edc notes

1. Introduction
The word entrepreneur is derived from the French word
‘enterprendre’ it means “to undertake” and literally translated means
“between-taker” or “go-between”.
Entrepreneur is an individual who takes risk and starts something
new.
Who Are Entrepreneurs?
1. Entrepreneur is another name of Risk Taker.
2. An entrepreneur is an individual who takes moderate risks and brings innovation.
3. Entrepreneur is a person who organizes/ manages the risks in his/her enterprise.
4. “Entrepreneur is a individual who takes risks and starts something new”

2. Meaning of Entrepreneur
An Entrepreneur is a person who perceives a need and then brings together
manpower, material and capital required to meet that need. In other words an
entrepreneur is an individual or team that identifies the opportunity, gathers the
necessary resources, creates and ultimately responsible for the performance of the
organization.

3. Meaning of Entrepreneur
An Entrepreneur is a person who perceives a need and then brings together
manpower, material and capital required to meet that need. In other words
an entrepreneur is an individual or team that identifies the opportunity,
gathers the necessary resources, creates and ultimately responsible for the
performance of the organization.
Concept of Entrepreneurship : Concept of entrepreneurship can be explained with the
help of following diagram
Entrepreneur Entrepreneurship Enterprise
Person Process of Action Object

4. E:xamine needs, wants, and problems to see how they can improve the way needs and wants
are met and problems overcome.
N :arrow the possible opportunities to one specific "best" opportunity.
T:hink of innovative ideas and narrow them to the "best" idea.
R:esearch the opportunity and idea thoroughly.
E:nlist the best sources of advice and assistance that they can find.
P:lan their ventures and look for possible problems that might arise.
R:ank the risks and the possible rewards.
E:valuate the risks and possible rewards and make their decision to act or not to act.
N:ever hang on to an idea, no matter how much they may love it, if research shows it won't
work.
E:mploy the resources necessary for the venture to succeed.
U:nderstand that they will have to work long and hard to make their venture succeed.
R:ealize a sense of accomplishment from their successful ventures and learn from their
failures to help them achieve success in the future.

5. Definition of Entrepreneur
According to Harbison
"An entrepreneur is not an innovation but an organization builder or one who
has the skill to build an organization and who must be able to harness the
new ideas of different innovators to the best of the organization.“
Meaning of Entrepreneurship
Entrepreneurship refers to a process of action an entrepreneur undertakes to
establish his enterprise. It is a creative and innovative response to the
environment. In other words entrepreneurship can be defined as an ability to
discover, create or invent opportunities and exploit them to the benefit of the
society, which in turn brings prosperity to the innovator and his organization.

6. Entrepreneur and Entrepreneurship
Entrepreneur Entrepreneurship
Person Process
Visualizer Vision
Organizer Organization
Decision maker Decision Making
Innovator Innovation
Risk bearer Risk bearing
Motivator Motivation
Creator Creation
Leader Leadership
Manager Management
Initiator Initiation
Planner Planning
Technician Technology
Communicator Communication
Administrator Administration

7. Characteristics of an Entrepreneur
Vision entrepreneur works hard to fulfill his dream in process to achieve his objective,
he visualizes market scenario, socio economic, and technological environment based
on these information he predicts future situation and accordingly plans his vision and
ways to achieve desired objective.
Knowledge as entrepreneur is soul of organization he is required to have knowledge
about all the operations carried in organization so that he can direct and regulate
activities of his employees from time to time.
Desire to succeed entrepreneur are recognized in society because of their varied
mindset and high dreams which motivates them to bring in invention and innovation
in are of their business.
Independence : An entrepreneur needs independence in work and decision-making.
They don't follow the rules of thumb but make their own rules and destiny.

8. Optimistic entrepreneurs are optimistic about achieving their objective as they intend to take
risk to any extent to accomplish desired goals
Value addition entrepreneurs are known for bringing new things in market. They create,
innovate, add value to existing products in market.
Leadership entrepreneur exhibits qualities of good leader. They are good planners,
organizers, decision makers and are empathetic towards employees at workplace.
Hardworking entrepreneur are know to be workaholic. They put in continuous efforts to
achieve success and know that their is no substitute for hard work.
Risk taking ability is one of the major trait of successful entrepreneur .

9. qualities and functions of the entrepreneurs
Qualities of An Entrepreneur : An entrepreneur is a person who takes risk of
setting up his own venture for perceived reward. He is a person who initiates the
idea, formulates the plan, organizes resources and puts the plan into action to
achieve his goals. The entrepreneur must have following qualities:-
Planner : Entrepreneur has a strong desire to achieve a higher goal and make their dreams
come true. So the entrepreneur must have these quality to achieve the target an entrepreneur
cannot achieve the target.
Technician : An entrepreneur must have the technical knowledge. He should know that how
to use the resources and achieve the target.
Risk Bearing Ability : Risk is very important element. An entrepreneur must have capacity
to bearing risk an entrepreneur cannot success.

