1. Who is an entrepreneur?Basically an entrepreneur is an innovator, job and wealth generator.

In addition to the
above he is also

Change agent

Problem solver

Pace setter

Excellence seeker

Marketing executive

Concept promoter

More revision on Entrepreneurial Concepts

2. List the key functions of an entrepreneur.
In order to be an entrepreneur, the individual performs various functions. Among the various functions performed, the
following functions, also known as entrepreneurial functions, are specifically considered as the characteristics of an
entrepreneur.
1.

Sensing an entrepreneurial opportunity.

2.

Converting ideas into Reality.

3.

Developing the business plan.

4.

Resourcing

5.

Establishing an enterprise.

6.

Managing the enterprise

7.

Growth and development.

All these functions are known as entrepreneurial functions. The success and the quality of the output of the
performance of the entrepreneur depends on how well he performs these functions. Therefore these functions
performed describe the intensity fo the relationship fo the entrepreneur with the enterprise. For this reason, we can
say that the relationship between the entrepreneur and entrepreneurship can be described as that between the body
and the soul.
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3. What are the unique characteristics of an entrepreneur?
4. Why is entrepreneurship important for a country?
Entrepreneurship is important for a country because entrepreneurship facilitates the rate of development of a country
by significantly contributing to the following factors.

By increasing the rate of growth in GDP of a country

Increasing productivity.

Growing employment opportunity.

Increasing economic diversification.

Optimum use of local resources

Continued innovation in techno managerial practices

Improving in international competitiveness.

More revision on Need and Importance of Entrepreneurship.

5. List the stages of growth and development of entrepreneurship.
The process of entrepreneurial development consists of creating an entrepreneurial person by
i.

Imbibing entrepreneurial quality and motivation.

ii.

Developing capacity of sensing, selecting, planning and establishing an enterprise.

iii.

Acquiring ability to successfully manage the set enterprise.

The main methodology can be best classified into simulatory, support services and sustaining. This is best explained
through the following diagram.

More revision on Entrepreneurship Growth and Development

6. What is the relationship between human activities and entrepreneurship?
Human needs represent a wide range.

Economical

Physical

Political

Psychological

Spiritual

Social

To satisfy these needs, every human being is continuously engaged in a variety of activities. For performing these
activities, people need

Certain tools and techniques

Means and methods

Products and services

Facilities and environment.

This creates perpetual entrepreneurial opportunity in the society for

continuous innovation

Production

Distribution

Maintenance

Modification

Improvement

in such and services to enable people to perform the required human activities. Thus the entrepreneurial
opportunities and human activities are positively associated in terms of nature, growth and continuity. In other words,
entrepreneurial opportunity lies in meeting human needs.
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7. What are the social motives in entrepreneurial motivation?
Definition: Motivation is regarded as the inner state that energizes activities and directs or channels behavior
towards the goal. It can also be seen as a process that arouses action, sustains the activity in progress and that
regulates the pattern of activity.
The motives can be categorizes as social and psychological motives.
Few of the social motives are

Self esteem

Social acceptability

Competence building

Wealth generation

Self actualization

Motives are not necessarily the gifts of heredity but are the outcome of the individuals interactions with others or the
society.
More revision on Entrepreneurial Motivation
8. Why are entrepreneurs moderate risk takers?
9. Mention a few rules for effective communication.
10. Name any three central level financing institutions supporting entrepreneurs.

II. Answer the following questions in a sentence each:

1. How do people generally earn their living?
According to the famous quote by Rober Louis Stevenson (R.L.Stevenson), Every one lives by selling
something.
This quote proves out to be true with any person. If we carefully observe the society, we can notice that people will
either

Sell goods : people selling clothes, electronic goods, food items, industrial goods, automobiles etc come
under this class.

Sell services : people who provide engineering services, medical services, legal services, educational
services etc come under this class.

