Entrepreneurial Development

ED UNIT 1


Meaning of an Entrepreneur:
 An entrepreneur is a person who starts, organizes, manages, and takes the risk of a business to earn
profit.
 An entrepreneur identifies opportunities, brings new ideas or innovations, and creates value by
producing goods or services.
 They combine resources like land, labor, and capital to run a business successfully.
Characteristics of an Entrepreneur:
 Risk-taker – Willing to take financial and business risks.
 Innovative – Brings new ideas, products, or methods.
 Self-confident – Believes in their abilities and decisions.
 Hardworking – Ready to put in consistent effort and time.
 Leadership qualities – Can guide, motivate, and manage others.
 Decision-making ability – Takes quick and effective decisions.
 Goal-oriented – Focused on achieving business objectives.
 Creative thinking – Finds solutions to problems in unique ways.
 Persistence – Does not give up easily despite failures.
 Organizing ability – Efficiently arranges resources and activities.
Entrepreneur vs Manager:
 Motive
o Entrepreneur: To start a business and earn profit
o Manager: To manage the business and earn salary
 Status
o Entrepreneur: Owner of the enterprise
o Manager: Employee of the enterprise
 Risk Bearing
o Entrepreneur: Bears all business risks
o Manager: Does not bear business risks
 Rewards
o Entrepreneur: Profit (uncertain)
o Manager: Fixed salary and incentives
 Innovation
o Entrepreneur: Introduces new ideas and innovations
o Manager: Implements plans and ideas
 Qualification
o Entrepreneur: Needs creativity, vision, and risk-taking ability
o Manager: Needs professional and managerial qualifications
Entrepreneur vs Intrapreneur:
 Dependency
o Entrepreneur: Independent in decision-making
o Intrapreneur: Dependent on the organization
 Raising of Funds
o Entrepreneur: Raises funds on own
o Intrapreneur: Uses funds of the organization
 Risk
o Entrepreneur: Bears full business risk
o Intrapreneur: Does not bear risk
 Operations
o Entrepreneur: Operates outside an organization and education is needed.
o Intrapreneur: Operates within an organization and education is not needed.
Classification of Entrepreneurs:
1. Innovative Entrepreneurs
 Introduce new products, new production methods, or new technology.
 Bring major changes in the market and industry.
 Focus on research, innovation, and development.
 Play an important role in economic development.
 Mostly found in developed countries like the USA, UK, Japan, etc.

, ED UNIT 1


 They are the leaders of change in the economy.
2. Imitative Entrepreneurs
 Do not create new ideas but imitate or copy innovations of others.
 Make minor improvements in existing products and techniques.
 Help in spreading innovations to wider markets.
 Common in developing and under-developed countries.
 Useful when people lack capital, technology, or experience for innovation.
 They help in industrial growth by adopting proven ideas.
3. Fabian Entrepreneurs
 Very conservative and cautious in nature.
 Do not believe in adopting changes easily.
 Accept new ideas or methods only when it becomes necessary for survival.
 Avoid risks and prefer traditional ways of business.
 Follow old customs, traditions, and beliefs.
 Progress is very slow in such enterprises.
4. Drone Entrepreneurs
 Refuse to adopt changes completely, even when losses occur.
 Stick to old and outdated methods of production.
 Do not like innovation or improvement.
 Continue business in a traditional manner.
 Least dynamic and least progressive type of entrepreneurs.
 Their attitude may lead to business failure.
5. Small-scale Entrepreneurs
 Operate business on a small scale.
 Use limited capital and resources.
 Mostly serve local or regional markets.
 Use simple technology and employ fewer workers.
 Help in employment generation.
 Common in developing countries.
6. Large-scale Entrepreneurs
 Operate business on a large scale.
 Require huge capital investment.
 Use modern technology and machinery.
 Serve national and international markets.
 Provide employment to a large number of people.
 Contribute significantly to economic growth.
Classification according to type of business:
1. Business Entrepreneur
 A business entrepreneur is an individual who establishes and operates a business.
 They may be engaged in producing goods or providing services.
 The main objective of a business entrepreneur is to earn profit.
 They identify business opportunities in the market.
 They organize and coordinate factors of production such as land, labour, capital, and enterprise.
 Business entrepreneurs take risks involved in business activities.
 They aim at customer satisfaction along with profit.
 The business may be run on a small scale or a large scale.
 They play an important role in economic development.
2. Trading Entrepreneur
 A trading entrepreneur deals only in the buying and selling of goods.
 They do not produce goods themselves.
 They purchase goods from manufacturers or producers.
 They sell goods to consumers, retailers, or wholesalers.
 Their main function is distribution of goods.
 They create a link between producers and consumers.
 Trading entrepreneurs focus on marketing and sales.
 They do not make any change in the form of goods.