10. Decision Maker : Decision making is the process of choosing best alternative among various
alternatives. An entrepreneur must have these qualities because decision making affect the
profitability and reputation of the enterprise.
Ability to Find and Explore Opportunities : Entrepreneurial persons are quick to see and
seize opportunities. They show an innovative turn of mind and convert difficulties into
opportunities.
Motivator : An entrepreneur must have a motivator. He inspires the employees to achieving
the target. Without motivation an entrepreneur cannot achieve the target. So motivation is
very necessary for achieving the target
Future Oriented : Entrepreneur shows a high level of future orientation. They do not allow
the past to obsess them. They are oriented towards present and future.
Interpersonal Skills : An entrepreneur is a person who during the course of his activities he
should be a person who likes working with people and who has skills of dealing with people.

11. Facing Uncertainty : An entrepreneur is a person who faces uncertainty. The future is
uncertain. So the decision of entrepreneur affects the profitability and reputation of the
enterprise.
Coordination : An entrepreneur must have a coordinator. He allocates the resources and
utilizes the resources for achieving the target. Without coordination an entrepreneur cannot
achieve the target.
Functions of Entrepreneur An entrepreneur has to perform the following function:
Risk taking and Uncertainty Bearing : The future is unpredictable. The entrepreneur has
to take risks in these circumstances. If the venture succeeds, the entrepreneur profits; if it
doe not, losses occur. Thus, taking risks forms an important entrepreneurial function.
Taking Business Decisions : All decision concerning business are taken by the
entrepreneur. He has to formulate an action plan regarding the product and quality of the
product to be produced. He has to evolve the best possible method of production which
would earn him a sizeable profit.

12. Managerial Functions : The entrepreneur performs various managerial functions. The
entrepreneur arranges finance, purchase raw materials, provides the necessary
infrastructure for production. The entrepreneur has a multifaceted personality when he
undertakes managerial functions.
Innovation : The most important function of an entrepreneur is innovation. He introduces
far-reaching improvements in the quantity and quality of production line. He considers the
economic viability and technical feasibility of an invention.
Coordination : The entrepreneur coordinates the other factors of production. Coordination
involves selection of the right type of factors, employment of each factor in the right
quantity, use of the best technical devices, division of labour, reduction of waste etc.

13. Maintain Good-Relations : An entrepreneur must have good relations with his customer to
earn profit and win their confidence in his product. He must also maintain good relations
with his employees.
Analysis the Environment : An entrepreneur analysis the environment. Environment are
those factor which affect the business. There are two type of environment:
Internal Environment : Internal environment are controllable
External Environment : External environment are beyond the control of the business.
Planning : Planning is the first function of the management. Planning is deciding in advance
what is to be done, how is to be done, which is to be done, by whom is to be done. It is very
necessary function of entrepreneur. Without planning an entrepreneur cannot achieve the
target.

14. Attitude attributes can put you in the right mindset for achieving
entrepreneurial success
Have passion for your business.
Work should be fun. Your passion will help you overcome difficult moments and persuade
people to work for you and want to do business with you. Passion can't be taught
Set an example of trustworthiness.
People have confidence in trustworthy individuals and want to work for them in a culture of
integrity. The same is true for customers.
Be flexible, except with core values.
It's a given that your plans and strategies will change as time goes on. This flexibility for
rapid change is an inherent advantage of small over large business. However, no matter the
pressure for immediate profits, do not compromise on core values.
Don't let fear of failure hold you back.
Failure is an opportunity to learn. All things being equal, venture capitalists would rather
invest money in an individual who tried and failed founding a company than in someone who
never tried.

15. Make timely decisions.
It's okay to use your intuition. Planning and thought are good. But procrastination leads to
missed opportunity.
The major company asset is you.
Take care of yourself. Your health is more valuable than the most expensive machinery or
computer software for the company. You don't have to choose between your family or your
company, play or work. Maintain your health for balance and energy, which will, in turn,
enhance your mental outlook.
Keep your ego under control.
Don't take profits and spend them on expensive toys to impress others. Build a war chest for
unexpected needs or opportunities. This also means hearing out new ideas and suggestions no
matter how crazy they sound.
Believe.
You need to believe in yourself, in your company, and that you will be successful. This
confidence is contagious with your employees, customers, stakeholders, suppliers and
everyone you deal with.

16. Encourage and accept criticism graciously. Admit your mistakes.
You need to constantly work on convincing your employees that it's okay--even necessary--
to state their honest opinions even it if conflicts with the boss's opinion.
Maintain a strong work ethic.
Your employees will follow your lead. It will also help you beat your competition by
outworking them, particularly when your product or service is very similar.
Rebound quickly from setbacks.
There surely will be plenty of ups and downs as you build the business. Learn from the
setbacks and move on. You can't change the past.
Periodically get out of your comfort zone to pursue something important.
Many times you will feel uncomfortable in implementing a needed change in technology,
people, mission, competing, etc. For the company and you to grow personally, you
sometimes have to step out of your comfort zone.

