Unit-2

2.1 Entrepreneurship: Meaning, definition and concept

INTRODUCTION TO ENTREPRENEUR

Entrepreneur is a person who undertakes a business venture by combining the

resources for production of goods and services and selling them to earn a profit.
Entrepreneur is a person who has already started an enterprise or is in the
process of starting an enterprise. “Entrepreneur is one who ORGANISES,
MANAGES, and ASSUMES THE RISK of a business enterprise”. Entrepreneur is an
action oriented highly motivated individual with a strong desire to be the
successful who take risks to achieve goal.

Entrepreneur is an individual responsible for the operation of a business

including,

 Choice of the product

 Mobilization of resources
 Decision
 Prices
 Market
 Employment of labour
 Extending or reducing the scope of his business.

Definition:

According to Webster’s……… “An Entrepreneur is defined as an individual

who forecasts future demand for the product or services and arranges
business enterprise to respond to their demand”

According to J B Say ……. “Entrepreneur is an economic agent to unities

all the means of production”

ENTREPRENEURSHIP

Entrepreneurship is the activity performed by an entrepreneur to organize

and run an enterprise (Business).

ENTREPRENEURSHIP=Entrepreneur + Enterprise

Entrepreneur is generally to be the owner, manager of an enterprise.

 Entrepreneurship is the activity of an entrepreneur which includes all the
activities performed from the inception stage of an enterprise till its death.

Entrepreneurship is a person-oriented task where the entrepreneur creates a

small world of his own and becomes the master of his own business
universe.

Entrepreneurship is a creative activity. It is the ability to create and build

something from practically nothing. It is a knack of sensing opportunity where
others see chaos, contradiction and confusion. Entrepreneurship is the
attitude of mind to seek opportunities, take calculated risks and derive
benefits by setting up a venture. It comprises of numerous activities involved
in conception, creation and running an enterprise.

Definition….

According to J.A Schumpeter

“Entrepreneurship is a creative activity, the entrepreneur being an innovator who

introduces something new into the economy , a new method of production not
yet tested by experience in the branch of manufacture concerned ,a product with
which customers are not familiar , a new source of raw materials and other
similar innovation”.

According to Peter Drucker

“Entrepreneurship is defined as ‘a systematic innovation, which consists in the

purposeful and organized search for changes, and it is the systematic analysis of
the opportunities such changes might offer for economic and social innovation.’

According to A.H Cole

“Entrepreneurship is the purposeful activity of an individual or a group of

associated individuals, undertaken to initiate, maintain or organize a profit
oriented business unit for the production for distribution of economic goods and
services.”

The Concept of Entrepreneurship

Entrepreneurship is a multifaceted concept that revolves around the creation,

organization, and management of a new business or venture. It is fundamentally
about recognizing opportunities, taking risks, and innovating to deliver new
products or services that meet market needs.
Key Aspects of Entrepreneurship

1. Opportunity Identification:
o Entrepreneurs have a keen eye for spotting gaps in the market or
identifying problems that need solutions. This involves understanding
consumer needs, market trends, and emerging technologies.
2. Innovation:
o At the heart of entrepreneurship is innovation. This doesn’t
necessarily mean inventing something entirely new; it often involves
improving existing products, processes, or business models to create
value.
3. Risk Taking:
o Entrepreneurs are known for their willingness to take calculated risks.
This can involve financial investment, personal time, and effort, all
with the potential of high rewards or significant losses.
4. Resource Management:
o Effective entrepreneurs must skillfully manage resources including
capital, human talent, and time. This involves strategic planning,
budgeting, and scaling operations to support growth.
5. Resilience and Adaptability:
o The entrepreneurial journey is rarely smooth. Entrepreneurs must be
resilient, ready to face setbacks, and adaptable to changing
circumstances and market demands.
6. Vision and Leadership:
o Successful entrepreneurs have a clear vision for their business and
exhibit strong leadership skills. They inspire and motivate their team,
fostering a culture of innovation and collaboration.

2.2 Factors affecting entrepreneurship, characteristics and skills of an

entrepreneur

Factors Affecting Entrepreneurship

Entrepreneurship is influenced by a complex interplay of factors that can either

foster or hinder the success of new ventures. Understanding these factors is
crucial for aspiring entrepreneurs and policymakers aiming to create supportive
environments for business innovation and growth.

1. Economic Environment
  Economic Stability: A stable economic environment with steady inflation
and low unemployment is conducive to entrepreneurship. Economic
stability reduces uncertainty and makes it easier for businesses to plan and
grow.
 Access to Capital: Availability of financial resources such as loans, venture
capital, and grants is critical for entrepreneurs. Limited access to capital
can restrict the ability to start or expand a business.

2. Government Policies and Regulations

 Regulatory Framework: The ease of doing business is significantly

impacted by regulatory requirements. Simplified regulations and
streamlined procedures can encourage entrepreneurship, while
cumbersome regulations can create barriers.
 Tax Policies: Tax incentives, credits, and deductions can reduce the
financial burden on startups, making it easier to invest in growth and
development.

