factors beyond the entrepreneur’s control, such as government policies,
market trends, economic conditions, and technological changes.
Characteristics of the Entrepreneurial Environment:
. Dynamic in Nature
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○ The business environment is constantly changing due to new policies,
economic shifts, and technological advancements.
. Uncontrollable & External Factors
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○ Businesses must adapt to political, economic, social, technological,
environmental, and legal (PESTEL) factors.
. Presence of Threats & Opportunities
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○ Entrepreneurs must analyze risks (competition, inflation, legal regulations) and
seize opportunities (new markets, innovative products).
. Affects Business Performance
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○ External factors can impact revenue, customer demand, and business
sustainability.
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. Combination of Multiple Factors
○ The environment is influenced by economic conditions, government
regulations, social trends, and technological advancements.
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. Availability of Assistance
○ Entrepreneurs rely on government policies, financial institutions, and
industry networks for support.
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. Legal & Economic Environment
○ Legal factors (licensing, taxation) and economic conditions (inflation, interest
rates) influence business success.
Political, Economic, and Technological Environment
These are key external factors influencing entrepreneurship:
Political Environment
● Includes government policies, taxation rules, labor laws, and trade regulations.
● Affects how businesses register, operate, and expand.
● Example: Policies supporting startups with tax incentives encourage
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entrepreneurship.
Economic Environment
● Consists of inflation rates, interest rates, economic growth, and employment
levels.
● Determines customer purchasing power, cost of capital, and market demand.
Technological Environment
● Involves innovation, automation, and digital advancements.
● Example: E-commerce platforms help small businesses expand their customer base.
Entrepreneurship Development Program (EDP)
An Entrepreneurship Development Program (EDP) is designed to train, support, and
guide entrepreneurs in launching and managing businesses successfully.
Objectives of EDP:
. Create Awareness
○ Educating people about the benefits and challenges of entrepreneurship.
○ Encouraging self-employment and innovation.
. Foster Entrepreneurial Traits
○ Developing skills such as leadership, risk-taking, decision-making, and
problem-solving.
. Identify Business Opportunities
○ Helping entrepreneurs recognize market gaps, customer needs, and
profitable ventures.
. Develop & Implement Business Programs
○ Organizing workshops, training sessions, and mentorship programs.
. Risk Reduction
○ Teaching strategies to manage financial, operational, and market risks.
. Enhance Entrepreneurial Quality
○ Improving skills in business planning, financial management, and marketing.
7.Formulate Proposal for the Product
● Entrepreneurs learn how to develop a business plan and structure a detailed
proposal for their product or service, which is essential for securing funding and
planning operations.
8.Understand the Process & Procedure in Setting Up a Small Enterprise
● EDPs help individuals grasp the legal, financial, and operational requirements
needed to start and run a small business.
9.Know the Sources of Help (Finance)
● Entrepreneurs are educated about funding options like government schemes, banks,
venture capital, and financial institutions that support startups.
10.Appreciate the Needed Entrepreneurial Decision
● Training focuses on developing decision-making skills, helping entrepreneurs
assess risks, opportunities, and business strategies effectively.
Entrepreneurial Development Process
The Entrepreneurial Development Process involves several steps to identify, train, and
support entrepreneurs.
Steps in the Process:
. Proper Selection of Entrepreneurs
○ Identifying individuals with passion, innovation, and risk-taking ability.
. Identification of Entrepreneurial Skills
○ Recognizing personal qualities such as resilience, leadership, and problem-
solving.
. Selection of Enterprise
○ Choosing the right business model based on market demand, competition,
and financial feasibility.
. Monitoring & Follow-up
○ Providing continuous guidance, feedback, and mentorship to help
entrepreneurs grow their businesses.
Entrepreneurial Training
What is Entrepreneurial Training ?
Training aimed at developing entrepreneurial competence in potential individuals is called
entrepreneurial training. Motivating probable entrepreneurs, assisting. Entrepreneurial
Training helps equip entrepreneurs with knowledge, skills, and strategies needed for
business success.
