Spirit of Entrepreneurship

By:
Dr. Ayushi Gaur
Assistant Professor
SOM
IMS Unison University, Dehradun
Who is an Entrepreneur............
• An entrepreneur is an individual who creates a new
business, bearing most of the risks and enjoying most of
the rewards. The process of setting up a business is
known as entrepreneurship.

• Entrepreneurs play a key role in any economy, using the

skills and initiative necessary to anticipate needs
and bring new ideas to market. Entrepreneurship that
proves to be successful in taking on the risks of creating
a startup is rewarded with profits and growth
opportunities.
 Working Definition

An entrepreneur is a person who combines various factors of

production, processes raw material, converts the raw material
into a finished product and creates utility and sells the produce in
the market to earn profit.

ENTREPRENEURS ARE MADE AND NOT BORN.

 ENTERPRISE :

An enterprise is an independent and organizationally

separate business entity with the legal rights: it is
involved in the production and sale of goods, execution
of work, and provision of services.
As a rule, enterprises are created taking into account
several important factors:
•A new idea or product that should be of interest to
potential buyers;
•A popular problem that worries many people;
•The company has the opportunity to fill a gap in the
market with its offer;
•The product can be offered below the market price,
which creates competition.
 ENTREPRENEURSHIP
may defined in various ways, but the four key elements involved in it
are:
i. Innovation.
ii. Risk-taking.
iii. Vision.
iv. Organizing skill.

The capacity and willingness to develop, organize and manage

a business venture along with any of its risks in order to make
a profit. The most obvious example of entrepreneurship is the
starting of new businesses.
 Entrepreneurial Characteristics
Being an entrepreneur requires specific characteristics and skills that
are often achieved through education, hard work, and planning.

Risk Taker
Businesses face risk. Entrepreneurs minimize risk through research,
planning, and skill development.

Perceptive
Entrepreneurs view problems as opportunities and challenges.
Curious
Entrepreneurs like to know how things work. They take the time and
initiative to pursue the unknown.
 Entrepreneurial Characteristics
Imaginative
Entrepreneurs are creative. They imagine solutions to
problems that encourage them to create new products
and generate ideas.
Persistent
True entrepreneurs face bureaucracy, make mistakes,
receive criticism, and deal with money, family, or stress
problems. But they still stick to their dreams of seeing
the venture succeed.
Goal-setting
Entrepreneurs are motivated by the excitement of
staring a new business. Once achieved, they seek out
new goals or ventures to try.
 Entrepreneurial Characteristics
Self-confident
Entrepreneurs believe in themselves. Their self-confidence takes care
of any doubts they may have.
Flexible
Entrepreneurs must be flexible in order to adapt to changing trends,
markets, technologies, rules, and economic environments.
Independent
An entrepreneur’s desire for control and the ability to make decisions
often makes it difficult for them to work in a controlled environment.
Hardworking
Entrepreneurs need a great deal of energy to see a venture start and
succeed. Yet they are not deterred by the long hours to achieve
their goal.
 • What is Small Business
Entrepreneurship?
• The reason for this is that most of the enterprises are
small types of businesses. With small business
entrepreneurship, people usually want to earn
enough profit to feed their families and meet their
basic needs.
• This type of entrepreneurship is mostly owned and
operated by an individual unlikely to expand the
business on a large scale. In this, the business owner
usually employs local employees or family members.
• In this, businesses such as local grocery stores, tea
shops, plumbers, electricians, barbers, carpenters,
consultants, and more are considered. Entrepreneurs
typically invest in small business entrepreneurship
using their savings or small loans from banks, or
friends or family.
 • Characteristics of Small Business
Entrepreneurship

• Entrepreneurs focus on a single product,

technology, market or localism while
establishing small business
entrepreneurship.
• Small business entrepreneurship usually
has no expansion plans in the initial
stages of establishment.
• The primary objective of small business
entrepreneurship is to generate profits
from the early days of establishment.
 • What is Scalable Startup
Entrepreneurship?

• Scalable startups are not as popular as

small business entrepreneurship.
Enterprises in scalable startups typically
start on a smaller scale, they often attract
plenty of media and other outside investors
who work to encourage and support those
who build something different and new.
• This means that scalable startups typically
receive funding that they use for growth,
development, and research. They hire the
best employees and work towards the
experimental model.
• With money and continued growth, such
enterprises become large and popular.
• Besides, entrepreneurs work primarily to find
things missing in the market and then
develop something new to fill that missing
gap.
• Scalable startup entrepreneurship typically
seeks rapid expansion over time and earns
huge profits.
• Some of the most popular examples of
scalable startup entrepreneurship are
Facebook and Instagram.
Characteristics of Scalable Startup
Entrepreneurship
• Like small business entrepreneurship, scalable
startups are also initially established as small
scale industries. However, entrepreneurs have
a vision for growth and further expansion from
day one.
• In scalable startups, entrepreneurs generate
revenue rather than just profits and invest in
their enterprises for growth and expansion.
• External investors and venture capitalists fund
the most scalable startup entrepreneurship.
 • What is Large Company
Entrepreneurship?