3. Market Conditions

 Demand and Supply: Entrepreneurs need to understand market demand

and supply dynamics. A high demand for a product or service can present
lucrative opportunities, while oversaturated markets might pose challenges.
 Competition: The level of competition in the market can influence
entrepreneurial decisions. While high competition can drive innovation, it
can also increase the risk of failure.

4. Technological Advancements

 Access to Technology: Modern technologies can significantly impact

entrepreneurial ventures. Access to cutting-edge technology can enhance
productivity, reduce costs, and open new market opportunities.
 Innovation: The pace of technological innovation can create new
opportunities and disrupt existing industries. Entrepreneurs who can
leverage or adapt to these changes are more likely to succeed.

5. Social and Cultural Factors

 Entrepreneurial Culture: A culture that values and supports

entrepreneurship can foster a positive environment for new ventures.
Societal attitudes towards risk-taking and failure play a crucial role.
  Education and Skills: Access to education and skill development programs
can equip entrepreneurs with the knowledge and expertise needed to
succeed. Skills in business management, marketing, and technology are
particularly valuable.

6. Personal Characteristics

 Risk Tolerance: Entrepreneurs must have a certain level of risk tolerance to

navigate uncertainties and challenges. Their ability to manage risk
effectively can influence the success of their ventures.
 Vision and Leadership: Strong vision and leadership skills are essential for
setting goals, motivating teams, and guiding a business through its growth
phases.

7. Network and Support Systems

 Mentorship and Advisory: Access to mentors, advisors, and professional

networks can provide valuable guidance, support, and resources.
Networking opportunities can lead to partnerships, funding, and market
insights.
 Support Organizations: Incubators, accelerators, and business
development centers can offer support in terms of resources, mentorship,
and access to funding and markets.

8. Infrastructure

 Physical Infrastructure: Adequate infrastructure, such as reliable

transportation, communication systems, and utilities, is essential for the
smooth operation of a business.
 Digital Infrastructure: Access to high-speed internet and digital tools is
increasingly important for modern entrepreneurship, especially in
technology-driven sectors.

7 Key Qualities of Entrepreneur

Inner Drive to succeed

Entrepreneurs are driven to succeed and expand their business. They see the
bigger picture and are often very ambitious. Entrepreneurs set massive goals for
themselves and stay committed to achieving them regardless of the obstacles
that get in the way.

Strong Belief in themselves

Successful entrepreneurs have a healthy opinion of them-selves and have often
have a strong and assertive personality. They are focused and determined to
achieve them.

Search for New Ideas and innovation

All entrepreneurs have a passionate desire to do things better and to improve
their products or service .They are constantly looking for ways to improve .They
are creative, innovative and resourceful.

Openness to change
Entrepreneurs know the importance of keeping on top of their industry and the
only to being a number one is to evolve and change with the times. They are up
to date with the latest technology or service technique and are always ready to
change if they see a new opportunity arise.

Competitive by Nature
Successful entrepreneurs thrive on competition .The only way to reach their
goals and live up to their self-imposed high standards is to compete with other
successful businesses.

Highly Motivated and Energetic

Entrepreneurs are always on the move, full of energy and highly motivated. They
are driven to succeed and have an abundance of self-motivation. The high
standard and ambition of many entrepreneurs demand that they have to be
motivated!

Accepting of constructive criticism and rejection

Innovative entrepreneurs are often at the forefront of their industry. They readjust
their path if the criticism is constructive and useful to their overall plan. Also the
best entrepreneurs know that the rejection and obstacles are a part of any
leading business and they deal with them appropriately.

SOME MORE CHARACTERISTICS / QUALITY OF AN ENTREPRENEUR

1. Desire to Excel

2. Hard Work

3. Self Confidence

4. Initiative

5. Moderate Risk-Taker
 6. Motivation

7. Optimistic

8. Analytical Ability

9. Mental Ability

10. Communication Ability

11. Flexibility

12. Independence

13. Leadership

14. Good Human Relations Ability

SKILLS REQUIRED FOR AN ENTREPRENEUR

A successful entrepreneur must have knowledge and skill. Skill is the ability to
translate the knowledge into action/ practice. An entrepreneur should have the
following skill:

 Conceptual Skills.
 Technical Skills.
 Human Relation Skill
 Communication Skill
 Diagnostic Skill
 Decision-Making Skill
 Marketing Skill
 Management Skill
 Other Skill
 Project Development Skills
2.3 Entrepreneur v/s manager. Concept of intrapreneurship
Difference between Entrepreneur and Manager