Key Objectives of Training:
. Impart Knowledge About Industry & Production
○ Understanding manufacturing processes, supply chain, and quality control.
. Assist Entrepreneurs in Business Operations
○ Training in financial management, customer relations, and marketing
strategies.
. Build Resilience Among Entrepreneurs
○ Teaching them to overcome challenges, adapt to market changes, and
sustain businesses.
. Provide Knowledge on Market Strategies
○ Helping entrepreneurs understand customer behavior, pricing strategies,
and promotional techniques.
5. To make the entrepreneurs ready for unforeseen threats and risks associated
with the business.
6. To facilitate strategic decision making among entrepreneurs.
7. To inculcate team building and coordination skills for meeting the future
demands.
8. To develop the communications skills among the potential entrepreneurs.
9. To make the potential entrepreneurs able to define the vision of their
ventures and work in coordination for the realization of the same.
10. To make the potential entrepreneurs able to analyse the environment around
them and take suitable decisions about the product.
Importance of Entrepreneurial Training
. Helps in Overcoming Obstacles
Entrepreneurs face various challenges like competition, funding issues, and
regulatory hurdles. Training equips them to handle such difficulties.
. Increases Performance & Efficiency
Proper training enhances productivity and ensures effective management.
. Improves Skill Availability
It benefits not just entrepreneurs but also employees, making businesses more
efficient.
. Improves Business Growth & Profitability
Well-trained entrepreneurs make informed decisions, reducing risks and maximizing
income.
. Minimizes Costs & Reduces Workplace Accidents
Training helps in cost reduction by optimizing resource usage and improving
workplace safety.
Training Methods
Entrepreneurial training can be conducted using various instructional methods:
. Individual Instruction – One-on-one guidance tailored to the entrepreneur’s needs.
. Group Instruction – Training sessions involving multiple participants to share
knowledge and experiences.
. Conference Seminars – Expert-led discussions on industry trends and business
strategies.
. Lecture Method – Traditional classroom-style teaching for theoretical concepts.
. Demonstration Method – Practical training with real-world examples.
. Meetings – Regular discussions to monitor progress and provide feedback.
. Written Instructional Method – Learning through written materials such as guides,
manuals, and reports.
Steps in a Training Program
1.Identifying Training Requirements
– Conducting an analysis of business needs and skill gaps.
– Organizational Analysis
● Studying the vision, mission, and goals of the business to align training with
company objectives.
– Operational Analysis
– Understanding business operations and identifying areas of improvement.
– Manpower Analysis
– Assessing human resource requirements and skills development.
2.Preparing a Roster for Training
Scheduling training sessions for employees and entrepreneurs.
3.Implementing the Program
Executing training modules based on business needs.
4.Checking Entrepreneurial Performance
Evaluating how well entrepreneurs apply their training in real business scenarios.
5.Follow-up of Training Program
Ensuring continuous learning and assessing long-term impact.
Types of Entrepreneurial Training Programs
Training programs can be classified into three categories:
. Structured Training Programs
○ Well-planned courses with predefined content, objectives, and schedules.
. Semi-Structured Training Programs
○ Programs with some flexibility in content and structure, allowing for
customization.
. Unstructured Training Programs
○ Informal training that adapts to the needs of the entrepreneur as they arise.
Institutions Providing Aid for Entrepreneurship Development
Several organizations provide financial, technical, and training support for entrepreneurs:
1. NIESBUD
● Under the Ministry of Skill Development, focuses on entrepreneurship training,
research, and consultancy.
2. EDII
● An autonomous institute in Ahmedabad, provides entrepreneurship education,
research, and startup incubation.
3. SIDBI
● A financial institution that supports SMEs with loans, credit guarantees, and
business financing.
4. SISI
● Now known as MSME-Development Institutes, provides technical and managerial
support to small industries.
5. NSIC
● A government agency offering marketing, finance, and technology support to
small-scale industries.
6. NEDB
● Focuses on skill development and entrepreneurship promotion, supporting
startups and small businesses.
