Golden Rules of Entrepreneurship

• 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.

An entrepreneur is a person who is able to express and execute the urge, skill, motivation and innovative ability to establish a business or industry of his own, either alone or in collaboration with his friends. His motive is to earn profit through the production or distribution of goods or services. Adventurism, willingness to face risks, innovative urge and creative power are the inborn qualities of entrepreneurship. Entrepreneurship can also be explained as a process of executing a work in a new and better way.

• 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."

Peter F. Drucker defines an entrepreneur as one who always searches for change, responds to it and exploits it as an opportunity.

Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service.

• Characteristics of an Entrepreneur:

(1) Vision: An entrepreneur has a dream and he visualizes the ways and means to achieve dream. In doing so he visualizes:

• Market Demands

• Soicio-Economic

• Technological Environment

And then based on these dynamic, he visualizes a future for his business venture.

(2) Knowledge: An entrepreneur has full knowledge about all the technicalities of his business-be it technological, operational, financial or market dynamic.

(3) Desire to succeed: An entrepreneur has a strong desire to succeed in life. Their dreams are not just limited to achieving one single goal but they constantly work to achieve higher goals.

(4) 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.

(5) Optimism: Entrepreneurs are highly optimistic about achieving their vision.

(6) Value Addition: Entrepreneurs do not follow the conventional rules of thumb. They have a constant desire to introduce something new to the existing business. They create, innovate or even add value to the existing products/services.

(7) Leadership: An entrepreneur exhibits the qualities of leader. They are good planner, organizers, have good communication skill, good decision0makers, take initiative to implement plans and are result-oriented.

(8) Hardworking: At times they are called workaholics. Work is worship for then. They put in continuous efforts to achieve success and know that there is no substitute for hard work.

(9) Risk-Taking Ability: Risk is an inherent and inseparable element of entrepreneurship. He assumes the uncertainty of future. An entrepreneur guarantees rent to the landlord, wages to employees and interest to the investor in the hope of earning more than the expenses.

• 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.

• Entrepreneurship Traits:

A successful entrepreneur must possess the following traits:

(1) Mental Ability: Mental ability consists of intelligence and creative thinking. An entrepreneur should be intelligent and must have an analytical mine. He should have the capacity to analyse the problem and able to study the various situation under which decision have to be made.

(2) Clear Objectives: An entrepreneur should have a clear objective. Without objective an entrepreneur cannot success. So a successful entrepreneur must have the objective to establish his product in the market, make profit and also render social service.

(3) Business Secrecy: An entrepreneur must be able to guard business secrets. Leakage of business secrets to trade competitors is a serious matter. So the entrepreneur should be able to make a proper selection of his subordinates.

(4) Human Relations Ability: An entrepreneur must have good relations with his customers to earn profit and win their confidence in his product. He must also maintain good relation with his employees.

(5) Effective Communication: Good communication also means that the entrepreneur has the ability to put his point effectively and with clarity. Communication ability is the secret of the success of most entrepreneurs.

(6) Technical Knowledge: The entrepreneurs are dealing with situations where sophisticated technology is involved. The entrepreneur must have a reasonable level of technical knowledge.

(7) Decision-Making: Running a business requires taking a number of decision. Hence an entrepreneur should have the capacity to analyse the various aspects of the business for arriving at a decision.

(8) Risk-Bearing: 'No risk, no business' or 'no risk, no gains'. Risk is an inherent and inseparable element of entrepreneurship. He assumes the uncertainty of future.

(9) Self-Confidence: Entrepreneurs must have the mental capacity to face any situation. They should also have the ability to inspire other. They must have the confidence in themselves and the determination to achieve their goals.

• Types of Entrepreneur:

Types of entrepreneur are:

(A) Classification on the Basis of Ownership:

(1) Founder or "Pure Entrepreneurs”: Those individuals who are the founder of the business. They are the ones who conceptualize a business plan and then put in efforts to make the plan a success.

Example: Dhirubhai Ambani of the Reliance Group.

(2) Second-generation operators of family-owned business: They are individuals who have inherited the business from their fathers and forefathers.

Example: Like Mukesh Ambani and Anil Ambani sons of Dhirubhai Ambani of the Reliance Group now split into two: Reliance Industries Limited and Reliance-Anil Dhirubhai Ambani Group.

