Scope & Limitations of

Entrepreneurship

Pros & Cons of being an ENT.

(Benefits)
(Problems)

You are the boss

All decisions are yours
All profits are yours
There will be great variety
in roles and tasks
Increases self confidence
Flexible working hours
Work can be very
satisfying
Success will give you
immense satisfaction
You can run it forever

Entrepreneurship
Oxford University

You are alone

All mistakes are yours
All losses are yours
Work may be very heavy,
you have to do
everything
There is great fear
Long working hours
Risk is quite threatening
Pressures will affect
social and family life
Exiting the business is
difficult

Difference between Entrepreneur and a Manager

Dimens
ions
Motive

Entrepreneur

The main motive of an

entrepreneur is to start a
venture by setting up an
enterprise. He nurtures the
venture for his personal
satisfaction.
An entrepreneur is the owner of
an enterprise.

The main motive of a

manager is to render his
services to an enterprise,
already setup by someone
else.

An entrepreneur, being the

owner of an enterprise,
assumes all risks and

A manager, as an employee,
does not bear any risks
involved in the enterprise.

Status

Riskbearing

Manager

A manager is an employee
in an enterprise owned by
the entrepreneur.

Rewar
ds

The reward of an entrepreneur

gets for bearing risks involved
in the enterprise is profit which
is highly uncertain.

A manager gets salary as a

reward for the services
rendered by him in the
enterprise. Salary of a
manager is certain and
fixed.

Innovat
ion

Entrepreneur himself thinks

and decides on what and how to
produce to meet the changing
demands of the customers.
Hence, he acts as an innovator,
also known as changing agent.

A manager executes the

plans prepared by the
entrepreneur. Thus, a
manager simply translates
the entrepreneurs ideas
into practice.

Qualifi
cation

An entrepreneur needs to
possess qualities and
qualifications like high
achievement motive, originality

A manager needs to possess

distinct qualification in
terms of sound knowledge
in management theory and

Limitations:

Entrepreneurship is one which cannot be

forced upon any individual and thus it is limited
to the people who develop it from within.
Sometimes, due to various circumstances, it is
forced on an individual and he/she becomes
entrepreneur by compulsion but generally fails
after some time.
Entrepreneurship requires greater degree of
skills than a normal manager or salaried person

The two most important dimensions are

(i) creativity & innovation and
(ii) managerial skills
The figure emphasises that to be an
entrepreneur, high degree of innovative and
managerial skills are required. Usually, an inventor
has high degree of innovative skill but low
managerial skill. On the other hand, promoters,
managers, administrators, they all possess high
degree of managerial skill but low innovative skill.
So Ent. calls for great degree of skills indeed !!

Reasons for Entrepreneurial Failure

Lack of experience in management

Few trained or experienced human resources
Poor financial management
Rapid growth, not able to get resources
with equal speed, expand too fast
Not developing business linkages
Lack of marketing expertise
Lack of information, acting on wrong info
Incorrect pricing
Improper inventory control
Short term outlook
Changes in Govt. Policy

Failure to maintain quality

Lack of balance between quality & price
Production/ Tech/ Maintenance problems
Theft or such other property destruction, not
having insurance
Not ensuring sufficient raw materials
Not having patent for his innovations
Not conversant with latest developments,
technologies,agencies, rules, policies,
Institutions

Finance Mistakes
Not selecting the correct source for finance
Utilising the Inds. Fin. for buying personal car ,
house and not keeping money for business
Not buying enough fixed assets
Not allocating enough funds for working capital
and similar W.C. mistakes like, poor debtors/
creditors management, too much / too little
inventory .
Poor balance between owned funds and
borrowed funds
Not paying interest properly on borrowed funds

Marketing Mistakes

Not adopting proper product

Not developing regular distributors
Choosing wrong distributors
Poor margin to distributors
Not supplying goods to the chain - stock out
situations
Fear for approaching Corporate clients, selling only
to individuals
Inability to move from non- branded to branded
segment
Not giving small gifts, sales kits, display kits
Wrong packaging , poor labeling etc

HR Mistakes
Not having good deputies
Power politics from family members
Keeping close relatives in key positions
Not allowing professional mgt. but mgt. thru
relatives
Encouraging Spying activities within the
factory, office, business etc
Harsh with employees, friendly with
customers
Not paying well and loosing good employees

