(208) UNIT I

Being An Entrepreneur
 R ENE UR
ENTERP

Entrepreneurs are business people who can detect and sense the availability of
business opportunities in any given scenario. They will utilize these opportunities
to create new products by employing new production methods in different
markets.
“people who own, operate, and take the risk of a business venture”
Entrepren •
Person
eur
Entrepren
•Process
eurship

Enterprise • Outcome
Profile analysis
• SELLING
• DISRUPTOR
• KNOWLEDGE
• DETERMINATION
• DELEGATOR
• PROFITABILITY
• RELATIONSHIP
• RISK
• CONFIDENCE
• INDEPENDENCE
 Entrepreneurial Behavior
Entrepreneurial behavior includes the goal oriented acts or decision
of an entrepreneur. It means the manner or way in which the
entrepreneur deals with its total environment: internal and external.

Entrepreneurial behavior represents the behavioral approach of

management.

• It emerged as a distinct field of study because of the importance of

human behavior in enterprise.
• Cause and effect relationship: Human behavior is generally taken
in terms of cause and effect relationship. It provides generalization
that entrepreneurs can use to anticipate the effect of certain
activities on human behavior.
• A branch of social sciences: Entrepreneurial behavior is greatly
influenced by other social sciences viz., psychology, sociology and
anthropology.
• Three levels of analysis: Entrepreneurial behavior is the study of
three levels of analysis i.e. individual behavior, inter-individual
behavior and the behavior of organizations.
• A science as well as an art: The systematic knowledge about human
behavior is a science and the application of behavioral knowledge and
skills is an art.

Sub
Personal
Attitudes
Entr Entr
jec epre epre
neuri neur
tive al ial
Nor
Perceived Inten Beh
ms
Behavioral
Control tions avior
 Entrepreneurial Motivation

Motivation has been derived from the word

‘motive’ which implies the inner state of mind
that activates, provokes and directs our
behavior towards the goal .

Motivation is a process that motivates a

person into action and induces him to follow
the course of action till the goals are finally
achieved.

In the work goal context the psychological

factors stimulating the people’s behavior can
be - “Motivation is th
e desire
desire for money to act in service
of a goal.
success It's the crucial ele
ment in
recognition setting and attain
ing our
job-satisfaction objectives.”
team work, etc.
 Entrepreneurs Ecosystem

•Education system
•Market structure
•Infrastructure
•R&D system
•Financial sector
•Corporate sector
•Government
 Entrepreneurs
and
Strategic Decisions
 Decision making in strategic activity

Setting specific course of action to reach strategic goals.

Revenue and profit goals

Market share and competitive advantage

Product superiority and technical advantage

Strategic decision involves critical analysis ,resource

investment ,company commitment
Sustainability of Entrepreneurship
 Dilemmas of an entrepreneur for success
Thanks to portrayals in both film and fiction, the public thinks of entrepreneurs as bold
and dashing men and women who combine a visionary view of the world with boundless
energy and a keen sense of unfulfilled marketplace needs.

Motivation paralysis: which is a fancy way of saying you’re

not sure what to do next. Entrepreneurs always want to be Motivation paralysis
moving forward, but that can be difficult if you don’t know
what to do next. which is a fancy way of saying you’re not Being ground up
sure what to do next. Entrepreneurs always want to be
moving forward, Lack of cash
but that can be difficult if you don’t know what
to do next. C-level tension
Why mess with a good
Being ground up: This means you don’t have thing?
time to think about your next move
because you’re so busy in the daily grind:
You’re working in your business instead of 
on your business.
•Lack of cash: In almost every scenario, it requires cash to grow a business. And this is
where a significant chunk of all entrepreneurs get bogged down. While the perception is
that entrepreneurs are riverboat gamblers who don’t mind taking on debt for a chance to
pay back that debt (and earn much more), the reality is that plenty of entrepreneurs
don’t have the stomach (or think they don’t have the stomach) to assume more debt. 

• C-level tension: Just because the partners are all family members, close friends or
trusted business professionals, it doesn't mean you won’t clash when it comes to the
future direction of your business, or even day-to-day operations. Perhaps you are the
partner most interested in rapid growth and the others are more conservative - or vice
versa. 