Bases of Difference Entrepreneur Manager

Motive The main motive of an But, the main motive
entrepre¬neur is to of a manager is to
start a venture by render his services in
setting up an an enterprise already
enterprise. He set up by someone
understands the else i.e., entrepreneur.
venture for his
personal gratification.
Status An entrepreneur is the A manager is the
owner of the servant in the
enterprise. enterprise owned by
the entrepreneur.
Risk Bearing An entrepreneur being A manager as a
the owner of the servant does not bear
enterprise assumes all any risk involved in the
risks and uncertainty enterprise.
involved in run¬ning
the enterprise.
Rewards The reward an A manager gets salary
entrepreneur gets for as reward for the
bearing risks involved services rendered by
in the enterprise is him in the enterprise.
profit which is highly Salary of a manager is
uncertain. certain and fixed.
Innovation Entrepreneur himself But, what a manager
thinks over what and does is simply to
how to produce goods execute the plans
to meet the changing prepared by the
demands of the entrepreneur. Thus, a
customers. Hence, he manager simply
acts as an innovator translates the
also called a ‘change entrepreneur’s ideas
agent’ into practice.
Qualifications An entrepreneur needs On the contrary, a
to possess qualities manager needs to
and qualifications like possess distinct
 high achievement qualifications in terms
motive, origi¬nality in of sound knowledge in
thinking, foresight, risk management theory
-bearing ability and so and practice.
on.

INTRAPRENEURSHIP

Intra-preneurship is defined as entrepreneurship within an existing

business set– up. That is to say – Intrapreneurship is corporate
entrepreneurship. When a corporation indulges in entrepreneurial
activities, like diversification into new businesses, it is called
intrapreneurship.

Intrapreneur is a manager who focuses on innovation and creativity; who

brainstorms, dreams and puts ideas into profitable venture by operating
within the organisational environment.

It gives managers the freedom to try new ideas by employing firm’s

resources in a unique way.

CHARACTERISTICS OF AN INTRAPRENEUR

An intrapreneur is not far removed from an entrepreneur. The major

difference being that an entrepreneur risks his own money where as an
intrapreneur works with his employer’s money. Thus, the risk level of an
intrapreneur is considerably reduced.

1. Vision – It is the basis for successful venture. An Intrapreneur has

ability to visualize from idea to implementation.
2. Motivation – Intrapreneur is generally self-motivated, but expects
corporation reward and recognition.
3. Orientation – Intrapreneur is achievement oriented.
4. Risk Appetite – Intrapreneur are moderate risk takers since risk
acceptance depends on their skills. Wild risk takers are not affordable to
corporate.

Difference between Entrepreneur and Intrapreneur

COMPARISON ENTREPRENEUR INTRAPRENEUR

Meaning Entrepreneur refers to Intrapreneur refers to
a person who set up an employee of the
his own business with organization who is in
a new idea or concept. charge of undertaking
innovations in product,
service, process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources

provided by the
company.

Capital Raised by him. Financed by the

company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Risk Borne by the Taken by the company.

entrepreneur himself.

Works for Creating a leading Change and renew the

position in the market. existing organizational
system and culture.

2.4 Types of entrepreneurs,

Entrepreneurs may be classified in a number of ways.
A. ON THE BASIS OF TYPE OF BUSINESS.
Entrepreneurs are classified into different types. They are
1) Business Entrepreneur: He is an individual who discovers an
idea to start a business and then builds a business to give birth to his
idea.
2).Trading Entrepreneur: He is an entrepreneur who undertakes
trading activity i.e; buying and selling manufactured goods.
3) Industrial Entrepreneur: He is an entrepreneur who
undertakes manufacturing
activities.
4) Corporate Entrepreneur: He is a person who demonstrates his
innovative skill in organizing and managing a corporate undertaking.
 5) Agricultural Entrepreneur: They are entrepreneurs who
undertake agricultural activities such as raising and marketing of crops,
fertilizers and other imputs of agriculture. They are called agripreneurs.

B. ON THE BASIS OF USE OF TECHNOLOGY

1) Technical Entrepreneur: They are extremely task oriented. They

are of craftsman type. They develop new and improved quality goods
because of their craftmanship. They concentrate more on production
than on marketing.

2)Non-Technical Entrepreneur: These entrepreneurs are not

concerned with the technical aspects of the product. They develop
marketing techniques and distribution strategies to promote their
business. Thus they concentrate more on marketing aspects.
3) Professional Entrepreneur: He is an entrepreneur who starts a
business unit but does not carry on the business for long period. He
sells out the running business and starts another venture.
C. ON THE BASIS OF MOTIVATION:

1) Pure Entrepreneur: They believe in their own performance while

undertaking business activities. They undertake business ventures for
their personal satisfaction, status and ego. They are guided by the
motive of profit. For example, Dhirubhai Ambani of Reliance Group.
2)Induced Entrepreneur: He is induced to take up an entrepreneurial
activity with a view to avail some benefits from the government. These
benefits are in the form of assistance, incentives, subsidies,
concessions and infrastructures.
3)Motivated Entrepreneur: These entrepreneurs are motivated by the
desire to make use of their technical and professional expertise and
skills. They are motivated by the desire for self-fulfillment.
4) Spontaneous Entrepreneur: They are motivated by their desire for self
-employment and to achieve or prove their excellence in job
performance. They are natural entrepreneurs.

