Unit- I Entrepreneurship Development

7/30/2019 Unit- I Entrepreneurship Development

1/23

Introduction to Entrepreneurshipand Small Business Management


2/23

What is Business? Zoltan Acs, a noted economist, defined a business as a

conscious, willful effort to organize economic activitythat consists of a collection of contracts when morethan one party is involved.

A business is a legal entity, recognized by law, which ispermitted to enter into binding contracts with persons

or other businesses.


3/23

Forms of Business Sole Proprietorship

Partnership

Corporations


4/23

Sole Proprietorship Asole proprietorship is a business owned by a single

individual that is not incorporated. The life of theorganization is limited to the life of the individual whostarted it.

Advantages: It is easy and inexpensive to form, and, once operating, it is

subject to few government regulations. It pays no corporate income taxes, and its earnings are

taxed at the owners tax rate. Disadvantages: The business usually has difficulty obtaining large sums of

capital (money). The proprietors have unlimited liability for business debts.


5/23


6/23

Corporation Acorporation is a legal entity recognized by the state. A

corporation bylaw must display Inc. Advantages: It permits limited liability for the owners since they only own shares of

stock of the corporation. It permits easy transfer of ownership since there are rarely conditions

placed on buying or selling stock. It has unlimited life. It can continue to operate long after the original owners have departed. Disadvantages: The legal costs of forming and maintaining the corporation can be substantial. The formation may require substantial legal effort and a fair amount of

government regulation.


7/23

Promoter of All Businesses-

Entrepreneur


8/23

Entrepreneur He is an agent who buys factors of production at

certain prices in order to combine them into a productwith a view to selling them at uncertain prices infuture.

He is an organizer who combines the land, labour andcapital to produce a product. This gives three implicit

factors to be inherent in him: Moral Qualities for work judgment

Command over sufficient capital

Uncertainty of profits.


9/23

EntrepreneurAs an innovator (Schumpeter)

The introduction of the new product in the market.

The instituting of the new production technology. The opening of new market.

The discovery of new source of supply of raw material

The carrying out of the new form of organisation of any

industry by creating of a monopolyposition or thebreaking up of it.


10/23

Characteristics Hard work

Desire for High Achievement

Highly Optimiastic Independence

Foresight

Good Organiser

Innovation


11/23

Functions Idea generation

Scanning of the best suitable idea

Determination of the business objectives Product analysis

Market research

Determination of form of ownership

Raising necessary funds

Recruitment of men


12/23


13/23


14/23


15/23

Difference between Entrepreneur

and Manager On the basis of Motive

On the basis of Status

On the basis of Risk-bearing On the basis of Rewards

On the basis of Innovation

On the basis of Qualification


16/23

Types of Entrepreneur There are many types of entrepreneur on the basis of

skills, on the basis of need, etc.

But most prominent and universal are of four types- Innovative Entrepreneurs

Imitative Entrepreneurs

Fabian Entrepreneurs

Drone Entrepreneurs


17/23

Innovative Entrepreneurs Entrepreneurs which use their creativeness and logical

thinking for doing something new. The new can beanything of the following:

Bringing new product in the market

New technology

New market and much more.

These possess characteristics like creativity, problemsolving, foresightedness etc.


18/23

ExampleBy linking his Microsoftsoftware to IBM's first PCs,

he dominated the industry.

He developed a two-prongstrategy of expanding themarket while maintaining astrong hold on competitors.

Bill Gates 1955


19/23

Created a new model forPC sales

Cutting out the retail

middleman and custom-

building computers to suit

buyers needs put Dell at

the front of the class of PCmakers.

Michael Dell 1965


20/23

Muhammad Yunus 1940

Founded a banking system

30 years ago

To lend small amounts ofmoney to the rural poor inBangladeshi villages.

2006 Nobel Peace Prizewinner,


21/23

Imitative Entrepreneurs The persons who work according to the others

innovations, strategies etc. and copy others way ofdoing business.

Examples from Your side!!!!!


22/23

Fabian Entrepreneurs Fabian Entrepreneurs are characterized by very great

caution and skepticism in experimenting any changein their enterprises.

They imitate only when it becomes perfectly clear thatfailure to do so would result in a loss of the relativeposition in the enterprise.


23/23

Entrepreneurship Entrepreneurship is the attempt to create value

through recognition of business opportunity, themanagement of risk taking appropriate to the

opportunity and through the communicative andmanagement skills to mobilize human, finanacial andmaterial resources necessary to bring a project tofruition.

Documents

Unit- I Entrepreneurship Development