2. How do entrepreneurs differ from employers?

Employee: Employed under some one and works for them to earn their income, for living.
Entrepreneur: Work for themselves and own their business/venture. They take complete accountability of the
business and consider themselves responsible for the success or failure of their enterprise.
3. When does a problem become an opportunity?
A problem becomes an opportunity when it is considered as a challenge to solve leading to an economically viable
solution.
4. How are entrepreneurs different from others in perceiving an opportunity?
Entrepreneurs are different from other in perceiving an opportunity in the following ways:

They are quick in perceiving the opportunity.

They will be able to collate the available information.

They will be able to analyze the patterns which are not usually ignored by others.

5. What are the two basic roles of an entrepreneur?

The two basic roles of an entrepreneur are:

Opportunity spotter

Project champion

III. Answer the following questions in about 200 words each :

1. What is meant by Sensing Entrepreneurial Opportunities? Explain the important factors involved with
suitable examples.
Sensing entrepreneurial opportunities: It is a process of
1.
perceiving the opportunities from the problems and needs of people and society (quickly)
2.

or create or craft business opportunities (by innovating new products/services that are not already in
existence)

3.

synthesize the available information

4.

analyze the pattern emerging out of this information

5.

arrive at creative solutions to meet the needs or resolve the problems.

The following factors play a key role in sensing of entrepreneurial opportunities.

a.

Ability to perceive and preserve basic ideas.

The following are the various sources which lead to the emergence of basic ideas.

Problems: When a problem exists and an idea leads to a solution to resolve that problem, it

emerges as a business opportunity.

Change: A change in social, legal, technological aspects etc. leads to new opportunities to start a

business.
Inventions: Invention of new products or services leads to new business opportunities.
Competition: Competetion often results in emergence of new and better ideas that result in new

business opportunities.
Various sources like magazines, journals, books, seminars, trade shows, family members, customers, friends etc
help in getting information that helps in evolution of basic ideas.
b.

Bring together various sources of information and knowledge, and analyze it to the best possible extent. The
analysis helps in the identification of the right opportunity to start a new business.

c.

Creativity in innovating a solution and vision. The entrepreneur should be able to creatively identify an idea
to generate a valuable solution to a problem. Once the solution is identified their vision to convert the solution
into business opportunity help them to move forward, overcoming all the obstacles. They constantly

overcome the adversity

will be able to exercise control over the business

will be capable of making significant difference.

2. What are the major categories of entrepreneurial ideas? Discuss them with an example each from your
observations and reading.
The (sources of) entrepreneurial ideas can be majorly classified under the following four categories.
1.

2.

Problems: Most often an innovative solution to a problem leads to an entrepreneurial business opportunity.
Cable telephones were a major limitation interms of mobility. They were always confined to a limited area and
communication was very limited. This lead to the research for mobile and wireless technology that lead to the
emergence of cell phones.
Change: A change in either

3.

4.

Social

Legal or

Technological

will lead to new business opportunities.

The social change has lead to a change in the fashion technologies. For example the evolution of the Jeans
and T-Shirt market to dominate conventional formal dresses is best example. Another major example is a
development in cooking technology that is slowly replacing the cooking gas stoves with induction cooking
devices.
Inventions: Creation of new products or services that have values falls under this category. It can also be
innovative improvements to an existng product or service. A change from conventional key pad operated mobile
phones to the modern smart phones is an example of invention.
Competition: To dominate the market and to overcome the competition from the competitors, entrepreneurs
rely on new and improved ideas. Inclusion of the smart technology in the television where in the hand
movements are recognized by television to operate it and to play games is a best example. The 3D television
market emerging is also an example where in new and improved ideas are included into the products to beat the
competition.

Scanning Of Environment
Important Note :The latest notes is available at class 12 Entrepreneurship

I. Answer the following questions in a sentence each :

1. From what do entrepreneurs spot opportunities.
Entrepreneurs spot opportunities from various ideas generated by analyzing the various sources of information.
2. What are the two ways in which entrepreneurs receive opportunities?
The two ways in which entrepreneurs receive opportunities are by scanning the environment and

generating innovative ideas to the needs and

inventing solutions to problems.

3. What is the crucial requirement for a successful venture?

The crucial requirements for a successful venture are
1.

Sensing of existing opportunities.

2.

Innovate new ideas and there by creating opportunities

and more essentially interacting with the environment.