(3) Franchisees: It is a method of doing business wherein the parent owner licenses his trademarks and tried and proves methods of doing business to a franchisee in exchange for a recurring payment.

Example: NIIT has given its franchisee operations to local players after thorough scrutiny and proper training.

(4) Owner-Manager: When a person buys a business from the founder and then invests his time and resources in it he is called the owner-manager.

Example: Like Sabeer Bhatia is the founder entrepreneur of Hotmail.

(B) Classification on the basis of Personality Traits and their style of running the business:

(1) The Achiever: These types of entrepreneurs have personal desires to excel. The only drive that pushes them is the desire to achieve something in life, the desire to make a mark in society, the desire to prove their excellence. They do not need any external stimulus but are self-driven.

(2) The Induced Entrepreneur: These types of entrepreneurs are induced by some external factors to start a business. The external factors could be like:

• Government Policies

• Unemployment

• Family Support

• Facilitating Institutional Support etc.

(3) The Idea Generator: These kinds of entrepreneurs are highly creative people who are always in search of innovative ideas for setting up new business ventures. They enjoy the First Movers' Advantage and are able to skim higher profits from the market.

(4) The Real Manager: The real managers run the business in a systematic manner. They analyse business situation, assess the demands of future, both in terms of opportunities and threats and then take actions based on the above assessments.

(5) The Real Achievers: The real achievers are full of life. They are looking for the achievement of not even their goals but also of people associated with themselves like employees, suppliers and distributors.

(C) Classification based on the type of Business:

(1) Industrial Entrepreneur: Industrial entrepreneur is an entrepreneur who is into manufacturing of a product. He identifies the needs and wants of customers and accordingly manufactures products to satisfy these needs and wants.

(2) Trading Entrepreneurs: Trading entrepreneur is one who undertakes trading activities and is not concerned with the manufacturing of products. He identifies potential markets, stimulates demands and generates interest among buyers to purchase product.

(3) Corporate Entrepreneur: Corporate entrepreneur is a person who demonstrates his innovative skill in organizing and managing a corporate undertaking which is registered under some act that given it a separate legal entity.

(4) Agricultural Entrepreneur: Agricultural entrepreneurs are those entrepreneurs who undertake business related to agricultural activities. Like farm equipments, fertilizers and other input so agriculture.

(D) Classification on the Stages of Development:

(1) First Generation Entrepreneur: A first-generation entrepreneur is one who starts an industrial unit by means of an innovative skill. He is essentially an innovator combining different technologies to produce a market able product or service.

(2) Modern Entrepreneur: A modern entrepreneur is one who undertakes business to satisfy the contemporary demands of the market. They undertake those ventures which suit the current socio-cultural trends.

(3) Classical Entrepreneur: A classical entrepreneur a stereo-type entrepreneur is one whose aim is to maximize the economic returns at a level consistent with the survival of the firm, with or without element of growth.

(E) Other:

(1) Innovative Entrepreneur: Innovative entrepreneurs are full of creative ideas and offer innovate products to the society. It is because of these innovative entrepreneurs that many important changes occur in our society.

(2) Imitative Entrepreneurs: Imitative entrepreneur adapt a successful innovation. They are risk-aversive and so they do not try out new ideas or products.

(3) Drone Entrepreneurs: Drone entrepreneurs are not open to creativity and change. Theydonotlikechangingtheworkingoforganizationswiththechangingtimes.

(4) Copreneurs: When both husband and wife together start and run a business venture then they are called copreneurs.

• 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:-

1. 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.

2. Technician: An entrepreneur must have the technical knowledge. He should know that how to use the resources and achieve the target.

3. Risk Bearing Ability: Risk is very important element. An entrepreneur must have capacity to bearing risk an entrepreneur cannot success.

4. 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.

5. 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.

6. Motivator: An entrepreneur must have a motivator. He inspires the

Impressum

Verlag: BookRix GmbH & Co. KG

Texte: RITTIK CHANDRA
Bildmaterialien: RITTIK CHANDRA
Lektorat: RITTIK CHANDRA
Tag der Veröffentlichung: 31.12.2013
ISBN: 978-3-7309-7283-0

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