D. ON THE BASIS OF STAGES OF DEVELOPMENT:

1) First Generation Entrepreneur: He is one who starts an industrial unit
by means of his own innovative ideas and skills. He is essentially an
innovator. He is also called new entrepreneur.
2) Modern Entrepreneur: He is an entrepreneur who undertakes those
ventures which suit the modern marketing needs.
3)Classical Entrepreneur: He is one who develops a self supporting
venture for the satisfaction of customers’ needs. He is a stereo type or
traditional entrepreneur.

E. CLASSIFICATION ON THE BASIS OF ENTREPRENEURIAL ACTIVITY:

1)Novice: A novice is someone who has started his/her first
entrepreneurial venture.
2)Serial Entrepreneur: A serial entrepreneur is someone who is
devoted to one venture at a time but ultimately starts many. He
repeatedly starts businesses and grows them to a sustainable size and
then sells them off.
3) Portfolio Entrepreneurs: A portfolio entrepreneur starts and
runs a number of businesses at the same time. It may be a strategy of
spreading risk or it may be that the entrepreneur is simultaneously
excited by a variety of opportunities.

F. CLASSIFICATION BY CLARENCE DANHOF: Clarence Danhof, On the

basis of American agriculture, classified entrepreneurs in the following
categories:
1) Innovative Entrepreneurs: They are generally aggressive on
experimentation and cleverly put attractive possibilities into practice. An
innovative entrepreneur, introduces new goods,
inaugurates new methods of production, discovers new markets and
reorganizes the enterprise.

Innovative entrepreneurs bring about a transformation in lifestyle and

are always interested in introducing innovations.
2) Adoptive or Imitative Entrepreneurs: Imitative entrepreneurs do
not innovate the changes themselves, they only imitate techniques and
technology innovated by others. They copy and learn from the innovating
entrepreneurs. While innovating entrepreneurs are creative, imitative
entrepreneurs are adoptive.
3) Fabian Entrepreneurs: These entrepreneurs are traditionally
bounded. They would be cautious. They neither introduce new changes
nor adopt new methods innovated by others entrepreneurs. They are shy
and lazy. They try to follow the footsteps of their predecessors. They
follow old customs, traditions, sentiments etc. They take up new
projects only when it is necessary to do so.
4) Drone Entrepreneurs: Drone entrepreneurs are those who refuse
to adopt and use opportunities to make changes in production. They
would not change the method of production already introduced. They
follow the traditional method of production. They may even suffer losses
but they are not ready to make changes in their existing production
methods.
There is another classification of entrepreneurs. According to this,
entrepreneurs may be broadly classified into commercial entrepreneurs
and social entrepreneurs.

Commercial Entrepreneurs: They are those entrepreneurs who start

business enterprises for their personal gain. They undertake business
ventures for the purpose of generating sales and profits. Most of the
entrepreneurs belong to this category.

Social Entrepreneurs: They are those who identify, evaluate and exploit
opportunities that create social values and not personal wealth. Social
values refer to the basic long standing needs of society. They focus on
the disadvantaged sections of the society. They play the role of change
agents in the society. In short, social entrepreneurs are those who start
ventures not for making profits but for providing social welfare.

2.5 Functions of entrepreneur

i. Entrepreneurial functions consisting of organization building,
risk taking and innovation.
ii. Promotional functions consisting of discovery of idea,
detailed investigation; assembling of requirements and
financing the proposition.
iii. Managerial functions consisting of planning, organizing
staffing, directing, coordinating and controlling.
iv. Commercial functions representing production, finance
marketing, accounting and personnel.

Entrepreneurs play a pivotal role in the creation and growth of

businesses. Their responsibilities span a wide range of activities that are
essential to establishing and running a successful enterprise. Here’s an
overview of the key functions of an entrepreneur:

1. Opportunity Recognition

 Identifying Opportunities: Entrepreneurs have a knack for spotting

gaps in the market or emerging trends. They analyze market needs,
consumer behavior, and technological advancements to identify
potential business opportunities.
  Market Research: Conducting thorough market research helps
entrepreneurs validate their ideas and assess the feasibility of their
ventures.

2. Business Planning

 Developing a Business Plan: A comprehensive business plan

outlines the vision, mission, goals, strategies, and financial
projections for the business. It serves as a roadmap for the
entrepreneur and a tool for attracting investors.
 Strategic Planning: Entrepreneurs develop strategies to achieve
their business objectives, including market positioning,
competitive advantage, and growth plans.

3. Resource Acquisition and Management

 Securing Funding: Entrepreneurs seek and secure financial

resources through various means such as personal savings, loans,
venture capital, or angel investors. They must manage this capital
efficiently to support business operations and growth.
 Managing Resources: Effective management of resources,
including human, financial, and material resources, is crucial.
Entrepreneurs are responsible for budgeting, allocating resources,
and optimizing their use.

4. Risk Management

 Assessing Risks: Entrepreneurs evaluate potential risks

associated with their business ventures, such as financial,
operational, and market risks. They develop strategies to mitigate
these risks.
 Decision-Making: They make critical decisions that involve risk
and uncertainty, balancing potential rewards against possible
downsides.