• Why mess with a good thing?: Things are going well and, rather than stress out about
making the business even better, why not enjoy things as they are? There’s something to
be said for the “don’t worry, be happy” philosophy - and there are brief times when it
makes sense to leave things be. But most of the time you need to be thinking a couple
steps ahead.
 Barriers of growth

Start up new •Commitment

Venture

Leadership •Creativity

Autonomy •Direction

Control •Delegation

Excessive System •Collaboration

 Management styles
A management style is a way in which a manager works to fulfill their goals. Management
style includes the way that a manager plans, organizes, makes decisions, delegates, and
manages their staff.
Authoritative: An authoritative manager follows a top-down
approach to leading. In this style, managers make decisions almost
entirely alone.
Ex : In Restaurants

Consultative: Consultative managers ask employees for feedback

consistently and take employee concerns seriously. They often have
an open-door policy that encourages employees to share what is
and isn’t working in the organization. While managers will consult
with employees, they ultimately retain sole decision-making power.
Ex: A team leader of a project holds weekly one-on-one meetings
with each of the other team members.

Democratic or participative: A democratic or participative

manager’s decision-making process is heavily influenced by their
employees. This style includes effective communication and
openness through all levels of the organization, and employees and
managers work together to reach the goals of their vision. 
Ex: Store managers often use the democratic management style.
They’ll hire team members who can work together to complete
store layouts, marketing campaigns and customer service. These
managers act as a moderator to help their team move forward with
their ideas and are available to answer questions.

Laissez-faire or delegative: In the laissez-faire management style,

managers are more like mentors than leaders. They’re available
when employees need guidance, but they often let employees
make decisions on their own about how to move forward with
projects.
Ex: Given the unpredictable nature of the fashion industry, allowing
fashion buyers the freedom to choose their own products often
works best. As long as they are knowledgeable and passionate,
individual buyers are typically much more in tune with fashion
trends than management.

Persuasive: Persuasive managers hold control of decision making

but they work to help employees understand why the decisions
made by management are best for the company. They share an
honest rationale behind decision-making policies that can foster an
inclusive and trusting environment.
Ex: independent consultant, comes in to analyze the operations of
the company. 
Transformational: A transformational management style focuses on creating an environment
that supports innovation. Leaders with this style often push their employees to set and reach
stretch goals even if it makes them slightly uncomfortable.
Ex: You can often find transformational managers in the technology industry. These managers
are constantly adapting to the market, and they challenge and inspire their employees to create
extraordinary products.

Collaborative: Collaborative leaders work closely with their team members and believe that
when people feel personally and professionally fulfilled, they’re more effective and more likely
to produce great work regularly. Because of their emphasis on employee satisfaction and
teamwork, they tend to achieve higher levels of respect.
Ex: A product manager hosts monthly one-on-one coffee meetings with everyone that has
concerns, questions or thoughts about improving or using the product. This time is meant for
her to address the needs of and help those who are using the product in any capacity
 Handling doubts on survival of business

•Doubt is the biggest dream killer than failure

•A Proper Business Plan
•Business Funding
•Walk before you Run
•Use Technology
•Try to Start with a Virtual
•Push yourself out of your comfort zone
•Quit beating yourself up
•Blame the tactics, not the talent
•Get expert TACTICAL guidance
•Build your inner circle
•Get busy, and stay busy
•Get some momentum
 Struggles-Causes of failure–Product/ market

•Poor product quality

•Higher price
•Poor timing
•Inherent defect
•Extent of competition
•Lack of promotional measures
•Faulty distribution policy
•Unavailability of spare parts
•Poor after-sale service
•Imitation products
•Trying to fix a non-existent
problem
•Targeting the wrong market
•Incorrect pricing
•Build, and they will come
 Financing
•Lack of Personal Capital
Every entrepreneur needs to begin with a certain amount of seed capital to pay for the cost
of hiring staff, renting premises, buying or leasing equipment, marketing.

