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Saturday, 25 June 2016
Types of Entrepreneurs
Types of Entrepreneurs
Entrepreneurs are creative
individuals who conducts lots of innovative businesses. Some may prefer to
carry forward the business alone and share the business with others. They are
in different forms , may be the farmers, labourers, fisherman, artisans,
importers, exporters, bankers, professionals, etc. Lots of classifications
available about entrepreneurs . They are ;
§ Innovative Entrepreneur
Innovative entrepreneurs are those who introduces new
products, new methods of production techniques or discovers a new market or new
services etc. they are commonly found in developed countries. They are
aggressive in nature and they always try to make the idea successful one.
§ Imitative Entrepreneur
This type of entrepreneurs always tries to copy the
innovations made by innovative entrepreneurs. They are organizers of factors of
production rather than creators. They
contribute to the under developed countries. They are adaptive and more
flexible.
§ Fabian Entrepreneurs
Fabian Entrepreneurs are very shy an lazy . They are very
cautious . They do not venture or take risk . They are rigid and fundamental in
their approach . they follow the foot steps of their predecessors .
§ Drone Entrepreneurs
This type of entrepreneurs are conventional in their
approach . They refuse to copy or use opportunities that come their way. They
are not ready to make changes in their existing production methods even if they
suffer losses. They resist changes.
On
the basis of nature, size, and type of business entrepreneurs are divided into
five types;
§ Business Entrepreneurs
Business entrepreneurs are those who develop an idea for
a new product or service and then establishes an enterprise to produce products
according to their ideas. Most of the entrepreneurs belongs to this category .
§ Trading Entrepreneurs
They undertakes trading activities whether domestic or
foreign trade . They have to identify the potential market for his products in
order to stimulate the demand of products. They use many techniques to promote
trading.
§ Industrial Entrepreneurs
They essentially
manufacture products and offer services, which have an effective demand in the market.
They have the ability to convert economic resources and technology into a
profitable venture.
§ Corporate Entrepreneurs
They
are those who through their innovative ideas and skill able to organize ,
manage and control a corporate undertaking very effectively and efficiently.
Usually, they are promoters of the undertaking / corporations , engaged in business,
trade or industry.
§ Agricultural Entrepreneurs
Those
who undertakes agricultural as well as allied activities in the field of
agriculture is known as agricultural Entrepreneurs. They engage in raising and
marketing of crops, fertilisers and other inputs of agriculture through
employment of modern techniques, machines and irrigation.
On the basis of use of
technology the Entrepreneurs can be classified into two;
§ Technical Entrepreneurs
The Entrepreneurs who are technical by nature in the
sense of having the capability of developing new and improved quality of goods
and services out of their own knowledge , skill and specialization are called
technical Entrepreneurs. They concentrate more on production than marketing .
§ Non-Technical Entrepreneurs
Non-Technical Entrepreneurs are those who mainly
concerned with developing alternative marketing and distribution strategies to
promote their business. They are not concerned with the technical aspect of the
product and services they are dealing with .
§ Professional Entrepreneurs
They make their
profession to establish business enterprise with a purpose , to sell them once
they are established. He or she is always looking forward to develop
alternative projects by selling the running business. He is not interested in
managing operations of the business established by him. He or she is very
dynamic.
Based
on the type of motivating factor entrepreneurs are classified into three;
§ Spontaneous Entrepreneurs
They are otherwise known as pure Entrepreneurs , who are
motivated by their desire for self – fulfilment and to achieve or prove their excellence
in job performance . They undertake entrepreneurial activities for their
personal satisfaction in work , ego, or status. Their strength lies in their
creative abilities. They are the natural Entrepreneurs in any society.
§ Induced Entrepreneurs
They
enter into entrepreneurship because of various governmental supports provided
in terms of financial assistance, incentives, concessions, and other facilities
to the peoples who want to setup of their Enterprises.
§ Motivated Entrepreneurs
They
are motivated by their desire to make use of their technical and professional
expertise and skill in performing the job or project they have taken up. They have
enough confidence in their abilities . they are highly ambitious and are
normally not satisfied by the slow progress in their jobs.
Other
categories of Entrepreneurs;
§ First generation Entrepreneurs
This Entrepreneurs start their industrial unit by means
of their own innovative skill and expertise . They are usually combine
different technologies to produce marketable products , or services for the
consumers. They are essentially innovators having no entrepreneurial backgrounds.
§ Inherited Entrepreneurs /
Second Generation Entrepreneurs
They
are Entrepreneurs by inheritance are seen in India where they inherit the
family business through succession and pass it from one generation to another .
§ Third Entrepreneurs
These are those types of Entrepreneurs where in their
grandparents and parents have been Entrepreneurs and they have inherited the
business. The model is very commonly found in India.
Thursday, 23 June 2016
Myths of Entrepreneurship & Process of Entrepreneurship
Myths
of Entrepreneurship
By
myths of entrepreneurship we mean the believes about the creation and running
of enterprises in our country. The most common are the following;
- § Starting an entrepreneurship is easy in our society but running for a long term is difficult.
