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Characteristics of successful entrepreneur.

1. Passion and Motivation


2. Not Afraid to Take Risks
3. Self-belief, Hard Work and Disciplined Dedication
4. Adaptable and Flexible
5. Product and Market Knowledge
6. Strong Money Management.
7. Effective Planning (Not Over-Planning) Skills
8. The Right Connections
9. Exit Preparedness.
Ability to Question Themselves

Problems faced by entrepreneurs


1. Cash flow management
2. Hiring employees
3. Time management
4. Delegating tasks
5. Choosing what to sell
6. Marketing strategy
7. Capital.
8. Strapped budget
9. Business growth
10. Self-doubt
Types of entrepreneurs
Based on the Type of Business:
1. Trading Entrepreneur:

As the name itself suggests, the trading entrepreneur undertake the


trading activities. They procure the finished products from the
manufacturers and sell these to the customers directly or through a
retailer. These serve as the middlemen as wholesalers, dealers, and
retailers between the manufacturers and customers.

2. Manufacturing Entrepreneur:

The manufacturing entrepreneurs manufacture products. They


identify the needs of the customers and, then, explore the resources
and technology to be used to manufacture the products to satisfy the
customers’ needs. In other words, the manufacturing entrepreneurs
convert raw materials into finished products.

3. Agricultural Entrepreneur:

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The entrepreneurs who undertake agricultural pursuits are called


agricultural entrepreneurs. They cover a wide spectrum of agricultural
activities like cultivation, marketing of agricultural produce, irrigation,
mechanization, and technology.
Based on the Use of Technology:
1. Technical Entrepreneur:

The entrepreneurs who establish and run science and technology-


based industries are called ‘technical entrepreneurs.’ Speaking
alternatively, these are the entrepreneurs who make use of science and
technology in their enterprises. Expectedly, they use new and
innovative methods of production in their enterprises.

2. Non-Technical Entrepreneur:

Based on the use of technology, the entrepreneurs who are not


technical entrepreneurs are non-technical entrepreneurs. The forte of
their enterprises is not science and technology. They are concerned
with the use of alternative and imitative methods of marketing and
distribution strategies to make their business survive and thrive in the
competitive market.

Based on Ownership:
1. Private Entrepreneur:
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A private entrepreneur is one who as an individual sets up a business


enterprise. He / she it’s the sole owner of the enterprise and bears the
entire risk involved in it.

2. State Entrepreneur:
When the trading or industrial venture is undertaken by the State or
the Government, it is called ‘state entrepreneur.’
3. Joint Entrepreneurs:
When a private entrepreneur and the Government jointly run a
business enterprise, it is called ‘joint entrepreneurs.’

Based on Gender:
1. Men Entrepreneurs:

When business enterprises are owned, managed, and controlled by


men, these are called ‘men entrepreneurs.’

2. Women Entrepreneurs:

Women entrepreneurs are defined as the enterprises owned and


controlled by a woman or women having a minimum financial interest
of 51 per cent of the capital and giving at least 51 per cent of
employment generated in the enterprises to women.

Based on the Size of Enterprise:


1. Small-Scale Entrepreneur:

An entrepreneur who has made investment in plant and machinery up


to Rs 1.00 crore is called ‘small-scale entrepreneur.’

2. Medium-Scale Entrepreneur:

The entrepreneur who has made investment in plant and machinery


above Rs 1.00 crore but below Rs 5.00 crore is called ‘medium-scale
entrepreneur.’

3. Large-Scale entrepreneur
The entrepreneur who has made investment in plant and machinery
more than Rs 5.00 crore is called ‘large-scale entrepreneur.’

Other types :
1. Innovating Entrepreneurs:

Innovating entrepreneurs are one who introduce new goods,


inaugurate new method of production, discover new market and
reorganise the enterprise. It is important to note that such
entrepreneurs can work only when a certain level of development is
already achieved, and people look forward to change and
improvement.

2. Imitative Entrepreneurs:

These are characterised by readiness to adopt successful innovations


inaugurated by innovating entrepreneurs. Imitative entrepreneurs do
not innovate the changes themselves, they only imitate techniques and
technology innovated by others. Such types of entrepreneurs are
particularly suitable for the underdeveloped regions for bringing a
mushroom drive of imitation of new combinations of factors of
production already available in developed regions.

3. Fabian Entrepreneurs:

Fabian entrepreneurs are characterised by very great caution and


skepticism in experimenting any change in their enterprises. They
imitate only when it becomes perfectly clear that failure to do so would
result in a loss of the relative position in the enterprise.
4. Drone Entrepreneurs:

These are characterised by a refusal to adopt opportunities to make


changes in production formulae even at the cost of severely reduced
returns relative to other like producers. Such entrepreneurs may even
suffer from losses but they are not ready to make changes in their
existing production methods.