• Fewer Networking Contacts

When you're searching for funding options you also lack those well-placed connections who
could suggest your nascent business to a venture capitalist they know, or who would serve as
a valuable reference in your hunt for funding.
• Poor Credit History
In general, the older you are, the better your
credit history is. Older entrepreneurs have
generally had time to build a solid and high credit
rating. Their youthful mistakes disappeared off of
their credit reports long ago.
•Age Discrimination
It is an advantage when you need to convince investors that
you're a reasonable financial risk. Young entrepreneurs can
find that some bank managers and investors are very reluctant
to trust them with a loan or venture funding simply because
they think that they are too young .
• Fearing Debt
No one likes the feeling of owing money, but as you get older you realize that some debt
can be positive, depending on the loan and its purpose. A short-term business loan that's
taken out with careful planning of repayment schedules and with the right APR(Annual
percentage rate) rates can be an excellent way to deal with startup capital or early cash
flow issues. Many people who start a business in their 20s and 30s are still paying off
student loan debt and have a mortgage and/or auto loan to pay off, as well. Adding a
business loan to that might just be too daunting.

• No Safety Net
Older entrepreneurs also often already have some kind of retirement fund and pension that
they can fall back on if their business fails. Young entrepreneurs can be struggling to raise
money for their startup at the same time as wanting to settle down in a relationship and
perhaps start a family. The lack of a financial safety-net can be very worrying to young
entrepreneurs.
 Managerial-Resilience
•See setbacks as an opportunity to learn.: A manager can never be the source of all
wisdom. You will make bad decisions and there will be things that you do not know. When
mistakes are made, rather than beat yourself up about it, review the incident with an
honest and open mind. Identify the things you need to change and put a plan in place to
change them.

•Practice feedback consistently: Interpersonal relationships can cause a lot of stress in the
workplace. Stressful situations often arise due to a lack of communication. Employees
require guidance and support if they are to thrive.

•Praise employees for good performance and offer constructive feedback when their
performance falls below expectations: This will take just a few minutes of your day but it
lets employees know where they stand and prevents minor incidents from developing into
stressful situations.

•Guard your time. Employees need to know how and when they can reach you, but they
do not need to be able to reach you 24/7. Set barriers around your time: When
completing important tasks, make it clear that you are not to be disturbed. This will allow
you to complete the task in the most effective manner.
•Exercise regularly. A healthy body and mind are essential for coping with the pressures of
managerial life. Strength and fitness increase your resilience. Build some exercise into your
daily routine and you will soon feel the benefits. A word of caution: start slowly and gradually
increase the difficulty. The purpose is to avoid stress rather than create it.

•Ensure that you get sufficient rest. You are designed to cope with periods of high pressure.
However, when the pressure becomes too much for you to cope with, stress begins to creep
in. To prevent this from happening it is essential that periods of high pressure are balanced
with periods of rest and recovery. Ensure that your sleep is of sufficient quantity and quality.
In addition, you may also:
•Take a brief nap (20-30 minutes) in the middle of your day
•Include some breathing exercises e.g. yoga
•Meditate
•Use relaxation imagery.

•Include sufficient breaks in your schedule. These steps may seem counterintuitive, but rest
allows the body and mind to recover from high pressure activities, and build up strength and
resolve for the challenges to come. When you know that you have sufficient rest in your
schedule, you can give 100 percent during periods of work, allowing you to perform to a
higher standard, more of the time. Rest improves productivity.
•Build your support team. Nobody succeeds alone. Success requires a good support
team. You need people you can confide in, people who can advise you, people who will
challenge you and hold you accountable, and people who will support you through good
times and bad. Surrounding yourself with the wrong people will hold you back and cause
you stress.

•Surrounding yourself with the right people will propel you forward, further than you
ever thought possible. Your support team is too important to be left to chance. Be
selective about the people you include, treat it as though you are recruiting for a key
position because—in reality—you are.

•Enjoy some personal time. Emotional balance is vital to maintain good health. The
pressures of a busy work life can easily drain your emotions. To restore emotional
balance, include some personal time in your schedule. Incorporate activities that bring
you joy and pleasure into your schedule. If you have a hobby you enjoy, make time for it.
Anything which makes you laugh uncontrollably is also good. Enjoying quality personal
time will work wonders for your health and happiness.

