What is Entrepreneurship?

Entrepreneurship is the willingness to take risks and develop, organize and

manage a business venture in a competitive global marketplace that is
constantly evolving. Entrepreneurs are pioneers, innovators, leaders and
inventors. They are at the forefront of technological and social movements in
their fields, in their forward thinking, in their desire to push the envelope. They
are dreamers and most importantly doers.
PERSONAL ENTREPRENEURIAL COMPETENCIES
The term "ENTREPRENEURIAL COMPETENCIES" refers to the key characteristics
that should be possessed by successful entrepreneurs in order to perform
entrepreneurial functions effectively.
Entrepreneurial Competencies
1. Initiative
The entrepreneur should be able to take actions that go beyond his job
requirements and to act faster. He is always ahead of others and able to become
a leader in the field of business.
Examples
Does things before being asked or compelled by the situation.
Acts to extend the business into new areas, products or services

2. Sees and acts on opportunities

An entrepreneur always looks for and takes action on opportunities.
Examples
Sees and acts on new business opportunities
Seizes unusual opportunities to obtain financing, equipment, land, work
space or assistance

3. Persistence
An entrepreneur is able to make repeated efforts or to take different actions to
overcome an obstacle that get in the way of reaching goals .
Examples
Takes repeated or different actions to overcome an obstacle
Takes action in the face of a significant obstacle

4. Information Seeking
An entrepreneur is able to take action on how to seek information to help achieve
business objectives or clarify business problems.
Examples
Does personal research on how to provide a product or service
Consults experts or experienced persons to get relevant information
Seeks information or asks questions to clarify a client's or a supplier's
need
Personally undertakes market research, analysis or investigation
Uses contacts or information networks to obtain useful information

5. Concern for High Quality of Work

An entrepreneur acts to do things that meet certain standards of excellence
which gives him greater satisfaction.
Examples
States a desire to produce or sell a top or better quality product or service
Compares own work or own company's work favorably to that of others
6. Commitment to Work Contract
An entrepreneur places the highest priority on getting a job completed.
Examples
Makes personal sacrifice or expends extraordinary effort to complete a job
Accepts full responsibility for problems in completing a job for customers
Pitches in with workers or works in their place to get the job done
Expresses a concern for satisfying the customer

7. Efficiency Orientation
A successful entrepreneur always finds ways to do things faster or with fewer
resources or at a lower cost.
Examples

Looks for or finds ways to do things faster or at less cost

Uses information or business tools to improve efficiency
Expresses concern about costs vs. benefits of some improvement, change,
or course of action

8. Systematic Planning
An entrepreneur develops and uses logical, step-by-step plans to reach goals.
Examples
Plans by breaking a large task down into sub-tasks
Develops plans that anticipate obstacles
Evaluate alternatives
Takes a logical and systematic approach to activities

9. Problem Solving
Successful entrepreneur identifies new and potentially unique ideas to achieve
his goals.
Example
Switches to an alternative strategy to reach a goal
Generates new ideas or innovative solutions

10. Self-Confidence
A successful entrepreneur has a strong belief in self and own abilities.
Examples
Expresses confidence in own ability to complete a task or meet a
challenge
Sticks with own judgment in the face of opposition or early lack of success

11. Assertiveness
An entrepreneur confronts problems and issues with others directly.
Examples
Confronts problems with others directly
Tells others what they have to do
 Reprimands or disciplines those failing to perform as expected

12. Persuasion
An entrepreneur can successfully persuade or influence others for mobilizing
resources, obtaining inputs, organizing productions and selling his products or
services.
Examples
Convinces someone to buy a product or service
Convinces someone to provide financing
Convinces someone to do something else that he would like that person to
do
Asserts own competence, reliability, or other personal or company
qualities
Asserts strong confidence in own company's products or services

13. Use of Influence Strategies

An entrepreneur is able to make use of influential people to reach his business
goals.
Examples
Acts to develop business contracts
Uses influential people as agents to accomplish own objectives
Selectively limits the information given to others
Uses a strategy to influence or persuade others