• Enterprises having a fixed set of life-cycles are

covered under large company
entrepreneurship.
• This means that such enterprises are
responsible for creating new products, services
or technologies from time to time due to
changes in market needs and competitive
atmosphere.
• Many of this type of entrepreneurship arise
from small business entrepreneurship. As far as
a small business grows over time, it can expand
further and turn into large company
• If a large company acquires small
business entrepreneurship, then a small
business is called large company
entrepreneurship.
• These companies usually aim to launch
more products or services revolving
around their core products.
• However, to cope with rapid
technological changes, they also try to
produce innovative products to attract
new customers in the developing market.
• Companies such as Google, Microsoft,
and Adobe come to the category of large
 Characteristics of Large Company
Entrepreneurship

• In large company entrepreneurship,

entrepreneurs primarily focus on planning
innovations and turn them into products to
meet customer needs and attract new
customers.
• Large company entrepreneurs typically
acquire new and small enterprises and
increase their reach to more customers.
• The purpose of entrepreneurs is to maintain
the quality of products and sustain
continuous growth in large company
entrepreneurship.
 • What is Social Entrepreneurship?

• Social entrepreneurship involves entrepreneurship,

where an entrepreneur sets up an enterprise
primarily to produce products and services that can
be profitable to solve social problems.
• In simple words, enterprises providing innovative
solutions to solve community-based issues fall under
social entrepreneurship.
• Social entrepreneurs are more focused on
implementing positive social changes with their
products and services rather than generating more
profit.
• Generally, they start as non-profit businesses or
enterprises and push themselves to work towards
social good.
• Characteristics of Social Entrepreneurship

• Social entrepreneurship is a type of non-profit

venture. The money earned through such
ventures is invested towards the company's
goals and research, rather than the
development of the enterprise or expansion.
• Social entrepreneurship is typically driven by
funding through external investors who support
the mission towards resolving social issues.
• In social entrepreneurship, entrepreneurs
usually raise funds through various alternative
methods, such as sponsorship, grants,
donations earned within their social groups,
etc.
 Entrepreneurial Decision Making Process

• The entrepreneur needs to

follow the steps of the
entrepreneurship decision
process.
1.Identification of problem or
opportunity.
2.Generate alternative solutions.
3.Analyse the alternative solutions.
4.Selection of the best alternative.
5.Implementation of the alternative.
 Some elements of the decision-
making process
Making a decision will require to be considered many
elements. The more elements involved, the more
complex the decision-making process becomes.
• Which alternative is better?
• What factors make the alternatives better or
worse?
• What does the potential impact of the alternatives
mean for me?
• How likely am I to execute the alternative?
• Will the decision result in a net positive or
negative outcome for my company?
• What should I do with all of the information?
• How will the decision affect my team members?
• The entrepreneurial decision process Both are equal to arising
opportunity and Problem if you are firm under various arising
problems then you identify a particular problem and opportunities
as same.
• In the first step, you need to recognize the gap between
where you are now and where you want to be. At this
point, you understand the situation and decide if it’s worth
doing something. Is there a better way to do this?
• A problem is simply a discrepancy, a gap
between the actual state of things and the
desired state of things. It is the difference
between where you are and where you want to
be.
• In this step, you can start with your vision
of the desired state of your company and
the goals you want to achieve.
 2. Collect All Relevant Information and Analyze the Problem

• When you identify the problem, you need to

collect all relevant information and analyze
it as a part of the decision-making process.
Ask yourself, “What is the next step in
solving this problem?
• Analyzing the problem as part of the
decision-making process is about being
smart and using data to solve a problem.
 Define Alternative Solutions
• After defining and analyzing the problem, you
can move on to the next phase, which means
defining alternative solutions.
• Based on the previous analysis’s conclusions,
you can easily define alternative solutions to
solve the detected and analyzed problem.
• You should think about what kind of solutions
will solve your problem. When you are thinking
about solutions, you should also consider what
the consequences would be if you did not have
those solutions. Are there better ways to
achieve your goal? Would you be happy with
your solution? Do you think that the cost is
 • 4. Analyze Alternative Solutions

• Since each solution will bring different outcomes from

the problem-solving process, you will need to analyze
the solutions to determine the best one for
implementation.
• Simply, the question that arises is what you will
achieve by implementing each of the alternative
solutions. In this case, you can use modeling to
model the implementation of each solution
separately. In such a way, you will find the possible
outcomes of all possible alternative solutions and the
costs of their implementation.
• It’s crucial to analyze all the possible solutions to
problems. You should be sure that your ideas and
solutions are reasonable and workable. Use logical
thinking when analyzing a problem.
 • 5. Choose the Best Solution