4. What is the interface between spotting and product-identification?

The interface between spotting and product-identification is the evaluation of various crucial environment
parameters.
5. What does the word scan mean?
Literally, scan means to examine closely. It is especially used in the context of searching for something.

II. Answer the following in 50-60 words each.

1. What are the three steps involved in the process of sensing entrepreneurial opportunities.
The three steps involved in the process of sensing entrepreneurial opportunities are
1.

Scanning of the environment: To be of economic value, the entrepreneurial oppportunity identified should
be compatible with the following environmental factors:

Cultural

Developmental

Economic

Financial

Government and non-governmental institutional support

Legal

Political

Social

and other developmental factors

This requires a thorough scanning of the environment to understand these factors.

2.

Generation of ideas: The scanning of the environment help in collecting different ideas. This leads to an
innovative product or service. This entire process is called Generation of ideas.
3.
Identification of product or service: After generating the idea for an innovative product or service, the
entrepreneur should evaluate the product or service. If the product or service exists in the current market, there
should identify strong reason to introduce the product into the market. If the product or service is entirely new,
they should take necessary steps to introduce it into the market.
2. What do you understand by Scanning of Environment?
Scanning of environment is the first step in the sensing of entrepreneurial opportunity. It is required to ensure that
the identified entrepreneurial opportunity is compatible with various environmental factors as described below.

Developmental and institutional factors: The encouragement and guidance of various governmental and

non-governmental institutions plays a vital role in the setting up of an enterprise.

Economic Factors: The vital economic factors like demand and supply will determine the size of the

enterprize. The health of the economy will also determine the various means of financing the business.
Financial Factors: The fnnds required for starting up an enterprise requires a close examination of the

available financial institutions and other sources of funding.

Social and cultural factors: Evaluating the social and cultural factors is essential before implementing a

business concept. This will ensure that the product or service is compatible with the needs of the population
living in a specific region.
Legal factors: Starting an enterprise involves fulfilment of various legal requirements. Thus the environment
has to closely scanned for legal factors.

Political Factors: Various govermental policies prevailing in the society will affect the setting up of the
enterprise. Thus a thorough scanning of the political factors is required.

3. Why is environment an important factor for entrepreneurship?

Environment plays a crucial role in setting up of an enterprise because of the influence of various environmental
factors as described below.

Developmental and institutional factors: The encouragement and guidance of various governmental and

non-governmental institutions plays a vital role in the setting up of an enterprise.

Economic Factors: The vital economic factors like demand and supply will determine the size of the

enterprize. The health of the economy will also determine the various means of financing the business.
Financial Factors: The fnnds required for starting up an enterprise depends on the availability financial

institutions and other sources of funding and the policies followed by them.
Social and cultural factors: Evaluating the social and cultural factors plays a vital role and requires that the

enterprise is compatible with the needs of the population living in a specific region.
Legal factors: Starting an enterprise involves fulfilment of various legal requirements. Thus these factors

have a crucial role in setting up of an enterprise.

Political Factors: Various govermental policies prevailing in the society will affect the setting up of the
enterprise. Thus political factors needs consideration for setting up of an enterprise.

III. Answer the following in about 200 words each.

1. Sensitivity to environmental factors is crucial for an entrepreneur. Discuss with suitable examples.
Sensitivity to environmental factors is crucial for an entrepreneur because of the following reasons.
a.

b.

A major portion of the opportunities are from the environment. A close examination of the surroundings may
help a person about the lack of facilities that the people are suffering from. For instance, a person might notice
that there is scarcity of cooking gas supply and the power supply and starts a business to sell solar operated
cooking equipment and heating equipment thus capitalizing the opportunity. Capitalizing opportunities like this
will not be possible if the entrepreneurs are not sensitive to the surrounding environment.
A similar example will be that of an entrepreneur who senses that the demand for a seasonal events like those of
marriages, national or religious celebrations can be capitalized.
The nature of the enterprise is solely dependent on the environment. A person can not start a business to
sell modern wear like Jeans and T-Shirts in a village environment where in the demand for traditional wear is
more and vice versa. Similarly a person can not start non-vegetarian food supply in the geographical regions
where in the majority of the population is vegetarian. Such mistakes wont happen if the entrepreneur has a
greater sensitivity to the conditions prevailing in the surrounding environment.

c.