- § A lot of money needed in the form of capital to run a new business.
- § A lot of entrepreneurs use debt rather than equity to fund their enterprises.
- § Banks don’t lend money to start – ups.
- § Most entrepreneurs start businesses in attractive industries.
- § The growth of start –up depends more on an entrepreneur’s talents than on the business he chooses.
- § Most creative product producing enterprises are successful financially.
Process of Entrepreneurship
Entrepreneur
is a creative person, he has to do lots of different activities for carrying
out his business. Following are the different steps in the creation of an
enterprise.
§ Self Discovery : Finding out new ideas he can do, and analyse
their strength and weaknesses. Also analyse its potential opportunities in the
market.
§ Identifying
Opportunities : Search for
unsatisfied needs and wants, problems and challenges of the society. It will
give new opportunity for starting a new enterprise.
§ Generating and
Evaluating Ideas : Using
creativity and past experience to devise new and innovative ways to satisfy the
needs , wants , problems and challenges of the society.
§ Planning : Researching and identifying resources needed to
make the idea successful one. Plan all the activities for making the idea into
a good venture.
§ Raising Start-up
Capital : Using the business
plan , entrepreneur has to collect the necessary amount of funds to start the
business.
§ Start-up : Starting the production activities or collection
of goods and services, distribution of goods and services to needy people, creation
of a good collection of regular customers.
§ Growth : Develop the business with new strategic plans and
changing technologies .
§ Harvest : Marketing the products and harvesting the rewards.
Tuesday, 21 June 2016
Advantage & Disadvantages of Entrepreneurship
Advantage
& Disadvantages of Entrepreneurship
To everything in life there are advantages and
disadvantages; entrepreneurship is no exception. As a matter of fact,
entrepreneurship evolves a lot of risk taking. Yet , it can pay off very well,
with rewards such as profits, the opportunity to be your own boss and makes
your own decisions.
Advantages
1.
Excitement
: Due
to its high capacity for risk , there is a lot of adventure . it develops
excitement in entrepreneurs.
2.
Originality
: Some
feel that they can offer a new service or product that no one else has offered
before, ie, i-pod and i-pad
3.
Independence
: some
wish to be their own boss and makes all the important decisions themselves.
4.
Rational
Salary: They are not being paid what they are worth and would
rather work on their own and earn the money they should be earning for their
efforts.
5.
Freedom
:
entrepreneurs can work on any idea which they feel will eventually turn out to
be a successful venture.
Disadvantages
1.
Salary
:
Starting your own business means that you must be willing to give the security
of a regular pay check.
2.
Benefits
: there
will undoubtedly be fewer benefits, especially
when considering that your business will be just starting off.
3.
Work
Schedule : The work schedule of an entrepreneur is never
predictable; an emergency can come up in a matter of a second and late hours
may become the norm.
4.
Administration
: all
the decisions of the business must be made on his/her own ; there is no one
ranked higher on the chain of command, in such a business and the fear of a
wrong decision can have its own effect.
5.
Incompetent
Staff : Most of the time, the entrepreneurs will find
themselves working with employees who “don’t Know the ropes” as well as they
do, due to lack of experience.
Need for Entrepreneurship
Need
for Entrepreneurship
Every nation needs entrepreneurship for the economic
development. In capitalist countries , entrepreneurship plays a vital role, but
in an under developed countries the importance for entrepreneurship is low. In
developing countries there is equal importance to government and private
entrepreneurs. Economic growth depends on the rate of innovation in the
economic field. Creative entrepreneurs are agents of progress in the society.
The need of innovative entrepreneurs is an unavoidable one in a progressing
country like India.
§ Life Line of a Nation
If one
country wants to become a developed nation, there must be more importance for the
development of entrepreneurship. Entrepreneurship is the yardstick to measure the
level of development of a country.
§ Provides Innovation
An
entrepreneur is an innovator who brings new ideas, products, technology and
market. Only through the innovative ideas a nation can become develop one.
§ Change of Growth / Inclusive Growth
An
enterprise works in a dynamic environment. In order to meet the challenges of
automation and advanced technology, there must be more importance for
development of entrepreneurship.
§ Increased Profit
Profits
can be increased in any enterprise , either by increasing the sales revenue or
reducing cost. Entrepreneurship by reducing cost , increase its profits and
provides opportunity for future growth and development.
§ Employment Opportunities
Entrepreneurship
and its activities provide the maximum employment potential. Growth of enterprises in a good manner brings
lots of employment opportunities in a country. It brings more national income
and development.
§ Social Benefits
Origin
of enterprises raises the standard of living by providing good quality products
and services at the lowest possible
cost. It also makes the optimum use of scarce resources and promotes peace and
prosperity in the country.
Functions of An Entrepreneur
Functions of An Entrepreneur
An entrepreneur performs a series of functions necessary right from the
genesis of an idea up to the establishment and effective operation of an
enterprise. He carries out the whole set of activities of the business for its
success. He recognises the commercial potential of a product or a service,
formulates operating policies for production, product design, marketing and
organisational structure. He is thus a nucleus of high growth of the
enterprise.