17. common entrepreneurial leadership characteristics
Communication skills
The leader is able to clearly articulate their ideas, and the plan to achieve common goals.
They encourage communication between departments and across levels. They avoid
ambiguities and generalizations, and are able to avoid conflict and misunderstanding due to
poor communication.
Vision
A successful entrepreneurial leader has a clear vision. He knows exactly where he wants to
go and how to get there. They communicate their vision to the team and work with them to
make the vision a reality.
Supportive
An entrepreneurial leader realizes the importance of initiative and reactiveness, and they go
out of their way to provide all the support that the team needs to achieve their goals.

18. Self-belief
The leader has tremendous belief in themselves and has confidence gained from years of
experimenting, at times failing, and learning. They are aware of their strengths and
weaknesses, and demonstrate their skills without hubris.
Shares success
When the team or the organization succeeds at something, the leader does not hog the
limelight or take all the credit.
Involved
You will not find an entrepreneurial leader cooped up in the office. Leaders like to spend time
among employees, walk around the factory or department, interact with everyone, and see
them doing their job.
Create an atmosphere conducive to growth
With a deep understanding of the importance of other people’s contribution to organizational
success, the entrepreneurial leader creates an atmosphere that encourages everyone to share
ideas, grow, and thrive

19. Honesty
Honesty is the most important quality of an exceptional leader. Entrepreneurial leaders who
are honest are able to quickly win the trust of their employees
Perseverance
When the going gets tough, the entrepreneurial leader perseveres. True entrepreneurs simply
don’t quit, they keep going till they find what they’re looking for.
Learning
The leader not only invests significantly in learning and updating their knowledge, but they
also create a learning environment in the organization encouraging others to improve their
knowledge, widen their experience, and tackle multiple challenges.

20. Comparison between Entrepreneur and Manager
Entrepreneur Manager
Definition A person who sets up a business or
businesses, taking on financial risks in the
hope of profit
A person responsible for
controlling or administering
an organization or group of
staff
Business Set up their own business
Work in someone else’s
business
Role Owner Employee
Financial Risks Take on the financial risks of the business
Does not take on the financial
risks of the busines
Reward Profit Salary
Management
Manages the business and the people involved,
i.e. staff
Manages the business and the
people involved, i.e. staff
Focus Business startup Ongoing operations
Decision
making
Intuitive Calculative
Approach to
task
Informal Formal

21. Role of Entrepreneur in Economic Growth :
Modern economic development is closely linked with production. Modern production is
higher complex. The entrepreneur directs production and he must do whatever is necessary for
its success.
His role in modern economic development has at least three aspects:
1. The entrepreneur co-ordinates the other factors of production. This involves not only
assembling the factors, but also to see that the best combination of factors is made
available for the production process.
2. The entrepreneur takes risks. This is the important function of the entrepreneur and the
quantum of profit he receives is directly proportionate to the risks he takes. Risks are
generally based on the anticipation of demand.
3. Finally the entrepreneur innovates. Innovation is different from invention. Invention is
the work of scientists. Innovation implies the commercial application of an invention. As
an innovator the entrepreneur assumes the role of a pioneer and an industrial leader.

22. The entrepreneur can undertake anyone type of the following five categories of
innovation:
1. The introduction of a new good or a new quality of a good
2. The introduction of a new method of production
3. The opening of a new market
4. The conquest of a new source of supply of raw materials
5. The carrying out of a new organization of any industry.
Importance of Entrepreneur in Economic Development : Every country tries to achieve
maximum economic development. The economic development of a country to a large extent
depends on human resources. But human resource alone will not produce economic
development-there must be dynamic entrepreneurs

23. Employment Generation : Growing unemployment particularly educated unemployment is
an acute problem of the nation. If a hundred persons become entrepreneur they not only create
a hundred jobs for themselves but also provide employment to many more.
National Income : National Income consists of goods & services produced in the country and
those imported. The goods & services produced are for consumption within the country as
well as to meet the demand of exports
Dispersal of Economic Power : When a society produces a small number of entrepreneurs
the enterprise due to lack of competition grow into a few big business houses. This results in
concentration of wealth in a few families. This can have a serious social and national
implication
Balance Regional Development : The growth of industry and business leads to a large
number of public benefits like road, transport, health, education, entertainment etc. A rapid
development of entrepreneurship ensures a balanced regional development.
Economic Independence : Entrepreneurship is essential for national self-reliance.
Businessman export goods and services on a large scale and earn the scarce foreign exchange
for the country

24. Reducing Unrest and Social Tension Amongst Youth : Many problems associated with
youth and social tensions are rightly considered to be due to youth not being engaged in
productive work.
Improvement in Living Standards : Entrepreneurs set up industries which remove scarcity
of essential commodities and introduce new products. Production of goods on mass scale
and manufacture handicrafts etc. in the small scale sector help to improve the standard of
life of a common man
Harnessing Locally Available Resources and Entrepreneurship : India is considered to
be very rich in natural resources.
Innovations in Enterprises : Business enterprises need to be innovative for their survival
and better performance. Entrepreneurship development programmes are aimed at
accelerating the pace of small firms' growth in India.