• The next step is to choose the best solution to your

problem. Choose the one that will solve your
problem best. Don’t be hasty with your decisions.
• When you analyze the alternative solutions, you
can rank them according to specific criteria that
will provide the best conditions and results for the
company. Selecting the alternative solution will
almost always require an optimal solution. An
optimal solution is the one that will give you the
best results with the least effort and costs for the
company. Simply, the results of the previous stage
enable the ranking of the alternative solutions,
with which the best solution, i.e., optimal, will be
chosen.
 • 6. Implement the decision

• A critical aspect of the decision-making process is

the implementation stage. After you have decided
what to do, you need to do it. Don’t procrastinate.
Don’t put off doing the job. Get it done, and then
move on to another task.
• But why do you need a decision if you don’t
implement it? Every decision is made to be
implemented. Implementing the decision will also
mean solving the problem, i. e. , improving your
small business.
• Once you have decided, you must move
forward and execute it. You can’t just talk about
making decisions. You must also act on them
• 7. Review and Feedback
• Understanding that this review is not
a rehash of the original decision is
essential. Instead, it is a summary of
the decision and a chance to reflect
on it. Doing so lets you see if you
made the right decision in the first
place.
• Amazon’s Use of Robotics in Warehouses
• Amazon’s decision to employ robotics in its
warehouses was driven by the desire to
enhance efficiency and minimize costs. The
company employs a variety of robots, including
mobile robots and AI-powered systems, to
manage millions of diverse products and
improve the productivity of its workforce.
• Implementing robotics at Amazon’s
warehouses has led to notable improvements
in efficiency. Productivity and speed have both
increased, enabling Amazon to process and
ship orders more quickly and accurately. This
strategic decision has improved the company’s
operations and given it a competitive edge in
• KFC’s Expansion into Plant-Based Options
• In a comparative manner, KFC identified the rising
demand for vegan and plant-based meals and
accordingly adjusted its menu. They introduced
various plant-based options, such as the KFC Vegan
Burger and Vegan Nuggets, following a decision-
making model that considered the evolving market
trends.
• Although KFC’s addition of plant-based options had
mixed effects on their sales and revenue, the
increasing demand for plant-based alternatives and
the success of plant-based food sales in general
indicate potential for growth in this market. The
company’s decision to offer plant-based options
positioned KFC as an innovative and forward-
thinking brand in the fast-food industry, providing
valuable lessons for other businesses.
 Entrepreneurial Traits