Following are some more types of entrepreneurs listed by


some other behavioural scientists:
1. Solo Operators:
These are the entrepreneurs who essentially work alone and, if needed
at all, employ a few employees. In the beginning, most of the
entrepreneurs start their enterprises like them.

2. Active Partners:
Active partners are those entrepreneurs who start/ carry on an
enterprise as a joint venture. It is important that all of them actively
participate in the operations of the business. Entrepreneurs who only
contribute funds to the enterprise but do not actively participate in
business activity are called simply ‘partners’.

3. Inventors:
Such entrepreneurs with their competence and inventiveness invent
new products. Their basic interest lies in research and innovative
activities.

4. Challengers:
These are the entrepreneurs who plunge into industry because of the
challenges it presents. When one challenge seems to be met, they
begin to look for new challenges.

5. Buyers:
These are those entrepreneurs who do not like to bear much risk.
Hence, in order to reduce risk involved in setting up a new enterprise,
they like to buy the ongoing one.

6. Life-Timers:
These entrepreneurs take business as an integral part to their life.
Usually, the family enterprise and businesses which mainly depend on
exercise of personal skill fall in this type/category of entrepreneurs.

Myths of entrepreneurs
1. Entrepreneurs Are Less Stressed Than Employees

One of the major myths or misconception pertaining to becoming an entrepreneur is that


it is a less stressful job compared to being an employee in some organization. People
think that they should go for being an entrepreneur because it will lead to decreasing
the stress they face at their work. This notion is wrong, being an entrepreneur is more
stressful and pressurizing compared to being an employee where most of your stress
finishes with the work timings.

2. Making Hobby a Business:


The other misconception people have regarding entrepreneurship is that if there is
something that is a hobby of theirs and which can be monetized it can be converted into
a business. A thing being a hobby is different from it being a business. With hobby you
seldom worry about success or failure, but with business you have to take these factors
into consideration and then move forward with the venture. Therefore, turning the hobby
into a business might not be a good idea.

3. Being An Entrepreneur Is A Better Career:


Another misconception about entrepreneurship is that people think that as the condition
of market is not good, so being a business owner is better compared to being an
employee somewhere. This conception is totally wrong as businesses fail at a greater
rate compared to the job cuts. Therefore, considering career as an entrepreneur over
being an employee just because of the market situation is a reason that causes failure.

4. Entrepreneurship Is Genetic:

People think that if any of their family members is or has been in business, then starting
or running a business is in their genetics. There is no such thing as that; rather business
is a science that has to be learned. Therefore, if you are pursuing entrepreneurship out
of this notion, then I am afraid you are on the wrong path.

5. Having Investment Means Starting Business:

There is no denying the fact that the lack of capital is the major hurdle for most of the
entrepreneurs in pursuing their goal, however, the availability of capital does not mean
that you are ready to start a business. Instead of blindly investing your money into a
venture, you need to first learn about things and then decide whether an investment is
worth your capital or not.

6. Become A Part-time Entrepreneur:


To be a successful entrepreneur, you will have to breath, eat, drink and sleep
entrepreneurship. Therefore, in no way is it a part-time job. Hence, don’t take
entrepreneurship as a source of supplementary income; rather consider it a full time job
requiring all your dedication and commitment.

7. One’s Own Boss:

Another charm that attracts people towards entrepreneurship is that in a venture they
are their own bosses, hence they don’t have to respond to anyone. The fact is on the
contrary, as being an entrepreneur means responding to creditors, suppliers, investors
and above all customers. Therefore, if being a boss is your only motive for
entrepreneurship, then think again.
8. It Works Well For Others:

Another factor that attracts people towards entrepreneurship, which is also a myth, is
that if it is working well for others it will work well for you as well. People think that
someone in their circle of friends seems to be enjoying entrepreneurship, so they will
also enjoy it. However, people forget that people have the tendency to lie and
exaggerate, therefore, until and unless you are not aware of reality, don’t idealize
becoming an entrepreneur just because of its charm.

9. Entrepreneurship Means Get Rich:

Perhaps the biggest o fall reasons why people become entrepreneurs is they think that
it is their train to becoming rich. Although every business comes with the chances of
making money, however, the risk factor in business can never be ignored and the
chances of failure are as great as the chances of success. Therefore, aim for achieving
success in whatever small or big you want to do instead of becoming rich out of doing it.

10. Helping the Society:

People think that by becoming an entrepreneur they will be helping the society. Although
it is a good objective to have, however, it is only valid once you have made the business
a success and that success is evident in the bottom line of the business. Therefore, first
aim for making the business a success and then help society in whatever way possible
Module 2 pdf
Formalities for setting small business