The success of the enterprise depends on its ability to meet the consumer needs.
Usually in winter there is demand for heating equipment or woolen clothes. Cotton clothes have less demand. It
is the opposite in summer. An entrepreneur should have greater sensitivity to such facts and should be able to
meet the demand from the consumers.
2. Why is scanning of environment considered as an interface between spotting and product identification?
Support your answer with at-least one example.
Im still in the process of preparing an answer for this

Generation of Ideas

Important Note :The latest notes is available at class 12 Entrepreneurship

I. Answer the following questions in a sentence each :

1. What is the basic function of the process of environment scanning?
The basic function of Scanning of environment is Detailed Investigation of the environment with respect to
a.
Developmental factors
b.

Economic factors

c.

Social and cultural factors

d.

Political factors

to confirm that the entrepreneurs innovation is compatible with these factors.

2. What is a field of ideas?
Field of ideas is a convenient frames of reference which will help and entrepreneur in streamlining the process of
generation of ideas.
3. What do you understand by the term generation of ideas?
Generation of ideas refer to conscious endeavor to innovate a solution to a problem or need by collecting ideas from
different sources.
4. What is brainstorming?
Brainstorming refers to an unstructured productive discussion where in a group of persons gather together to
generate a number of innovative business ideas to meet the needs or solving problems.
5. Name one source of internal opportunities.
An Internal Opportunity (as opposed to external opportunity) is something that comes from inside an entrepreneur
as a result of a hobby or passion or interest. A person fond of smart phones might develop a smart phone application
(something like whatsapp) and introduces to the world. A person interested in acting can introduce new innovation in
the style of acting. A person fond of gardening might introduce hybrid flowers/fruits/vegetables. Similar innovation can
be introduced in areas like photography, painting, magic-illusion etc.
6. Why should an entrepreneur be keen and alert?
a.
An entrepreneur should be keen listener to what others say, inquisitively (having or showing an interest in
learning things; curious) to get a good understanding of peoples

b.

i.

tastes

ii.

problems

iii.

wants

iv.

and preferences.
They should be alert and open so as not to miss an opportunity to grab a new idea.

Thus by being keen and alert entrepreneurs gather information which will help them to innovate better products or
services by meeting the customer demands.
7. How are idea fields useful in generation of ideas?
Idea fields are useful in the generation of ideas in the following ways
a.
They increase the awareness of the entrepreneur about various fields
b.

They streamline the process of idea generation

c.

They broaden the scope of thinking

d.

They form convenient frames of reference to simplify the process of idea generation.

.
8. What is trading? What advantage does it possess over manufacturing?

Purchasing goods and services and then selling them to consumer for a profit is called as trading. It has the
advantage of
a.
easiness to launch
b.

less amount of risk

9. Give two examples of service sector ideas.

Service sector ideas can be classified as
a.
Those that are linked with existing industrial enterprises like
i.

Gardening

ii.

Painting

iii.

Transport

iv.

Workshop

v.

Maintenance

vi.

Security

vii.

Catering

viii.

Cleaning

b.

Those that are linked with commercial establishments like

i.

Advertisement

ii.

Book-keeping

iii.

Computer center

iv.

Courier service

v.

Photocopy

vi.

Printing

vii.

Stationary supply

viii.

Telecom center

c.

Those that are help the commercial establishments to cater to their regular day to day requirements like
i.

Bill Collection

ii.

Repairs

iii.

Maintenance

iv.

Pest Control

v.

Water Supply

vi.

Water tank cleaning

vii.

Travel arrangements

Im still in the process of preparing an answer for this

10. What are the three important issues to be considered for sustainable development?
The three important issues that should be considered for sustainable development by the entrepreneurs are
1.

Consonance

with values

2.

Environmental protection

3.