• Entrepreneurial traits are the typical

characteristics, abilities and thought
patterns associated with successful
entrepreneurs. While some
entrepreneurs are born with these
traits, others can develop them.
• Strong leadership qualities
• Highly self-motivated
• Strong sense of basic ethics and
integrity
• Willingness to fail
• Competitive spirit
• Understand the value of a strong
peer network
 Entrepreneurial vs. Managerial Approach
1. Focus
• Entrepreneurial: Innovation and opportunity
identification.
• Managerial: Operational efficiency and process
optimization.
2. Risk Orientation
• Entrepreneurial: High tolerance for risk, seeing it
as an opportunity for significant rewards.
• Managerial: Risk-averse, focusing on minimizing
risks and protecting assets.
3. Decision-Making Style
• Entrepreneurial: Entrepreneurs often make
decisions based on their vision and long-term
goals for the company. They have the freedom
to take calculated risks.
• Managerial: Managers, on the other hand, make
decisions within the framework set by the
business and primarily focused on operational
efficiency and effectiveness.
4. Growth Strategy
• Entrepreneurial: Prioritizes rapid growth and scaling, often
willing to sacrifice short-term profitability for long-term
market dominance.
• Managerial: Seeks incremental growth while maintaining
or improving profitability.
5. Resource Allocation
• Entrepreneurial: Entrepreneurs are
responsible for securing resources (like
funding) needed for the business.
• Managerial: Managers, however, are
tasked with efficiently utilizing these
resources to achieve the company’s
goals.
6. Approach to Change
• Entrepreneurial: Embraces change and
uncertainty as opportunities for innovation.
• Managerial: Prefers stability, with changes made
in a controlled and predictable manner.
7. Goal Orientation
• Entrepreneurial: Vision-driven, with a focus on
disrupting markets or creating new markets.
• Managerial: Performance-driven, with a focus on
achieving specific operational targets and financial
results.
8. Leadership Style
• Entrepreneurial: Inspirational and visionary, often
leading by example and motivating through the
entrepreneurial vision.
• Managerial: Directive and controlling, with an
emphasis on managing teams, processes, and
outcomes effectively.
9. Approach to Failure
• Entrepreneurial: Views failure as a learning
opportunity and a necessary step towards innovation.
• Managerial: Seeks to avoid failure through careful
planning, risk management, and mitigation strategies.
10. Ideal Environment
• Entrepreneurial: Thrives in dynamic, uncertain
environments where agility and innovation are keys
to success.
• Managerial: Operates best in established, stable
environments where predictability and control enable
steady performance.
11. Risk
• Entrepreneurial: It is perhaps within the
work structure of an entrepreneur to
evaluate and take up calculated risks
to grow the business.
• Managerial: Whereas being a manager,
one cannot afford to take the risk
since it's within his job role to
maintain the company's status quo.
 Types of Entrepreneurs
Entrepreneurs are categorized into different
types based on the following classifications:
• Based on the Business Type
• Based on the Technology
• Based on Ownership
• Based on Gender
• Based on the Enterprise size
• Based on Clarence Danhof
 Based on the Business Type
• Trading Entrepreneur
• These types of entrepreneurs usually buy finished
products in bulk from manufacturers at some discount.
They then sell these products directly or with the help of
retailers or vendors with profits. This type of
entrepreneur usually acts as a middleman between
manufacturers and customers. This may include
wholesalers, retailers, dealers, etc.
• Manufacturing Entrepreneur
• The founder of a business to manufacture products is
known as a manufacturing entrepreneur. Manufacturing
entrepreneurs analyze market needs or customer needs
and manufacture products to meet such needs using
various resources or technologies. In simple words,
manufacturing entrepreneurs transform raw materials
into finished products according to the customer's needs.
Agricultural Entrepreneur
• Agricultural entrepreneurs refer to the types
of entrepreneurs who primarily do
agricultural work. They participate in a wide
range of agricultural activities such as
farming, irrigation, agricultural produce,
mechanization, technology, etc.
• They undertake agricultural activities as
raising and marketing of crops, fertilizers and
other inputs of agriculture. They are
motivated to raise agriculture through
mechanization, irrigation and application of
technologies.
 Based on the Technology
Technical Entrepreneur
• Such entrepreneurs are called technology
entrepreneurs who use to start and continue
industries primarily based on science and technology.
These entrepreneurs develop new ideas and turn
those ideas into technology-based innovations and
inventions. They always work to create new methods
of production in the fields of technology and science.
Non-Technical Entrepreneur
• As the name suggests, entrepreneurs who do not set
up and run enterprises based on science and
technology are known as non-technical entrepreneurs.
In short, non-tech entrepreneurs are those who work
for innovations using traditional methods. They
typically use alternative and exemplary marketing
methods and follow non-technical delivery strategies
to engage directly with customers. This ultimately
helps them to survive and grow their business in a
competitive market. Moreover, they create better
relationships and meet customer needs.
 Based on Ownership
• Private Entrepreneur
• When an entrepreneur starts something
personal of his or her own, such as setting up an
enterprise, he/she is called a private
entrepreneur. A private entrepreneur is the only
person who plays the sole proprietor role for a
business venture and bears the risk associated
with it.
• State Entrepreneur
• When a state or government does a business or
industrial undertaking, it is referred to as a 'state
entrepreneur'. In this case, the government is
the sole owner of the enterprise and will bear all
• Joint Entrepreneurs
• When a business or industrial
undertaking is established and
operated jointly by the private
entrepreneur and the government, it
is called joint entrepreneurship. The
parties involved are called joint
entrepreneurs. In this case, risk and
profits are shared by both parties.
However, the sharing percentages
generally depend on the type of
business and the agreement between
 Based on Gender
• Men Entrepreneurs
• When any business venture is formed,
managed and operated by men, these
men are referred to as men entrepreneurs
• Women Entrepreneurs
• When any business venture is formed,
managed and operated by women, these
women are referred to as women
entrepreneurs. Besides, if women have a
minimum 51 percent share of the capital,
they can also be known as women
entrepreneurs.
 Based on the Enterprise size
• Small-Scale Entrepreneur
• If an entrepreneur has invested up to a maximum of 1
crore in starting an enterprise, including plant and
machinery, such entrepreneur is called Small Scale
Entrepreneur.
• Medium-Scale Entrepreneur
• If an entrepreneur has invested a minimum of 1 crore to
a maximum of 5 crores in starting an enterprise,
including plant and machinery, then such entrepreneur
is called Medium Scale Entrepreneur.
• Large-Scale Entrepreneur
• If an entrepreneur has invested more than 5 crores in
starting an enterprise, including plant and machinery,
such an entrepreneur is called a large-scale
entrepreneur. This includes any investment above 5
crores.
 Types of Entrepreneurs