•Maintain perspective by projecting forward.  w ith th e o xy g e n m ask on a

Just like
•Managerial life involves a lot of pressure n e, yo u m u st ca re for yourself
pla
yo u are in a p o sition to care
before
for others.
 Legal Fundamentals
Formalizing a business
Applying for
structure and founders
agreement business licenses

Adhering to Understanding
taxation and
labour laws accounting laws

Details about Ensuring effective

winding down contract
the business management

Ensuring protection
of intellectual
property
 “Successful startups are ones that are driven by passionate entrepreneurs who are focused
on building unique solutions that deliver customer delight. ”

1. Formalizing a business structure and founders agreement

The first thing to starting any business is to be clear about the nature and type of the
business. Founders will need to incorporate the business as a specific business type – sole
proprietorship, private limited, public limited, partnership, limited liability partnership etc. It
is very essential to have this clarity at the very beginning as this will be integral to the
business’ overall vision and goals, both short term and long term.

2. Applying for business licenses

Licenses are integral to running any business. Depending on the nature and size of business,
several licenses are applicable in India. Knowing the applicable licenses for your startup and
obtaining them is always the best way to start at business. Business licenses are the legal
documents that allow a business to operate while business registration is the official process
of listing a business (along with relevant information) with the official registrar.

3. Understanding taxation and accounting laws

Taxes are part and parcel of every business. There are a broad variety of taxes, such as,
central tax, state tax and even local taxes that may be applicable for certain businesses.
Different business and operating sectors attract different taxes and knowing this beforehand
can prove to be useful.
Recently, the Government of India launched the ‘Startup India’ initiative to promote
startups, and introduced many exemptions and tax holidays for startups and new
businesses. According to this initiative, a startup can avail income tax exemption for a
period of 3 years as well as tax exemptions from capital gains and investments above Fair
Market Value. The conditions that startups need to qualify in order to leverage these
exemptions are:
•The startup should not be more than 7 years old (or 10 years for biotech) from the date of
incorporation.
•Is incorporated as a Registered Partnership, Limited Liability Company or Private Limited
Company.
•Turn over in any year should not have exceeded 25 cores.
•The startup should not have been formed by splitting or reconstructing an existing
business.

4. Adhering to labour laws

Adhering to labour laws are integral to every organization, small or big. When you are
established as a company and have hired people to work for your organization, you are
subject to several labour laws regardless of the size of the organization.

Laws with regards to minimum wages, gratuity, PF payment, weekly holidays, maternity
benefits, sexual harassment, payment of bonus among others will need to be complied
with. It is best to consult a legal counsel to assess the laws applicable to your startup and
ensure that your startup is compliant to the required labour laws.
The Nine labour laws applicable under this scheme are:

•The Industrial Disputes Act, 1947

•The Trade Unit Act, 1926
•Building and Other Constructions Workers’ (Regulation of Employment and Conditions of
Service) Act, 1996
•The Industrial Employment (Standing Orders) Act, 1946
•The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979
•The Payment of Gratuity Act, 1972
•The Contract Labour (Regulation and Abolition) Act, 1970
•The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
•The Employees’ State Insurance Act, 1948.

5. Ensuring protection of intellectual property

Intellectual property is the secret sauce for most businesses today, especially for tech
centric businesses. Codes, algorithms and research findings among others are some of the
most common intellectual property owned by organizations. Startups can leverage the
‘Scheme for Startups Intellectual Property Protection’(SIPP) under the Startup India
initiative.
6. Ensuring effective contract management
Contracts lie at the crux of running any business. A contract is required to ensure the
smooth functioning of work and is a great mechanism to ensure recourse in case of non-
fulfillment of work. Having basic knowledge about various aspects of contract
management can prove to be useful for entrepreneurs.
As per the Indian Contract Act, 1872, all agreements are contracts if they are made by the
free consent of parties competent to contract, for a lawful consideration with a lawful
object, and are not expressly declared to be void.

7. Details about winding down the business

Closing a company is a difficult call to make for any entrepreneur. When a startup decides
to shut down, all the stakeholders from vendors to employees to customers and investors
need to informed in advance and the whole process must be properly planned and
executed in order to make the exit easy on everyone.
From the legal standpoint, there are basically three ways to shut down a startup:

•Fast Track Exit Mode

•Court or Tribunal Route
•Voluntary Closure
Lets have a Revision
with a Video…
https://youtu.be/wbgPq1mmXec