Entrepreneurship Entrepreneurship involves capital. But, it is not just the finance that makes an entrepreneur.

A capitalist is one who provides the funds. And stops with that. He has an expectation of a return on investment.

The meaning

Entrepreneurship An entrepreneur is one who combines various factors like creating the infrastructure to make a product, sourcing materials, production, selling, managing employees, managing funds, and ensuring that a profit is made. The meaning He is one who ensures that money works.

Entrepreneurship

So, while a capitalist merely ensures access to money, the entrepreneur has to acquire mastery over supervising and administration. The meaning

Entrepreneurship Where an entrepreneur borrows funds for his venture, he also bears the risks, and ensures that he comes out with a profit. There is need for a tremendous amount of knowledge in an entrepreneur technical, financial, marketing, HR and administrative.

The meaning

Entrepreneurship

It is, however, not necessarily true that all this for only a new venture. The meaning

Entrepreneurship Any new project that is undertaken by an individual is called entrepreneurship. An existing businessman going in for a new line, is also an entrepreneur.

The meaning

Entrepreneurship The word entrepreneurship then takes on a more comprehensive meaning. Innovation. Any new project is a result of entrepreneurship. The key word in the entire concept of entrepreneurship is creativity .

The meaning

Entrepreneurship

Now, take the circumstance a step further. Does entrepreneurship relate only to individuals who are, or wish to enter, into a new line of business? Even companies have ambitions of diversifying, adding to product lines, enhancing the scope for their company to earn more

The meaning

Entrepreneurship

Growth of a company into new lines is called intrapreneurship . The difference between the individual and the company is that, in the case of intrapreneurship, the company identifies the new opportunity, the company finds the source of funding, the company sets up the infrastructure, the company identifies the marketing opportunity, and the company establishes the profit ambitions.

The meaning

Entrepreneurship Above all, the company bears all the risks. No individual in the company has any liability for the funds employed. The meaning

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The entrepreneur is solely and fully responsible for his funds. Said differently, you could conclude that the entrepreneur has to be reasonably sure of the success of his ideation. Whereas, failure of intrapreneurship probably just means the company has a loss of profit from its other businesses.

The meaning

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Is an entrepreneur a manager? Yes.

Is a manager an entrepreneur? Not necessarily! The meaning

There are just a few essential differences

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Venture Risk Reward Contd.?

E New Yes Profit No Ind. No qual. Creative

M Existing No Salary Yes Not Ind. Qual.

The meaning

Status PrePre-req.

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Qualities of an entrepreneur Initiation Watching for opportunities Information seeker Quality conscious Commitment to work Efficiency lover Proper planning Self confidence Assertiveness Persuasion Concern for employees

The meaning

Entrepreneurship Clear cut objectives Efficient business planning Proper size, location & layout Sound organisation Financial planning Marketing network Executive development Dynamic management Human relations R&D

Success in business

Entrepreneurship Definitions of small business in India: Small scale industries Ancillary industries Tiny units Small scale service establishments Household industries

Types of businesses

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Small business characteristics

Personal character Closely held Local area of operations Labour intensive Indigenous resources Simple organisation Limited scale of operations

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Relationship with large businesses

Competitive Supplementary Complementary Initiative Servicing Jobbing Merchandising Anciliarisation

Entrepreneurship Small Personal Local area Labour int. Small invest. Decentralised Indep.mgt. Small Vs Large Large Impersonal Wider area Capital Int. Large Invst. Centralised Ownership & Mgt. not related

Entrepreneurship Small Large Propr./Part. Joint stock Uneconomic Economic Unorg.labour Org.labour Ltd.expansion Economy of scale and expansion scope Small Vs Large

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Types of small industries

Manufacturing industries Feeder industries Serving industries Ancillary to large industries Mining or quarrying

Entrepreneurship To generate immediate & large scale employment opportunities with relatively low investment To reduce unemployment To encourage dispersal of industries all over, particularly economically lagging regions

Objectives of small industries

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Objectives of small industries

To bring backward areas into the mainstream of national development To promote balanced regional development To ensure equitable distribution of national income

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Objectives of small industries

To ensure mobilisation of country s untapped capital and human resources To improve level of living of the people of the country

Entrepreneurship Raw materials Finance Marketing Underutilisation of capacity Outdated technology Poor project planning Inadequate infrastructure Absence of vertical growth Quality consciousness Cost structure

Problems of small scale industries

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Year 1977 Units 2.96 Prodn 14300 Empl. 54.0 Exports 545

1992

22.35 209300 134.1

13660

1998

31.21 527515 171.6

49481

Growth of the small scale sector in India

Prodn: Rs lakhs Employment: Lakhs Exports: Crores

Entrepreneurship

In most small businesses, the owner himself acts as the Chief Executive, and looks after more than one functional area.

Management process in small business

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Planning process
It is the process deciding the objectives of the business and choosing the most appropriate course of action. It helps to Focus attention on objectives Provides direction to decision making Assists in facing uncertainty and change Improves efficiency of operations, Facilitates coordination and control

Management process in small business

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Steps to systematic planning
Mission statement Analysis of external environment Analysis of internal environment Formulation of objectives Development of action plan Execution and review of plans

Management process in small business

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The organizing process

Activities analysis - Production - Marketing - Finance - Personnel Decisions analysis - Grouping tasks - Choosing organization structure - Relations analysis Specific positions and activities are interlinked through the chain of command and horizontal relationships

Management process in small business

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Types of organisation structures Line organisation Line & staff organisation Project organisation Matrix organisation

Management process in small business

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Principals of a sound organisation Division of work Unity of command Parity between authority and responsibility Scalar chain Departmentalisation Balancing between centralisation & decentralisation Appropriate span Human use of human resources Flexibility

Management process in small business

Entrepreneurship

Leadership & motivation Qualities of a good leader - Physical - Intellectual - Moral - Social Communication The importance of feedback Controlling Management of time

Management process in small business