Classification by Clarence H. Danhof

1. Innovative Entrepreneur
• An innovative entrepreneur is visionary and
seeks new opportunities to create and develop
groundbreaking ideas, products, or services.
They are known for their ability to think
creatively, take calculated risks, and disrupt
traditional business models.
• Examples of innovative entrepreneurs include
Elon Musk, the CEO of Tesla and SpaceX, who
revolutionized the electric vehicle and space
exploration industries, and Mark Zuckerberg, the
co-founder of Facebook, who transformed how
people connect and communicate globally.
2. Imitative Entrepreneur
• An imitative entrepreneur is an individual
who focuses on replicating existing
business ideas, products, or services with
minor modifications or adaptations. They
are skilled at identifying and duplicating
successful business models in different
markets or contexts.
• While imitative entrepreneurs may lack
novelty, they can still succeed by
capitalizing on proven concepts.
Example: Franchise owners who replicate
established brand concepts and operate
multiple outlets.
3. Fabian Entrepreneur
• A Fabian entrepreneur adopts a cautious and
incremental approach to entrepreneurship.
They tend to proceed gradually, making
calculated decisions and mitigating risks as
they progress. Fabian entrepreneurs prioritize
stability and long-term sustainability over
rapid growth. They carefully analyze market
conditions, customer demands, and resource
availability before making strategic moves.
• Example: A small business owner who
gradually expands their operations, carefully
considering market trends and customer
feedback.
4.Drone Entrepreneurs
• The another type of entrepreneur is
Drone. These individuals resist
embracing new opportunities and
fail to capitalize on them. They
adhere to conventional methods
and are unwilling to adapt their
production processes, even if it
results in losses. Their resistance to
change earns them the label of
“laggards.”
 Other Categories of Entrepreneur

• First-Generation Entrepreneur
• A first-generation entrepreneur is an individual who starts
a business or venture from scratch without any family
background in entrepreneurship. They often face unique
challenges as they build everything from the ground up.
These entrepreneurs rely on their ideas, skills, and
resources to establish successful enterprises.
• Example: First-generation entrepreneur is Jeff Bezos, the
founder of Amazon, who started the company as an
online bookstore and grew it into one of the world’s
largest e-commerce and technology corporations
• Second-Generation Entrepreneur
• A second-generation entrepreneur takes over an existing family business or
venture that their parents or another family member originally established. They
inherit an established foundation and have the advantage of learning from the
experiences and knowledge of the previous generation. Second-generation
entrepreneurs often face the challenge of balancing the preservation of the family
legacy with the need for innovation and growth.
• Example: Second-generation entrepreneur is Ratan Tata, who succeeded his father
as the chairman of Tata Group, one of India’s largest conglomerates, and led its
expansion into various industries.

• Third-generation Entrepreneur
• A third-generation entrepreneur represents the next wave of family business
leadership, taking over from their parents and grandparents. They inherit a well-
established business and often have access to a wealth of resources and networks
built over multiple generations. However, they also face the challenge of
maintaining relevance, adapting to changing market dynamics and introducing
innovations to drive growth.
• Example: Third-generation entrepreneur is Marta Ortega, the daughter of
Amancio Ortega, the founder of Inditex Group (owner of Zara). Marta actively
manages the company’s operations and promotes sustainability initiatives.
 Women Entrepreneurship

• Women entrepreneurs may be defined as a

woman or a group of women who initiate,
organise and run a business concern.
• Schumpeter – “Women entrepreneurs are
those women who innovate, initiate or adopt
a business activity”.
• Government of India – “A woman
entrepreneur is defined as an enterprise
owned and controlled by a woman having a
minimum financial interest of 51 percent of
the capital and giving at least 51 percent of
the employment generated in the enterprise
to women.”
 Women Entrepreneurship –
Common Features

• . Most women with small income are likely to

become entrepreneurs
• 2. Women with small facilities are likely to
become entrepreneurs
• 3. A majority of women entrepreneurs are
married. With the support of their husband
they accepted entrepreneurship.
• 4. Most spinsters face difficulties in obtaining
financial support to start their enterprises.
• 5. A large number of women with little or no
education and training enter into the business
field.
• 6. Many women become entrepreneurs
out of economic necessity.
• 7. Women’s sincerity and hard work is
the cause for sustainability and growth.
• 8. Women entrepreneurs are security
oriented rather than growth oriented
• Most women prefer stabilization of
income and minimization of risk
• 10. Business enterprises of women lack
working capital, this causes low profit
margin
 Why women become entrepreneurs?

• 1. To become economically
independent
• 2. To establish their own enterprise
• 3. To establish their identity in the
society
• 4. To achieve Excellency in their
endeavour
• 5. To build confidence to themselves
• 6. To develop risk assuming ability
• 7. To claim equal status in the society
 Women Entrepreneurship – Need
and Factors
• These factors suggesting their need
can be broadly classified into two
groups:
• I) Motivational factors or needs and
• II) Facilitating factors or needs.
 Factor # (I) Motivational Needs:

• 1) Economic Necessity:
• 2) Desire for High Achievement:
• 3) Independence:
• 4) Government Encouragement:
• 5) Education:
• 6) Model Role:
• 7) Family Occupation:
• 8) Employment Generation:
• 9) Self Identity and Social Status:
• 10) Growing Awareness:
 Factor # (II) Facilitating Needs:

• 1) Adequate Financial Facilities:

• 2) Innovative Thinking:
• 3) Support and Cooperation of the
Family:
• 4) Availability of Experienced and
Skilled Women:
• 5) Development Programmes:
 Challenges Faced by Indian Women Entrepreneurs

• a) Lack of confidence: In general, women lack

confidence in their strength and competence. The family
members and the society are reluctant to stand beside
their entrepreneurial growth. To a certain extent, this
situation is changing among Indian women and yet to
face a tremendous change to increase the rate of
growth in entrepreneurship.
• b) Socio-cultural barriers: Women’s family and personal
obligations are sometimes a great barrier for succeeding
in business career. Only few women are able to manage
both home and business efficiently, devoting enough
time to perform all their responsibilities in priority.
• c) Market-oriented risks: Stiff competition in the market
and lack of mobility of women make the dependence of women
entrepreneurs on middleman indispensable. Many business
women find it difficult to capture the market and make their
products popular. They are not fully aware of the changing
market conditions and hence can effectively utilize the services
of media and internet.