According some economists, the functions of an
entrepreneur is classified into four broad categories:
@
Entrepreneurial
Functions
@
Promotional
Functions.
@
Managerial
Functions.
@
Commercial
functions.
Entrepreneurial
Functions :
As an entrepreneur ,
he/she performs the following activities;
§
Innovation
It is the basic function of
an entrepreneur. As an innovator he has to bring new product, new market, new
source of raw materials ,etc. He foresees a potentially profitable opportunity
and tries to exploit it.
§ Risk
taking
Risk taking refers to taking
responsibility for a loss . A good entrepreneur reduces the risk in his
business. He is a self-confident and highly optimistic person and willing to
assume the risk involved in his enterprise.
§ Organization
Building
Organization and management
are the main functions of an entrepreneur. He brings together the various
factors of production. It helps to allocate the productive resources in order
to minimize losses and reduce cost in production. He takes the entire decisions
like expansion of business , amount of capital ,etc. of his business. Thus he
is the final judge of his business.
Promotional Functions
§ Discovery
of an Idea
There are lots of
opportunities / ideas available in our world to set up an enterprise. But it is
the ability of a good entrepreneur to discover a suitable idea that helps to
develop profitable ventures. He / she has to develop the discovered idea with
the support of experts in the field.
§ Detailed
Investigation
The entrepreneur will
conduct a detailed analysis about the demand for his product in the market.
There after he will analyse the
availability of finance, power, labour, raw materials and machinery, etc.
§ Assembling
the Requirements
After making sure that the
idea is practical and profitable one, he will acquire some patent rights , if
he has invented something. Then the entrepreneur selects the factory site,
decides about plant and machinery, contacts suppliers of raw materials. Preliminary
contracts are finalized and projects set to begin.
§ Financing the
Proposition
The entrepreneur decides about the capital structure of the enterprise.
Estimating the required finance and analyzing
the sources for its collection. Long term and short term financial
requirements are estimated first and the type of source of funds is also
decided share, debenture, loan,etc.
3. Managerial Functions
§ Planning
It is
the basic and foremost managerial function of an entrepreneur . It helps in determining the course of action to
be followed to achieve various entrepreneurial objectives. It is decision
making in advance , what to do, when to do it, how to do it and who will do a
particular task.
§ Organising
The
entrepreneur sets up the objectives or goals to be achieved by its personnel.
The function of organising is to arrange, guide, co-ordinate, direct and
control the activities or the factors of production.
§ Staffing
It is
concerned with the human resources of an enterprise. It consist of manpower
planning, recruitment, selection , placement, human resource development,
promotion, transfer, appraisal and determination of employee’s remuneration.
§ Directing
It is
concerned with carrying out the desired plans with the support of proper
instructions. It ensures effective performance of planned activities by the
subordinates,
§ Leadership
It is
the process of inspiring or influencing the workers by satisfying their needs
for the fulfillment of organisational objectives.
§ Communication
It
refers to the exchange of ideas , feelings, emotions, knowledge and information
between two or more persons. For effective running and accomplishment of
organisational goals , proper communication at all levels is a necessary one.
§ Motivation
The
performance of an employee depends upon the monetary and non-monetary benefits
got from the Organisation. A sound motivational system must be productive,
competitive, comprehensive and flexible, and it must consider psychological,
social safety, ego and economic needs of the worker.
§ Supervision
Supervision
refers to the job of overseeing , subordinates at work. It ensures maximum
utilization of resources, to the proper and timely completion of work, and to
correct the workers whenever they go wrong.
§ Co-ordination
It is
the channelization of activities of all individuals in the organization , for
the achievement of common goals. The entrepreneur must check the work of
different segments based on the predetermined objectives and make correction ,
if any deviations occurred.
§ Controlling
The
controlling process begins with establishing standards of performance,
measuring actual performance, comparing actual with standard performance,
finding variations and taking corrective actions.
Commercial Functions
§ Production
It is
the key function of an entrepreneur. It is the creation of goods and services.
It consists of manufacturing, ancillary and advisory activities. In a small
organisation it will be undertaken by an individual, but in a large concern, it
may be undertaken by various individuals or a separate team.
§ Finance
Money
is the life blood of every business organisation. The need for money is
continuous. It starts with the setting up of an organisation and remains at all
time. It is the duty of an entrepreneur, to find out various sources of finance
and appropriately arrange them as and when required.
§ Marketing
It
involves the process of movement of goods and services from the producer to the
consumer. It plays a significant role in promoting the successful running of
business enterprise.
§ Personnel
This
function is concerned with employment, development, and compensation for the
personnel, the provisions of working conditions, and welfare measures to
maintain a good work force in the organisation.
§ Accounting
It is
the process of systematic recording of
entrepreneurial transactions of an enterprise and the financial position
of the enterprise. The entrepreneur should look thoroughly the record keeping
of transactions and should aware about the financial position of the firm.
Tuesday, 14 June 2016
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