5. Innovation and Product Development

 Creating Value: Entrepreneurs drive innovation by developing new

products or services that meet market needs or solve problems.
They continuously seek ways to improve and differentiate their
offerings.
 Adapting to Change: They stay responsive to technological
advancements and changing market conditions, ensuring their
products or services remain relevant.
6. Leadership and Team Building

 Leading the Team: Entrepreneurs provide leadership and direction

to their team. They set goals, establish company culture, and
motivate employees to work towards the business objectives.
 Building a Strong Team: Recruiting, training, and retaining talented
individuals are crucial for building a competent and committed
team that can drive the business forward.

7. Marketing and Sales

 Market Positioning: Entrepreneurs develop and implement

marketing strategies to promote their products or services. This
includes branding, advertising, and market positioning.
 Sales Strategy: They design sales strategies and processes to
acquire and retain customers, drive revenue, and grow the
business.

8. Operations Management

 Overseeing Operations: Entrepreneurs manage day-to-day

operations, ensuring that business activities are running smoothly
and efficiently. This includes overseeing production, supply chain
management, and customer service.
 Quality Control: Maintaining high standards of quality in products
or services is essential for customer satisfaction and business
reputation.

9. Financial Management

 Budgeting and Forecasting: Entrepreneurs develop financial plans,

including budgeting and forecasting, to manage cash flow, control
costs, and achieve financial targets.
 Financial Reporting: They monitor financial performance through
regular reporting and analysis, making adjustments as needed to
ensure financial stability and growth.

10. Networking and Relationship Building

 Building Partnerships: Entrepreneurs establish and maintain

relationships with stakeholders such as suppliers, customers,
partners, and industry peers. Networking can lead to valuable
business opportunities and collaborations.
  Public Relations: They manage the company’s public image and
relationships with the media, investors, and the community.

11. Legal and Compliance

 Navigating Regulations: Entrepreneurs ensure that their business

complies with legal and regulatory requirements. This includes
obtaining necessary licenses, adhering to labor laws, and following
industry regulations.
 Protecting Intellectual Property: They take steps to protect
intellectual property through patents, trademarks, and copyrights
to safeguard their innovations and brand.

2.6 Entrepreneurial decision process

Decision making is the actual selection of the among alternatives.
We have various available alternative options in the market.
E.g You have a lot of alternative options to make decisions such as if
you have to do cooking, you have to do sleeping, you have to do creative
work but you have 2 hrs then you choose Best decision for you best
Work. That is the best decision making.
Entrepreneurs need to make various decisions for the business he/she
needs good decision making skills because of the Market problem and
defending the market situation.
The entrepreneur needs to follow the steps of the
entrepreneurship decision process.
1. Identification of problem or opportunity.
2. Generate alternative solutions.
3. Analyse the alternative solutions.
4. Selection of the best alternative.
5. Implementation of the alternative.
6. Review the performance.

# 1. Identification of problem or opportunity (Entrepreneurship decision

process)
In entrepreneurship the first process of identifying opportunities or
problems. The entrepreneurial decision process Both are equal to arising
opportunity and Problem if you are firm under various arising problems
then you identify a particular problem and opportunities as same.
Step by step make decision problems and find opportunity following are
the steps to follow.

Problem Opportunity

 Listen to your potential clients and

 Identify of the problem past leads

 Search for alternatives

way  Listen to your customers

 Weighing of alternatives  Look at your competitors

 Decide a choice  Look at industry trends and insights

 Evaluate of the all results

# 2. Generate alternative solutions

Identify opportunities and problems. These first processes are
completed then the second decision process generates alternative
solutions. You must be innovative to choose alternative ideas. That’s
why we call this step an innovative step to make entrepreneurs’
decisions for particular taking decisions.
How to find innovative ideas in particular problems or opportunities.
Here we are considering categories to choose alternative solutions.
  Take solutions from the same decision made previously. It may
be a good idea to use the work you have done in the past to make
an exis ting decision. Note- especially if your decision does not
require much change.

# 3 Analyse the Alternative Solutions

The second step is to generate ideas then analyse those ideas
alternatively you choose for your particular purpose. You must analyse
all areas of these ideas for beneficial in your organization.
.
# 4. Selection of the best alternative
When you generate alternative solutions and analysis, Then Fourth steps
of entrepreneurship in deciding the best alternative decision.
When you choose the best alternative as per requirement, it definitely
benefits you.

# 5. Implementation of the alternative (Entrepreneurship decision

process)
Selection of the best alternative in the entrepreneurship decision
process then the fifth process implements these alternatives in your
purpose for getting more benefits.

#6. Review the performance.

In the entrepreneurship decision last process review the performance
means that all reviews of you are choosing these alternatives. Look At
the actual performance and previous performance what are differences
between them.

2.7 Challenges faced by entrepreneurs and changing role of

entrepreneur Challenges faced by entrepreneur?