• d) Motivational factors: Self-motivation can be realized

through a mind set for a successful business, attitude to take up
risk and behaviour towards the business society by shouldering
the social responsibilities. Other factors are family support,
Government policies, financial assistance from public and private
institutions and also the environment suitable for women to
establish business units.
• e) Knowledge in Business Administration: Women must be
educated and trained constantly to acquire the skills and
knowledge in all the functional areas of business
management. This can facilitate women to excel in decision
making process and develop a good business network.

• f) Awareness about the financial assistance: Various

institutions in the financial sector extend their maximum
support in the form of incentives, loans, schemes etc. Even
then every woman entrepreneur may not be aware of all
the assistance provided by the institutions. So the sincere
efforts taken towards women entrepreneurs may not reach
the entrepreneurs in rural and backward areas.
• g) Exposed to the training programs: Training programs and
workshops for every type of entrepreneur is available
through the social and welfare associations, based on
duration, skill and the purpose of the training program.
Such programs are really useful to new, rural and young
entrepreneurs who want to set up a small and medium
scale unit on their own.

• h) Identifying the available resources: Women are hesitant to

find out the access to cater their needs in the financial and marketing
areas. In spite of the mushrooming growth of associations,
institutions, and the schemes from the government side, women are
not enterprising and dynamic to optimize the resources in the form
of reserves, assets mankind or business volunteers.
 Factors Affect
Entrepreneurship
• Factors that affect entrepreneurship growth
are divided into various groups so that
strategies according to each group of factors
can be devised. These factors are classified
into following categories/ groups:
• 1. Economic Factors
• 2. Social Factors
• 3. Psychological Factors
• 4. Government/Political Factors
• 5. Other factors
 Economic Factors

• Economic factors are those which contribute in the

economic development of the economy.
From economic point of view, these factors
create conducive environment for the economic
development of country and also account for the
establishment and development of entrepreneurship.
These factors actually provide the economic security
and favourable environment to an enterprise.

• Capital: Availability of capital helps an entrepreneur to

arrange the basic means of business i.e. land, machinery,
material, manpower, etc.. Without adequate capital no one can
combine all the means of production. Supply of adequate capital
also assists in generating or increasing capital and profits. Supply
of adequate capital is regarded
• as lubricant to drive the engine of entrepreneurship growth.
• Labour: Availability of quality labour in right quantity
always considers one of the major factors of economic
as well as entrepreneurship development.. Availability
of low-cost labour is a boost for entrepreneurs as it
directly linked with smooth functioning andprofitsofan
enterprise.
• Raw Material: To establish an enterprise in any
region, availability of raw material
is major determinant. In the absence of raw material,
neither entrepreneurship developed not entrepreneur
emerged.
• Market: It is the market that provides the potential
reward to the entrepreneurs. Market consists of
producers and buyers or a place where seller sells
his/her produces to customers. Entrepreneurs can
generate capital, arrange labour, procure raw materials
but he cannot create market, he can only generate
 Social Factors
• Entrepreneurship Legitimacy:For
entrepreneurship establishment and
growth, system of norms and values within a
social setting are major social determinants.
The system of social norms and values is
known as legitimacy of entrepreneurship.
Approval and rejection of society in terms of
norms and value influences the
entrepreneur’s behaviour.
• Social Mobility: Social mobility includes
both social as well as geographical mobility.
Openness and flexibility in the social and
cultural system affect the
• Social Marginality Social marginality
means a group of society supports a particular
role for an individual due to differences from
main social groups. An economy sees growth of
entrepreneurship where a particular social
system expects from an individual to assume
entrepreneurial roles. This marginality may be
due to religious, cultural, and migration issues,
etc.
• Security:Many scholars advocate that
entrepreneurs’ security is an important
facilitator of entrepreneurship growth. It is not
decisive that what is the appropriate level or
amount of security which results in
entrepreneurial emergence.
 Psychological Factors
• Motivation for high
achievement:According to D. McClelland’s theory
of need achievement, primarily, motivation for
high achievement is the major psychological
determinant for entrepreneurship development.
This theory advocates that entrepreneurship
emerged in a society that reflects need for
achievement. Society that has high need
achievement would expect high growth in
entrepreneurship.