What is the Role of an Entrepreneur in

Economic Development?
The entrepreneur who is a business leader looks for ideas and puts them into
effect in fostering economic growth and development. Entrepreneurship is one of
the most important input in the economic development of a country. The
entrepreneur acts as a trigger head to give spark to economic activities by his
entrepreneurial decisions. He plays a pivotal role not only in the development of
industrial sector of a country but also in the development of farm and service
sector. The major roles played by an entrepreneur in the economic development
of an economy is discussed in a systematic and orderly manner as follows.
(1) Promotes Capital Formation:
Entrepreneurs promote capital formation by mobilizing the idle savings of public.
They employ their own as well as borrowed resources for setting up their
enterprises. Such type of entrepreneurial activities lead to value addition and
creation of wealth, which is very essential for the industrial and economic
development of the country.
(2) Creates Large-Scale Employment Opportunities:
Entrepreneurs provide immediate large-scale employment to the unemployed
which is a chronic problem of underdeveloped nations. With the setting up. Of
more and more units by entrepreneurs, both on small and large-scale numerous
job opportunities are created for others. As time passes, these enterprises grow,
providing direct and indirect employment opportunities to many more. In this
way, entrepreneurs play an effective role in reducing the problem of
unemployment in the country which in turn clears the path towards economic
development of the nation.
(3) Promotes Balanced Regional Development:
Entrepreneurs help to remove regional disparities through setting up of
industries in less developed and backward areas. The growth of industries and
business in these areas lead to a large number of public benefits like road
transport, health, education, entertainment, etc. Setting up of more industries
lead to more development of backward regions and thereby promotes balanced
regional development.
(4) Reduces Concentration of Economic Power: Economic power is the
natural outcome of industrial and business activity. Industrial development
normally lead to concentration of economic power in the hands of a few
individuals which results in the growth of monopolies. In order to redress this
problem a large number of entrepreneurs need to be developed, which will help
reduce the concentration of economic power amongst the population.
(5) Wealth Creation and Distribution: It stimulates equitable redistribution of
wealth and income in the interest of the country to more people and geographic
areas, thus giving benefit to larger sections of the society. Entrepreneurial
activities also generate more activities and give a multiplier effect in the
economy.
(6) Increasing Gross National Product and Per Capita Income:
Entrepreneurs are always on the lookout for opportunities. They explore and
exploit opportunities,, encourage effective resource mobilization of capital and
skill, bring in new products and services and develops markets for growth of the
economy. In this way, they help increasing gross national product as well as per
capita income of the people in a country. Increase in gross national product and
per capita income of the people in a country, is a sign of economic growth.
(6) Improvement in the Standard of Living: Increase in the standard of
living of the people is a characteristic feature of economic development of the
country. Entrepreneurs play a key role in increasing the standard of living of the
people by adopting latest innovations in the production of wide variety of goods
and services in large scale that too at a lower cost. This enables the people to
avail better quality goods at lower prices which results in the improvement of
their standard of living.
(7) Promotes Country's Export Trade: Entrepreneurs help in promoting a
country's export-trade, which is an important ingredient of economic
development. They produce goods and services in large scale for the purpose
earning huge amount of foreign exchange from export in order to combat the
import dues requirement. Hence import substitution and export promotion
ensure economic independence and development.
(8) Induces Backward and Forward Linkages: Entrepreneurs like to work in
an environment of change and try to maximize profits by innovation. When an
enterprise is established in accordance with the changing technology, it induces
backward and forward linkages which stimulate the process of economic
development in the country.
(9) Facilitates Overall Development: Entrepreneurs act as catalytic agent for
change which results in chain reaction. Once an enterprise is established, the
process of industrialization is set in motion. This unit will generate demand for
various types of units required by it and there will be so many other units which
require the output of this unit. This leads to overall development of an area due
to increase in demand and setting up of more and more units. In this way, the
entrepreneurs multiply their entrepreneurial activities, thus creating an
environment of enthusiasm and conveying an impetus for overall development of
the area.

The Entrepreneurship Process

Entrepreneurship Process:
The process of pursuing a new venture is embodied in the entrepreneurial
process, which involves more than just problem solving in a typical management
position. An entrepreneur must find, evaluate, and develop an opportunity by
overcoming the forces that resist the creation of something new
Entrepreneurial process can be defined as the process through which a new
venture is created by an entrepreneur. This process involves finding, evaluating,
and developing an opportunity by overcoming the strong forces that resist the
creation of something new.
Steps in entrepreneurial process, the process has four distinct phases:
(1) Identification and evaluation of the opportunity,
(2) Development of the business plan,
(3) Determination of the required resources, and
(4) Management of the resulting enterprise.
Although these phases proceed progressively, no one stage is dealt with in
isolation or is totally completed before work on other phases occurs. For
example, to successfully identify and evaluate an opportunity, an entrepreneur
must have in mind the type of business desired.

