Problems of entrepreneurship

1. PROBLEMS OF
ENTREPRENEURSHIP
Name-
BADM Dept.

2. Problems of Entrepreneurship
• Traditional Society
• Indian society is, by and large, in the group of
traditions, conservatism and blind faith. Traditionally,
certain jobs are not considered good, even today.
• Due to caste system, people hesitate to leave their
traditional occupations
• Hence people lack business interest, as also the risk
bearing capacity and constructive thinking.

3. Problems of Entrepreneurship
• Hereditary Work
The selection of work, occupation and business in
India is not in accordance with interest, capacity and
feelings.
Rather, it is on the basis of hereditary adaption, caste
system, religion and gender difference, etc.
As a result the entrepreneurs are not able to select
the business and industry, according to their capacity,
interest and motivations.

4. Problems of Entrepreneurship
• Unproductive Expenditure
People keep their savings, hidden with themselves or
go on spending it on marriages, birthday parties,
religious rituals, ornaments, immovable property and
luxury goods, etc.

5. Problems of Entrepreneurship
• Lack of Infrastructure Facility
Infrastructure facilities, required for development of
entrepreneurship, like: means of transportation and
communications, banks, insurance, electricity, water,
raw materials, roads, stock market services capital
market, organized product marketing, etc. have
lacked in our country and hence the new
entrepreneurs have to face difficulty in setting up the
industries and the development of industries has
been slow.

6. Problems of Entrepreneurship
• Lack of Enterprising Mentality
Development of entrepreneurship depends upon the nature of
human resources. However, several changes have taken place in
the mentality of these resources, which have become obstructions
in the development of entrepreneurship, like:
(i) People do not have high aspirations for gaining achievements.
(ii) They take no interest in innovations.
(iii) Most of the young people prefer to do some service, in place of
going towards establishing and operating any business or
industry
(iv) The risk bearing capacity and ability to face contingencies of
people have reduced.
(v) People lack high business and technical abilities.
(vi) Initially, people participate in entrepreneurship development
programmes which complete devotion. But after some time, their
mentality goes on changing and they leave that sometimes they
leave the idea of adopting entrepreneurship, after completing
that programme.

7. Problems of Entrepreneurship
• Cultural Values
Religion has deep effect on Indians. Our ideal has
been, “Simple living, high thinking”. In Indian culture,
much importance has not been given to material
gains, personal property, economic pursuits and high
standard of living.

8. Problems of Entrepreneurship
• Lack of Favorable Environment
Every section of the society like workers, consumers,
investors, government, etc. has its contribution, in
operation of an industry.
However, unfortunately, enthusiasm towards work
lacks in our country. The consumers view the
entrepreneurs, with sense of suspicion, capital is
always scarce, policies of the government are also
not very practical, competition is not healthy and has
become cut throat.

9. Problems of Entrepreneurship
• Competition with Big Industrial Houses
Business activities in India are substantially
controlled by some industrial house. They have
monopoly on business.
Besides, priority is also being to public sector
industries. Hence the new entrepreneurs do not think
of setting up the industry, due to the reason that he is
not in the position to compete with these houses and
public sector industries.
Hence the entry of new entrepreneurs is very limited.

10. Problems of Entrepreneurship
• Lack of Educational and Training Facilities
Educational and training facilities related to
entrepreneurship are available in India, but these have
several deficiencies:
(i) Institutions making the entrepreneurs are not
adequate.
(ii) Education and training imparted in the institutions
are not much practical in respect of
entrepreneurship.
(iii) Trained trainers are also not sufficient.

11. Problems of Entrepreneurship
• Inadequacy of Capital
As compared to western countries, it is becoming
difficult in India to maintain standard of living of its
people, due to rising prices.

12. Problems of Entrepreneurship
• Socio- Cultural Factors
Socio-cultural factors also attributed to slow progress
of entrepreneurship in India, reason being that
several caste-systems, social evils, religious blind
faiths and fatalism exist in the country.