Judicious

management of natural resources

II. Answer the following in about 50 words each.

1. Briefly outline the process of sensing entrepreneurial opportunities, describing each stage with an
example.
The process of sensing entrepreneurial opportunities has three basic steps
1.
Spotting ideas: In this step certain basic ideas are received. The entrepreneur then uses this creative
process of spotting of ideas. At the end, the ideas will be harnessed and acquire much better shape. For
instance, when someone wants to bring an innovative education system, he might end up with a an idea to start
a school where the lessons are taught to kinds through 3D hologram technology, to imbibe the concepts much
better into their minds and also to give a feeling of interactive learning.
2.
Scanning of the environment: The entrepreneur then scans the environment. In this step the ideas are
evaluated against the prevailing environment. At the end of the process, the potential and viability of the idea will
be determined. In this step, for the above example, the entrepreneur will evaluate the interest of parents, the
availability of the supporting technology, the willingness to pay the huge tuition fees by the parents.
3.
Selecting the product or service: At end, an innovative product or a service is identified and the
entrepreneur is ready to establish and enterprise. The entrepreneur is now ready to proceed with the starting of
this school.
2. What is the difference between basic ideas and post-scanning ideas?

Basic Ideas

Post Scanning Ideas

Basic ideas refer to the randomly spotted ideas

during the initial phase.

Post scanning ideas emerge with a purpose

to fulfil.

This process is experiencial in nature.

This process is more strategic in nature.

To become potential opportunities, the basic ideas

have to go through the process of
a.
Analysis

The post scanning ideas are emerged by

strategically positioning the
a.
skill

b.

Evaluation

b.

knowledge

c.

Close examination

c.

creative thinking and

d.

Synthesis

d.

competency

against the prevailing environment in the

market.

3. How is market survey useful to an entrepreneur?

Market dynamics play a critical role and have a great influence on all the enterprises. Market survey helps
entrepreneurs to
1.
Generate new ideas
2.

Keep their products/services competent and take actions depending on the demand in the market.

Market surveys help the entrepreneur to get valuable information about

1.

demand

2.

supply

3.

changes in consumer behavior

The information gathered by the marketing agencies also comes in handy in this regard.
The marketing survey analysis provides us valuable information on various factors like
1.
Gap between demand and supply ex: Demand for LPG gas is more and supply is less. Ideas for alternative
sources of energy like solar.
2.

Scope for manufacturing a product indigenous, if it is being imported. Currently various electronic
components are imported. Or for treatment of certain diseases, people visit foreign countries.

3.

Scope for improving various services. Food deliver system or bill collection system requires an
improvement.

4.

Scope for the production of products with lower/cheaper cost. Solar panels are very expensive.

All these help in generation of ideas for a new product or service.

4. What are the five ways in which creative ideas can be generated?
Im still in the process of preparing an answer for this

III. Answer the following in about 200 words each.

1. Describe the different methods adopted by entrepreneurs to generate ideas with at least one example for
each.
Im still in the process of preparing an answer for this
2. Comment on the following diagram.

Im still in the process of preparing an answer for this

3. Discuss any three fields of ideas with suitable examples.
Im still in the process of preparing an answer for this
4. Write a critical analysis of the concept of sustainable development with special reference to

Entrepreneurship.
Im still in the process of preparing an answer for this

Product Identification
What is the first sign that specifies that a person possesses entrepreneurial talent?
The first sign that specifies that a person possesses entrepreneurial talent is the ability to spot or identify an
entrepreneurial opportunity or idea.
Which qualities set an entrepreneur much ahead of others?
While most of the persons are good at just perceiving the ideas, the entrepreneur is good at perceiving the ideas
backed by appropriate action to convert those ideas into potential business opportunities. This sets the entrepreneur
way ahead of others.
Which personality traits drive an entrepreneur to convert spotted opportunities into commercially feasible
opportunities?
The following personality traits drive an entrepreneur to convert spotted opportunities into profitable business
ventures.
1.
Talent: He/She should have minimum levels of innovative and creative skills and should be able to perceive
a long term futuristic vision which help him to gauge future prospects of the idea.
2.
Temperament: Temperament helps the entrepreneur to implement the identified idea into a profitable
project. Temperament is exhibited through
a.
determination

3.

b.

boldness to take action

c.

enthusiasm

d.

zeal to carry out the proposed mission

e.