Common myths about Entrepreneur

1)Entrepreneurs are driven by money:
. Not so. Entrepreneurs are not driven by greed, nor
are they obsessed by money. The driving ambition of
an Entrepreneur is to realize his vision. They are
motivated by their idea and want to see how to make
it practical.
2)Anyone can succeed in business:
Not so.Entrepreneurs who recognize the difference
between an idea and an opportunity and who think
big enough, start businesses that have a better
chance of succeeding. And the easiest aspect is
starting a business. The hardest aspect is surviving,
sustaining and building a venture.

3)Entrepreneurs

want the whole show to themselves:

Owning and running the whole show effectively put a ceiling on
growth of an organization. It is extremely difficult to grow to a
higher potential venture by working single-handedly. High potential
Entrepreneurs build a team, an organization and a company.
4)Entrepreneurs work longer and harder than managers in big
companies:
There is no evidence to suggest that all Entrepreneurs work more
than their corporate counter parts. Some do, some do not. In any
case they are their own bosses and dont mind hard work .
5)Money is the most important start-up ingredient:
Money is one of the least important ingredients in new venture
success. Entrepreneurs thrive on the thrill of the chase; time and
again, even after an Entrepreneur has made a few crores of rupees
or even more, he/ she will work incessantly on a new vision to build
another company.

3)Entrepreneurs want the whole show to themselves:

Owning and running the whole show effectively put a ceiling on
growth of an organization. It is extremely difficult to grow to a
higher potential venture by working single-handedly. High potential
Entrepreneurs build a team, an organization and a company.
4)Entrepreneurs work longer and harder than managers in big
companies:
There is no evidence to suggest that all Entrepreneurs work more
than their corporate counter parts. Some do, some do not. Some
actually have reported that they work less.
5)Money is the most important start-up ingredient:
Money is one of the least important ingredients in new venture
success. Entrepreneurs thrive on the thrill of the chase; time and
again, even after an Entrepreneur has made a few crores of rupees
or even more, he/ she will work incessantly on a new vision to build
another company.

6) Entrepreneurs should be young and energetic:

Of course, being young and energetic may help, but age
is no barrier. The average age of Entrepreneurs starting
high potential businesses is mid-30s, but there are
numerous examples of Entrepreneurs starting their
businesses even in their 60s. Old people are better in knowhow, experience and contacts
7) Starting a business is risky and often ends up in failure:
Talented and experienced Entrepreneurs are successful.
Further, businesses fail - Entrepreneurs do not. Good
Entrepreneurs raise much better even if they fail once.

8)If an Entrepreneur is talented, success will come his way in a year

or two:
An old maxim among venture capitalist says it all-The lemons
ripen in two and a half years, pearls take seven or eight. A new
business takes at least 3 or 4 years to get established solidly .
9)Any Entrepreneur with a good idea can raise venture capital:
Not so. Out of 100 good business ideas given by Entrepreneurs only
to 3 ideas are funded ultimately.
10)If an Entrepreneur has enough start-up capital, he or she cant
fail:
The opposite is often true; i.e., too much money often creates
euphoria and a spoilt child syndrome. The accompanying lack of
financial discipline and impulsive spending usually lead to serious
problems and failure.

FUTURE SCOPE:

Changing concept: In earlier days, that

farmers and traders were regarded as
entrepreneurs; now the concept has changed
to innovators and contributors to the economic
growth.
Earlier, all that was required for a person was
to start his own business and be his own boss.
Now the scope has expanded
-an entrepreneur not only has to start a business,
but to grow and be successful, he/she has to
keep on innovating and contributing.

Importance of entrepreneurship:
Entrepreneurship plays a very important role in terms of
(a)Generation of employment opportunities
(b)With its small size it is more dynamic, flexible and
capable of making quick decisions.
(c)Ensuring balanced economic development.
Entrepreneurial development accelerates the growth of
small firms in India. A number of small firms are expected
to be more innovative and make the Indian industry
compete in the international market effectively.
The advantages of entrepreneurial development are
that it leads to freedom, flexibility, growth and
development. It also develops leadership quality.