People get attracted to the idea of being an entrepreneur looking at the

success enjoyed by successful entrepreneurs. However, they just look at
the fruit of these people’s success and don’t know the struggle they
have done to become successful.
The journey to becoming an entrepreneur is not a piece of cake. You will
be doing something that no one has done before. On top of that, you will
have no one to go to in trying times. You will have to face all the
challenges and work out all of them as they will come.
The following are a few common challenges that every entrepreneur
faces while starting their business.
1. Getting funds for your business
The first challenge that every entrepreneur comes across is to get funds
for their business venture. It is comparatively easy for an experienced
business person to collect funds and to attract investors for the new
business venture.
On the other hand, for a new entrepreneur, the challenge of attracting
investors and collecting funds becomes challenging because of various
reasons, such as

 They don’t have a history in the market.

 They don’t have connections with the right people.

 Investors don’t trust them.

 They might not be good at convincing investors to invest in their

business.
2. Leaving your career
Going your well-paying job and taking up the challenge of walking into
unknown territories is not everyone’s teacup. This could be one of the
most challenging decisions that you are required to make as an
entrepreneur.
Some businessmen run their small businesses along with their steady
and well-paying jobs. They might work late nights and on weekends. But
if you want your business to grow significantly, then you are required to
leave your job and get into your business full-time.
3. Hiring people
Hiring the right people to work for you is very crucial for the success of
your business.
The people that you will hire should be able to fill different roles. They
should be willing to adapt to your working culture and should have the
ability to work under extreme stress. When you are building a business,
you would need people who can work extra hours and are willing to put
their 100% efforts to take your business to the height of success.
However, talent is not only a factor in hiring a person. Several other
factors, such as education, experience, behavior, psychological
assessment, etc. should also be considered.
4. Facing rejection
Facing rejection is one of the prevalent challenges that are faced by
entrepreneurs. You will be rejected for your idea, age, and experience in
the business world. No matter what you do, you can’t avoid the
rejections. You will be rejected for one or another thing.
Only a person who has unshakable trust and unbreakable confidence in
his idea can survive the rejections in such a scenario.
The toughest part of rejection is that you will not only be rejected by
strangers, but your friends and family will also reject you. Therefore, you
need to stay headstrong when faced with rejections.
5. Decision-making
Taking decisions on your own, while being aware that a wrong decision
can cause you losses, is one of the common challenges entrepreneurs
face. Therefore, decision-making can be classified as one of the most
stressful challenges of all the challenges faced by entrepreneur.
6. Facing criticism
Another challenge that an entrepreneur faces is criticism. You will be
criticized by people who know you and who don’t know you. They will
warn you about your business idea and tell you the consequences of a
failed business. They might impose their insecurities on you.
In addition to this, you will be criticized by people who are jealous or
might fear your business’s success.
7. Staying focused
Staying focused is a challenge faced by entrepreneurs and especially
young entrepreneurs. You might have invented a product, or your
business idea is excellent, but it will all be wasted if you don’t know how
to stay focused.

8. Missing out on life

Missing out on life is a challenge that all entrepreneurs face, and it is not
a temporary challenge that they will face at the beginning of their
careers. They will face this challenge throughout the journey.
Entrepreneurship is not easy. You will be required to put your all into
becoming a successful entrepreneur. There will be many incidents
working alone in your office on a festival night or a special day like your
birthday. You will be required to sacrifice your family time, me time, and
your leisure time to make your business successful.
9. Being the visionary
An entrepreneur is someone who continuously thinks and plans about
the future. You will be expected to come up with innovative ideas from
time to time.
Your employees will look towards you when they are faced with a
challenge that they can’t handle. It will be your responsibility to come up
with innovative ideas to help your team move forward.
10. Facing competition
Once you are out in the market and your business is growing. The first
challenge that you will face is the competition. Your competitors will be
not only new businesses but also be seasoned companies.
Giant companies especially take advantage of inexperienced
entrepreneurs. Either they try to buy them out or become their
competitor. As your business owner, it will be your responsibility to
answer your competitors and come up with ideas to meet competition.
11. Stress and self-doubt
Starting a new business from scratch is a stressful job, and it is normal
for one to self-doubt in such a situation. There will be thousands of
responsibilities on your shoulders, and you will be required to think about
the ideas to continuously make your business profitable.
12. Marketing
Once you have set up your business and have a product or service to
offer, the next thing that you are required to do is the right marketing of
your business. Marketing has a vital role to play in the success of a
business. Proper marketing can make your business hit overnight,
whereas the wrong marketing can ruin your business’s image.
13. Health
As an entrepreneur, another thing that you will put at stake is your health.
There will be many times you will miss to eat your lunch. There will be
many sleepless nights when you will either be working the whole night or
be up the entire night because of stress.
14. Loneliness
One challenge faced by entrepreneurs is “loneliness.” Every entrepreneur
has felt alone one or another time, and it is kind of a struggle that no one
talks about. Entrepreneurship is something that comes with no rule book
or manual. You will never be prepared for it, and you will learn by getting
involved.
15.Facing unknown challenges
There will be times when you will encounter a problem that you have
never thought that would exist. Therefore, the question of being
prepared for the unknown shouldn’t be there. In such a scenario, you will
need your creative mind to deal with the situation.
The changing role of the Entrepreneur
Entrepreneurs occupy a central position in a market economy. For it's
the entrepreneurs who serve as the spark plug in the economy's engine,
activating and stimulating all economic activity. The economic success
of nations worldwide is the result of encouraging and rewarding the
entrepreneurial instinct.