Any other qualities that put him into action to convert the idea into venture.

Technique: He/She should have/know various techniques to manage various resources like money, men,
material, machines and more importantly time
Why should the entrepreneur be very careful while generating the ideas?
The entrepreneur should be very careful while generating the ideas because the implementation of the idea without a
detailed investigation, without consulting the experts, could result in losses.
What is investigation of ideas?
Investigation of ideas is a series of activities performed to gauge the potential of the idea to convert it into
economically viable opportunity.
Why should an entrepreneur consider the investigation of the idea?
After idea generation it is essential for the entrepreneur to consider the investigation of the idea to gauge its
economic viability. Directly jumping into implementation after generating the idea could result in a failed venture. So
investigation of the idea is critical.
Which factors play a key role in deciding the price of a product or service?
Unit cost of a product for a particular operation and whether this cost is comparable with similar unit cost of the
product for this operation will determine the sales price of the product.
Define annual turnover.
The total sales of a product or service in a year is defined as the annual turnover of the company.
Define market assessment.
The study of various critical aspects like quality of the product, supply sources and delivery mechanism is considered
as the market assessment.
Define feasibility report.

Feasilbility report is the report prepared considering all the key factors that contribute to the entrepreneurial success
of the product or service under consideration.
Give an account of talent, temparament and technique contribute to the entrepreneurial process.
1.
Talent: He/She should have minimum levels of innovative and creative skills and should be able to perceive
a long term futuristic vision which help him to gauge future prospects of the idea.
2.
Temperament: Temperament helps the entrepreneur to implement the identified idea into a profitable
project. Temperament is exhibited through
a.
determination
b.

boldness to take action

c.

enthusiasm

d.

zeal to carry out the proposed mission

e.

Any other qualities that put him into action to convert the idea into venture.

3.

Technique: He/She should have/know various techniques to manage various resources like money, men,
material, machines and more importantly time
What are all the factors that play key role in testing an idea.
The following are the factors that play a key role in the testing of an idea.
1.
Product or service identification.
2.

Application and usages

3.

Scale of operation

4.

Cost involved

5.

Level of competition

6.

Technological challenges

7.

Profitability and annual turnover.

What role does the market supply play on the business idea?
Market supply refers to the comprehensive details of the total quantity of the product made available in the market by
all existing competitors. Along with the current players, we should take into account the future players that are likely to
etner the market. If the product or service is seasonal, it is usual practice that the supply will increase during the
season. These kind of fluctuations should also be taken into consideration. All these existing players are competitors
to the entrepreneur. So, the entrepreneur should pay special and deep attention to their current manufacturing
capacity, fluctuation in the supply from them, the financial standing, the good will of their product or service.
For example, when an entrepreneur wants to start a garment industry, they should thoroughly investigate all the
existing brands available in the market, the manufacturing capacity, their popularity in the market, the increase in the
demand during the festive season, holidays, seasonal changes etc.
What is the impact of market on the entrepreneurship business idea?
The market will influence the business idea in the following ways:
a.
Demand: There should be demand for the product. The demand usually depends on the size of the market
in which the product is being launched. Demand assessment also requires the study of the target consumers of
the product or service, their preferences and any other parameters that are likely to impact the demand for the
product.
b.
Market supply and nature of competition: The entrepreneur should calculate the total supply of the
product, the current competitors, future competitors, fluctuations in the supply to meet the corresponding
fluctuations in demand, financial standard of the competitors, their goodwill in the market etc. All these factors
should be deeply studied.

c.

d.

Cost and Price: Unit cost of the product for a given operation play a critical role while identifying the product
and also in determining the price. The cost born by the competitors interms of transportation delays, wastage,
maintenance of inventory should be studied to take advantage of these factors and present a competitive price.
Product Innovation and changes: The entrepreneur should study the innovations and changes being
introduced in the same sector by the other entrepreneurs who are already int eh market or about to enter the
market. Changes in the technology should be closely monitored as these changes are likely to reduce the cost in
improve the quality there by bringing competitive advantage.