• McClelland further states that due to need for high

achievement one succeeds and other fails in
entrepreneurship due to low motivation.
• Status Respect: Status respect is
another psychological factor that affects
entrepreneurship growth.
• Academicians stated that withdrawal of
expected status respect forces group of
society or individuals to opt for something
different or unique to get the status respect
and most of the times to express,
dissatisfied individuals opts for
entrepreneurship.
 Government/Political Approach
Regulatory Compliance and Legal Requirements
• Business Creation and Dissolution: Simple and standardized
regulations for creating and dissolving companies are more
conducive to new ventures. Bureaucratic rules, rigorous
information, or company dissolving processes can be a barrier.
• Licenses and Permits: Easier administrative methods to
receive the necessary documentation to open and run an
experience or industry are central to stimulating entrepreneurial
business.
Taxation and Guidance Strategies
• Tax Law: Decisive and established business income, payroll,
benefits, and capital improvements or deterioration are able to
either support or discourage enterprise, influencing the
approachability of economic revenues and abstract revenue to
assist and fund the experience, too.
• Support for Startups: Cuts in taxes can fuel proponent
security and stipend the endeavor into its endowments and
quintessence.
Funding and Financial Assistance
• Access to Credit: Curb over interest
credit and additional element
properties are less complex to come
by, enabling a pathway to sources for
late institutions.
• Grants and Sponsored Programs:
Legitimate data is relevant to all, not
just the learned or affiliated, to stand
out from the start.
 Other Factors
Technological Advancements
• Technological progress can significantly
impact entrepreneurship by creating new
opportunities for innovation, reducing
barriers to entry, and enabling
entrepreneurs to reach wider markets with
lower investment costs. The rise of the
internet, mobile technology, and cloud
computing, for example, has spawned
numerous entrepreneurial ventures.
 Market Demand and Consumer Trends
• Consumer preferences and market demand play a
critical role in shaping entrepreneurial
opportunities. Entrepreneurs often succeed by
identifying and responding to emerging trends or
unsatisfied needs in the market. Changes in
consumer behavior, such as the increasing
emphasis on sustainability, can drive the
development of new products and services.
Cultural Factors
• Cultural attitudes towards entrepreneurship, risk-
taking, failure, and success can greatly influence an
individual's propensity to engage in entrepreneurial
activities. Societies that celebrate entrepreneurial
success and view failure as a learning opportunity
tend to foster more entrepreneurial activity.
Infrastructure
• The availability and quality of physical and digital
infrastructure, including transportation,
telecommunications, and internet access, can significantly
impact entrepreneurship. Good infrastructure facilitates
business operations, reduces costs, and improves access
to markets and resources.
Demographic Factors
• Demographic changes, such as population growth, aging,
urbanization, and migration, can influence entrepreneurial
opportunities and challenges. For example, an aging
population may create new market opportunities in
healthcare and eldercare services.
Environmental and Geographic Factors
• The natural environment and geographic location of a
business can influence its opportunities and challenges.
For instance, proximity to natural resources, climate
conditions, and access to regional or global markets can
affect the feasibility and focus of entrepreneurial ventures.
Networks and Social Capital
• The extent and quality of an entrepreneur's networks can
significantly affect their ability to access resources,
information, and support. Strong social capital can
facilitate the acquisition of funding, partnerships, and
valuable advice.
Industry Dynamics
• The structure and dynamics of the industry in which an
entrepreneur operates can influence the likelihood of
success. Factors such as the level of competition, barriers
to entry, and the pace of technological change within the
industry can impact entrepreneurial ventures.
International and Global Factors
• In an increasingly globalized world, international trade
policies, global market trends, and cross-border
collaborations can influence entrepreneurial opportunities
and challenges. Entrepreneurs must navigate complex
international landscapes, including differing regulations
and cultural nuances.
 Theories of motivation in entrepreneurship

#1 Joseph Schumpeter's innovation theory -

• Schumpeter believed that entrepreneurship could
change market dynamics by destroying existing
markets, and that it could create new markets by
improving existing products or creating new ones.
• He supported innovation as a key factor in
economic development.
• Innovation is the market introduction of a
technical or organizational novelty, not just its
invention." (Joseph Schumpeter)
• Therefore, an entrepreneur should be motivated to
create new or better products to gain an
advantage in the market.
• He makes a distinction between an
innovator and an inventor.
• According to him, an inventor discovers
new methods and new materials. But,
an innovator is one who applies
inventions and discoveries in order to
make now combinations. With the help
of these new combinations, he produces
newer and better goods which yield
satisfaction as well as profits.
• In practice, new combination theory covers
five cases which are given below:
• (i) The introduction of a new good which
consumers, are not yet familiar—or of a new
quality of a good.
• (ii) The introduction of a new method of
production, that one not yet tested by experience
in the branch of manufacture concerned, which
need by no means be founded upon a discovery
scientifically new and can also exist in a new way
of handling a commodity commercially.
• (iii) The opening of a new market i.e. a market
into which the particular branch of manufacture
of the country in question has not previously
entered, whether or not this market has existed
• (iv) The conquest of a new source of
supply of raw materials or half
manufactured goods, irrespective of
whether this source already exists or
whether it has first to be created.
• (v) The carrying out of the new
organisation of any industry like the
creation of a monopoly position (for
example, through trustification) or the
breaking up of a monopoly position.
• Theory # 2. Need for Achievement
Theory:

• Professor David McClelland, in his book The Achieving Society,

has propounded a theory based on his research that
entrepreneurship ultimately depends on motivation.