A society is prosperous only to the degree to which it rewards and

encourages entrepreneurial activity because it is the entrepreneurs and
their activities that are the critical determinant of the level of success,
prosperity, growth and opportunity in any economy. The most dynamic
societies in the world are the ones that have the most entrepreneurs,
plus the economic and legal structure to encourage and motivate
entrepreneurs to greater activities.
For years, economists viewed entrepreneurship as a small part of
economic activity. But in the 1800s, the Austrian School of Economics
was the first to recognize the entrepreneur as the person having the
central role in all economic activity. Why is that?
Because it's entrepreneurial energy, creativity and motivation that trigger
the production and sale of new products and services. It is the
entrepreneur who undertakes the risk of the enterprise in search of profit
and who seeks opportunities to profit by satisfying as yet unsatisfied
needs.

Entrepreneurs seek disequilibrium--a gap between the wants and needs

of customers and the products and services that are currently available.
The entrepreneur then brings together the factors of production
necessary to produce, offer and sell desired products and services. They
invest and risk their money--and other people's money--to produce a
product or service that can be sold at a profit.

More than any other member of our society, entrepreneurs are unique
because they're capable of bringing together the money, raw materials,
manufacturing facilities, skilled labor and land or buildings required to
produce a product or service. And they're capable of arranging the
marketing, sales and distribution of that product or service.
Entrepreneurs are optimistic and future oriented; they believe that
success is possible and are willing to risk their resources in the pursuit
of profit. They're fast moving, willing to try many different strategies to
achieve their goals of profits. And they're flexible, willing to change
quickly when they get new information.
Entrepreneurs are skilled at selling against the competition by creating
perceptions of difference and uniqueness in their products and services.
They continually seek out customer needs that the competition is not
satisfying and find ways to offer their products and services in such a
way that what they're offering is more attractive than anything else
available.

Entrepreneurs are a national treasure, and should be protected,

nourished, encouraged and rewarded as much as possible. They create
all wealth, all jobs, all opportunities, and all prosperity in the nation.
They're the most important people in a market economy--and there are
never enough of them.

Entrepreneurship is not static. New ventures grow through transitional

stages and are eventually harvested. Entrepreneurs must transition from
their roles of micromanagers to strategic managers’

2.8 Women enterprises, social, and rural entrepreneurship

Women entrepreneurs are individuals who identify, create, and manage

business ventures while navigating the unique challenges and
opportunities that come with being female in the entrepreneurial space.
Their contributions are crucial to economic growth, innovation, and
social change. Here’s a closer look at the role and impact of women
entrepreneurs:

Key Characteristics and Contributions

1. Innovation and Creativity:

o Women entrepreneurs often bring innovative ideas and
solutions to the market. Their unique perspectives can lead
to new products, services, and business models that address
unmet needs and create value.
2. Economic Impact:
o Women-owned businesses contribute significantly to the
economy by creating jobs, generating revenue, and fostering
economic development. They play a vital role in diverse
sectors, from technology and manufacturing to retail and
services.
3. Social Change:
o Many women entrepreneurs focus on social enterprises or
businesses that address societal challenges. Their ventures
often promote social justice, environmental sustainability,
and community development.
4. Leadership Styles:
o Women entrepreneurs may exhibit distinct leadership styles,
often characterized by collaborative, empathetic, and
inclusive approaches. These styles can enhance team
dynamics and organizational culture.

Challenges Faced by Women Entrepreneurs

1. Access to Capital:
o Women entrepreneurs frequently encounter difficulties in
securing funding. They may face biases from investors and
financial institutions, making it harder to obtain loans or
venture capital.
2. Work-Life Balance:
 o Balancing business demands with family responsibilities can
be challenging for many women. Societal expectations and
gender roles often place additional pressures on women
entrepreneurs.
3. Networking and Mentorship:
o Women entrepreneurs might have limited access to
professional networks and mentors compared to their male
counterparts. Building connections and finding guidance can
be more challenging in male-dominated industries.
4. Gender Bias and Discrimination:
o Women entrepreneurs often face gender-based
discrimination and biases that can impact their credibility,
opportunities, and business growth. This includes
stereotypes and systemic barriers within industries and
investment communities.
5. Representation and Visibility:
o Women entrepreneurs may struggle with lower visibility and
representation in media, conferences, and industry events.
This can affect their ability to gain recognition and attract
customers or investors.