The Benefits of Entrepreneurship

Any individual, who possesses a business, firm, or venture, is known as an

entrepreneur. He or she is accountable for its development, the inherent risks
and returns associated with it. Entrepreneurship is defined as the practice of
beginning a new trade or reviving an existing business, for capitalizing on fresh
opportunities. Normally, entrepreneurship is a difficult proposition as many new
businesses fail to survive in their initial periods and never take off whatever may
be the course of action, entrepreneurship has a lot of benefits both for the
entrepreneurs and the society in which these businesses are carried out. Some of
these benefits include:

1. Opportunity to get control.

Owning a firm or a business endows the entrepreneurs with the independence

and opportunity to control their own business. They can aim to achieve targets
that are important to them. Entrepreneurship provides entrepreneurs a chance to
take decisions according to their own wishes.
2. Offers a chance to make a difference

Some people begin and put a lot of effort just to make a difference in society.
This has given rise to the concept of social entrepreneurship, which is a recent
phenomenon. Such people search for opportunities to serve a cause that is
significant to them and try to find pioneering solutions to some of the most
pressing and challenging problems of society.

3. To reap high Profits

Reaping high profits by being an entrepreneur is one of the most important

factors that motivate people to become one and take up all the challenges
associated with it. The profits their companies and businesses make play a vital
role in any decision made by entrepreneurs. Owning a business or a firm is the
best way towards accumulation of wealth.

4. Helps people work to their full potential

Many entrepreneurs find their work to be extremely enjoyable. They consider

their business as an instrument of self-actualization and self-expression. Owning
a firm or a business acts as a test for the creativity skills, abilities, and
determination of an entrepreneur and is taken up as a challenge towards
success.

5. Offers a chance to pursue their interests.

Most entrepreneurs dont believe their work to be actual work. Most of them
establish businesses closely associated with their interests. As such, there is no
particular age for retirement of entrepreneurs. With all these benefits people now
consider the alternative of running their own small businesses rather than doing
jobs for others.

The Potential Drawbacks of Entrepreneurship

It is important to know the benefits and possible drawbacks of entrepreneurship.
To be successful entrepreneurs should be 100% sure they want to own a
business.
1. Uncertainty of Income There are no guarantees that an entrepreneur
will make enough money to survive. Some small businesses barely make
enough to pay the owner-manager with adequate income. The median
income of small business owners is $30,000, which is about the same as
wage and salary workers. However, business owners are more likely to
earn higher incomes than wage and salary workers. In the start-up phase a
business often cannot provide an attractive salary for the owner and cover
its financial obligations. This means that the entrepreneur may have to
live on savings for a little while. The owner is the last one paid, so there is
no regularity of income.
2. Risk of Losing Invested Capital Starting a business is all about risk.
And the small business failure rate is relatively high. According to a study
by the National Federation of Independent Businesses (NFIB), 35% of
businesses fail within two years, 54% fail within four years and 64% of
new businesses fail after six years. When a business fails it can be
 financially and emotionally devastating. People contemplating
entrepreneurship should decide how much they are willing to risk.
3. Long Hours and Hard Work the average small business owner works 52
hours per week. In many start-up business, 10 - 12 hour work days on 6 - 7
days of the week with no paid vacations is the norm. Because owners
must often do everything themselves, they experience long, intense,
draining work days.
4. Lower Quality of Life until the Business is Established Long hours
and hard work can affect the entrepreneur's outside life. Business owners
often put their role as company founder ahead of their role as husband,
wife, or parent. Marriages and friendships are some unfortunate casualties
of entrepreneurship. Part of the problem is that most people launch new
businesses between the ages of 25 and 34, just when they start their
families.
5. High Levels of Stress Most entrepreneurs make significant investments
in their companies; they leave behind a steady paycheck, and mortgage
everything to get into business. Failure can mean total financial failure as
well as a psychological blow. This creates high levels of stress and anxiety.
6. Complete Responsibility Entrepreneurship is highly rewarding, but
many entrepreneurs find that they must make decisions on issues they are
not very knowledgeable about. When there is no one to ask for answers,
the pressure can build quickly. The knowledge that these decisions could
decide the success or failure of a business can have a devastating effect
on the business owner.
7. Discouragement Launching a business requires much dedication,
tenacity and discipline. Entrepreneurs may run into many obstacles, some
may even appear to be insurmountable. Disillusionment and
discouragement can set in, but successful entrepreneurs know that every
new business encounters rough patches and that perseverance is required
to get through them.