• It is the need for achievement (N-Ach), the sense of doing and

getting things done, that promote entrepreneurship.

• According to him, N-Ach is a relatively stable personality

characteristic rooted in experiences in middle childhood
through family socialisation and child-learning practices which
stress standards of excellence, material warmth, self-reliance
training and low father dominance.
According to him a person acquires three types of
needs as a result of one’s life experience.
These three needs are:
 Need for Achievement. A drive to excel, advance and
grow.
 Need for Power. A drive to dominate or influence others
and situations.
 Need for Affiliation. A drive for friendly and close inter-
personal relationships
• McClelland found that certain societies tended to
produce a large percentage of people with high
achievement.
• He pointed out that individuals, indeed whole
societies that possess N-ach will have higher levels
of economic well-being than those that do not.
• McClelland’s work indicated that there are five
major components to the N-ach trait
• : (a) responsibility for problem solving,
• (b) setting goals,
• (c) reaching goals through one’s own effort
• , (d) the need for and use of feedback, and
• (e) a preference for moderate levels of risk-taking.
 Theory # 3. Theory of Social Change:

• Max Weber believes that religion has a large

impact on the entrepreneurial development of
the country because some religion has basic
faith to earn more money whereas some has
less.
• He calls them „spirit of capitalism‟ which can
be enhanced in the country if there will be
favourable attitude towards capitalism in the
country.
• It is the religious beliefs that develop the
sense of capitalism in the individual which
generates the feeling of occupational chase
and the addition of assets.
 Theory # 4. Leibenstein’s X-Efficiency
.

Theory:

• The thought of x-efficiency was introduced by Harvey

Leibenstein in his paper Allocative efficiency v. “x-
efficiency” in American Economic Review 1966
• Basically, X-efficiency is the degree of inefficiency in the use of
resources within the firm: it measures the extent to which the firm
fails to realize its productive potential.
• According to Leibenstein, When an input is not used effectively
the difference between the actual output and the maximum
output attributable to that input is a measure of the degree of X-
efficiency.
• X-efficiency arises either because the firm’s resources are used in
the wrong way or because they are wasted, that is, not ­used at all.
• Leibenstein identifies two main roles for the entrepreneur: (i) a gap­
filler and (ii) an input completer.
• The theory concludes that an entrepreneur has to act as
gap filler and an input completer if there are
imperfections in markets. For using there unusual skills,
he gets profits as well as a variety of non-peculiar
advantages.
• Theory #5: Frank H. Knight’s theory of
profit -
• Knight proposed a theory of profit, which states
that if entrepreneurs are to bear the risk by taking
decisions among uncertainty, they deserve the
rewards/profits made in return.
• This theory is developed by Knight, Frank H. He
points out that entrepreneurs are specialized
group of persons who bears risk and deals with
uncertainty. Main features of this theory are pure
profit, situation of uncertainty, risk bearing
capability, guarantee of specified sum,
identification of socio economic and
psychological factors, use of consolidation
techniques to reduce business risks.
 THEORY 6: Hagen’s theory of
entrepreneurship

• Hagen's has propounded a theory of withdrawal of

status respect. According to him, withdrawal of status
respect leads to the entrepreneurship.
• It occurs when the member in the group perceive that
their efforts and purposes in the life are not valued by
the other members.
• He proposed four events which can lead to status
withdrawal:
• Displacement of a conventional best group from its earlier status
by another conventional supply physical force.
• Defamation of valued symbols through some change in the
attitude of the superior group
• Inconsistency of status symbols with a changing‟ distribution of
economic power.
• He further stated that withdrawal of the status
respect would give rise to following:

• (a) Innovator: An entrepreneur who is

innovative and try to attain his objectives set by
himself
• (b) Retreatist: Entrepreneur who keeps on
working in society but remains apathetic to his
work or status.
• (c) Ritualist: One who works as per the rules
of the society but has no hope in the
improvement in his status.
• (d) Reformist: One who is a revolting and tries
to carry new ways of working and develops new
society.
 Theory 7. Thomas Cochran’s Theory of
Cultural Values

• According to Cochran’s, ‘cultural values, role

expectation and social acceptance plays
prominent role in entrepreneurship
development and entre­preneur is a model of
personality.”
• The success of an entrepreneur is basically
affected from the following factors:
• i. The social attitude of the person towards his
occupation.
• ii. The role expectations of the sanctioning
group.
• iii. The operational requirements of the job.