Supporting Women Entrepreneurs

1. Access to Funding:
o Programs and initiatives that provide grants, loans, and
venture capital specifically for women entrepreneurs can
help address funding disparities. Financial institutions and
investors are increasingly recognizing the value of
supporting female-led ventures.
2. Mentorship and Networking:
o Establishing mentorship programs and networking
opportunities tailored to women can provide valuable
support, guidance, and connections. Women-focused
business networks and associations play a crucial role in this.
3. Training and Education:
o Providing education and training programs that focus on
entrepreneurship skills, business management, and
leadership can empower women to start and grow their
businesses successfully.
4. Policy and Advocacy:
o Advocating for policies that promote gender equality and
support women entrepreneurs can help address systemic
 barriers. This includes initiatives that ensure equal access to
resources, opportunities, and fair treatment.
5. Celebrating Successes:
o Highlighting and celebrating the achievements of women
entrepreneurs can inspire others and increase visibility.
Recognition through awards, media coverage, and success
stories can help build confidence and credibility.

Social and Rural Entrepreneurship

Social and rural entrepreneurship are two distinct yet interconnected

fields that focus on addressing societal and community-specific issues
through innovative business solutions. Both forms of entrepreneurship
aim to create positive impact and foster sustainable development, albeit
in different contexts.

Social Entrepreneurship

Definition and Objectives:

 Social Entrepreneurship involves the creation and management of

ventures specifically designed to address social, environmental, or
community challenges. Unlike traditional businesses that prioritize
profit maximization, social enterprises focus on generating social
value and solving pressing issues.

Key Characteristics:

1. Mission-Driven: Social entrepreneurs are motivated by a mission

to effect social change. Their primary goal is to create solutions
that benefit society, rather than simply seeking financial returns.
2. Innovative Solutions: They often develop novel approaches to
problems, leveraging creativity and resourcefulness to address
complex social issues in areas like education, healthcare, and
environmental sustainability.
3. Sustainable Impact: Social enterprises aim for long-term,
sustainable impact by creating models that can scale and replicate,
ensuring that their solutions continue to benefit communities over
time.

Examples:

 Grameen Bank: Founded by Muhammad Yunus, Grameen Bank

provides microloans to impoverished individuals in Bangladesh,
 empowering them to start small businesses and improve their
economic conditions.
 TOMS Shoes: This company operates on a “One for One” model,
where every pair of shoes purchased leads to a pair donated to a
child in need, combining business with social responsibility.

Challenges:

1. Funding and Sustainability: Social enterprises often face

difficulties in securing funding and ensuring financial sustainability,
as their focus on social impact may not always attract traditional
investors.
2. Measuring Impact: Quantifying the social impact of initiatives can
be challenging, making it difficult to assess effectiveness and
attract support.

Rural Entrepreneurship

Definition and Objectives:

 Rural Entrepreneurship refers to the establishment and growth of

businesses in rural areas, aiming to stimulate local economic
development and improve the quality of life in these communities.
It addresses specific needs of rural populations and leverages
local resources.

Key Characteristics:

1. Local Resources: Rural entrepreneurs often utilize local resources,

including agricultural products, natural resources, and traditional
skills, to create businesses that cater to local or niche markets.
2. Community Development: Their ventures contribute to rural
development by creating jobs, enhancing infrastructure, and
providing essential goods and services, thereby reducing migration
to urban areas.
3. Cultural and Environmental Sensitivity: Rural entrepreneurs
typically operate within the context of local cultures and
environmental conditions, creating solutions that are sustainable
and culturally appropriate.

Examples:
  Amul Dairy: An Indian cooperative that started in a rural area, Amul
has become a major dairy brand, transforming the local dairy
industry and providing livelihoods to thousands of farmers.
 Husk Power Systems: This company provides off-grid electricity
solutions to rural areas in India using biomass, helping to improve
energy access and support local development.

Challenges:

1. Infrastructure Limitations: Rural areas may lack essential

infrastructure such as transportation, communication, and utilities,
which can hinder the growth and operation of rural businesses.
2. Access to Markets: Rural entrepreneurs often face challenges in
accessing broader markets and may struggle with distribution and
logistics.
3. Funding and Support: Limited access to capital and support
services can impede the growth of rural enterprises. Government
and private sector initiatives are often necessary to provide the
required resources.

Intersection and Synergies

Social and rural entrepreneurship can intersect in several ways:

1. Shared Goals: Both aim to address social issues and improve

community well-being, making them complementary in achieving
sustainable development.
2. Leveraging Local Solutions: Social entrepreneurs working in rural
areas can combine their focus on social impact with the need for
rural economic development, creating tailored solutions that
address local needs.
3. Partnerships and Collaboration: Collaboration between social and
rural entrepreneurs, as well as with government and non-profit
organizations, can enhance the effectiveness and reach of
initiatives, creating synergies that benefit both rural communities
and broader social goals.

Social and rural entrepreneurship play crucial roles in fostering positive

change and development. Social entrepreneurs focus on addressing
societal challenges through innovative solutions, while rural
entrepreneurs drive economic growth and improve living standards in
rural areas. Both forms of entrepreneurship contribute to sustainable
development and can benefit from collaboration and supportive
frameworks that address their unique challenges. By empowering
individuals and communities through these entrepreneurial approaches,
societies can build more resilient and equitable futures.