13. Problems of Entrepreneurship
• Opposition of Innovations and Changes
In our country, traditional ideas are quite dominant.
Scientific and logical approach towards problems is
lacking.

14. Problems of Entrepreneurship
• Resource related Obstacles
Several resource related obstacles are faced by
entrepreneurship development programmes. Hence
these programmes are not much successful. These
obstacles are as follows:
(i) Adequate resources lack in the country.
(ii) Physical and human resources do not become
available to the entrepreneurs, in time.
(iii) Some times, the cost of required resources being
high, the entrepreneurs take less interest.
(iv) The cost of imparting training to entrepreneurs
being high, programmes do not get success.

15. Problems of Entrepreneurship
• Lack of Technical Structure
Professional managers, specialists and trained
employees and required for efficient operation of
companies and public sector enterprises. It has been
termed ‘techno structure’ by J.K. Gailbraith. Due to
lack of techno structure in India, the entrepreneurs
hesitate to bear the risk of large business.

16. Problems of Entrepreneurship
• Inadequate Government Facilities and Incentives
Infrastructure facilities have not adequately
developed in backward areas of India. Due to lack of
allotment of land for development of industries,
sources of energy an various infrastructure facilities
and other incentives by the government, the
entrepreneurs are unable to establish industries in
backward areas.

17. Problems of Entrepreneurship
• Bureaucracy and Red Tapism
On one side, very few facilities are being provided by
the governments to the entrepreneurs and on another
side the benefit of these facilities becomes available
to very entrepreneurs, due to bureaucracy and red
tapism. Several types the entrepreneurs feel unhappy,
since in government officers, the officers and the
employees do not pay attention on viability and still
follow old traditional working style.

18. Problems of Entrepreneurship
• Concentration of Economic Power
Most of the industries of the country are dominated
by few big industrialists, which has obstructed the
development of entrepreneurship, like:
(i) Small entrepreneurs do not get the chance to make
progress.
(ii) Big industrialists get success in twisting the
government policies and rules in their favor.
(iii) Big industrialists run parallel industrial role, along
with the government.

19. Problems of Entrepreneurship
• Less Expenditure on Research and Development
Government and private entrepreneur spend too less
on research and development. The entrepreneurs
consider expenditure on research and development,
to be unnecessary. Hence, it not possible to
encourage innovations.

20. Problems of Entrepreneurship
• Heavy Taxation and Corruption
Taxation and corruption in India is such a mechanism,
in which, whatever is done, is directly or indirectly at
the cost to the public. In this situation, whether a
person should bear this burden or should set up the
industry. In such situation, rapid development of
entrepreneurship is not possible.

21. Problems of Entrepreneurship
• Risk of Losing Invested Capital
• Starting a business is all about risk. And the small
business failure rate is relatively high. According to a
study by the National Federation of Independent
Businesses (NFIB), 35% of businesses fail within two
years, 54% fail within four years and 64% of new
businesses fail after six years. When a business fails
it can be financially and emotionally devastating.
People contemplating entrepreneurship should
decide how much they are willing to risk.

22. Problems of Entrepreneurship
• Lower Quality of Life Until the Business is
Established
• Long hours and hard work can effect the
entrepreneur's outside life. Business owners often
put their role as company founder ahead of their role
as husband, wife, or parent. Marriages and
friendships are some unfortunate casualties of
entrepreneurship. Part of the problem is that most
people launch new businesses between the ages of
25 and 34, just when they start their families.

23. Problems of Entrepreneurship
• Complete Responsibility
• Entrepreneurship is highly rewarding, but many
entrepreneurs find that they must make decisions on
issues they are not very knowledgeable about. When
there is no one to ask for answers, the pressure can
build quickly. The knowledge that these decisions
could decide the success or failure of a business can
have a devastating effect on the business owner.