MINOR GROUP : (A) ENTREPRENEURSHIP

GROUP 1: ENTREPRENEURIAL FINANCE

Course Code COM1MN101
Course Title FUNDAMENTALS OF ENTREPRENEURSHIP
Type of Course Minor
Semester 1
Academic Level 100-199
Course Details Credit Lecture per Tutorial per Practical Total
week week per week Hours
4 3 - 2 75
Pre-requisites Having a basic understanding of business concepts and principles
can be beneficial. An innate curiosity about how businesses work and
a passion for creating something new are good.
Course Summary This course aims to develop students with the foundational
knowledge and skills needed to start new entrepreneurial ventures. It
covers essential concepts, tools and strategies for identifying
business opportunities, developing innovative ideas and successfully
launching and managing a business unit.

EVALUATION SCHEME
Course Credit Internal External Total
Major & Minor Courses 4 30 70 100
General Foundation Courses 3 25 50 75

INTERNAL EVALUATION OF THEORY COMPONENT

Sl. Components of Internal Internal Marks for the Theory Part of a Major /
No. Evaluation of Theory Part Minor Courses of 4- Credits
of a Major/ Minor Course Theory Only
4 Theory Modules Open-ended Module - 5
1 Test Paper / Mid-semester 10 4
Exam
2 Seminar/ Viva/ Case Study 6 4
3 Assignment / Project 4 2
Total 20 10
30

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 MODULE I
INTRODUCTION TO ENTREPRENEURSHIP
Introduction
An entrepreneur is one who plays a significant role in the economic development of a country. The term
“Entrerpreneur” is derived from the French verb ‘entreprendre’ which means “to undertake a business
venture”. Basically entrepreneur is a person who has the initiative skill and motivation to set up a
business or an enterprise of his own and who always looks for high achievements. He looks for
opportunities, identifies them and seizes them maily for economic gains.
The concept of entrepreneurship involves mobilisation of resources and utilisation of them with a view
to initiate changes in production. It is the intentional activity of a person or a group of persons,
undertaken to initiate, maintain or enhance profit by the production or supply of goods and services. It
is very often characterised by adventurism, risk bearing, innovation of new production ideas,
identification of new usage for men and materials etc.
Meaning
Entrepreneurship can be described as a process of executing the work of a business in a new and better
way. It is the ability and readiness to develop, organise and run a business enterprise, along with any of
its uncertainties in order to make profit. It is the process of creating, developing and managing a new
business venture with the aim of generating profits or create value.
Entrepreneurial Concepts
The common concept of the term “entrepreneur” is often associated with a person who starts a new and
small business of his own. The business may be manufacturing, transport, trade or any other self-
employed vocation in the service sector. Entrepreneur is an organiser and speculator of a business
enterprise. The entrepreneur lifts economic resources our of an area of lower into an area of higher
productivity and greater yield.
Definition of Entrepreneurship
Entrepreneurship can be defined as “the ability and readiness to develop, organise and run a business
enterprise, along with any of its uncertainties in order to make a profit.”
Entrepreneurship is defined as “the process of setting up a business, taking it from an idea to realisation.”
Definition of Entrepreneur
“An entrepreneur is a person who only provides capital without taking active part in the leading role in
enterprise.” Adam Smith
“An entrepreneur is one who always searches for change, responds to it and exploits it as an opportunity.
Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an
opportunity for a different business or service.” Peter F Drucker
“Entrepreneur is a person or a group of persons who bears risk and uncertainty.” F H Knight

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 Entrepreneur refers to: Entrepreneurship refers to:
Visualiser Vision
Organiser Organisation
Initiator Initiative
Innovator Innovation
Imitator Imitation
Motivator Motivation
Planner Planning
Decision Maker Decision Making
Risk bearer Risk bearing
Entrepreneurs and Intrapreneurs
Entrepreneurs are person who initiate their own business enterprises and develops them into large scale
corporations, retaining their tile over them.
An intrapreneur is an employee who is tasked with developing an innovative idea or project within a
company. Intrapreneurs are individuals who are tasked with creating new and innovative
products within an already-established business. Backed by a company's available resources,
intrapreneurs develop open-ended ideas and turn them into real-world products and services.
The main difference between an entrepreneur vs. intrapreneur is that an entrepreneur starts their own
company, whereas an intrapreneur works at a company that someone else founded. An entrepreneur
develops a concept for a new business, which may include marketing products and services (or
occasionally both).
Characteristics of an entrepreneur
1. Willingness to work hard
Willingness to work hard is a distinguishing characteristic of a successful entrepreneur. His
tireless, tedious and laborious work enables him to revive his business, even at the face of peril.
2. Desire for high achievement
An entrepreneur must have a strong desire to achieve high goals in business. This high
achievement motive provides him sufficient strength to surmount obstacles, overcome anxieties,
repair misfortunes, devise remedial actions and to run the business successfully.
3. Stubborn optimism
A successful entrepreneur does not get worries by the problems faced by them. He is optimistic
that situations tend to become favourable to his business in the near future. Problems do not
dishearten him.

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 4. Independence
A successful entrepreneur does not like to be guided by others. He strictly adheres to his own
routine. He likes to be independent in matters regarding his business.
5. Clear foresight
An entrepreneur must have a clear foresight to know about the future environment of his
business. He must have the ability to visualise the likely changes that may taken place in market,
consumer attitude, technological changes etc and to take timely actions accordingly.
6. Organising capacity
A successful entrepreneur must have the ability to organise all production resources like men,
materials and money and to channel them in such a way as to start up the enterprise and then to
produce goods.
7. Innovative skill
Production is essentially consumer oriented. So, in view of the chaing taste and attitude of the
customers from time to time, an entrepreneur must initiate research and innovations to produce
goods in such a way as to satisfy the changing needs of the customers.
Classification of Entrepreneurs / Different types of Entrepreneurs
I. Classification by Clarence Danhof
Clarence Danhof, on the basis of his study of the American agriculture, classified entrepreneurs in the
manner that at the initial stage of economic development gathers momentum, they become more
innovating and enthusiastic. Based on this, he classified entrepreneurs into four types:
1. Innovating Entrepreneurs
An innovating entrepreneur is one who introduces new goods, employs new methods of
production, discovers new markets and reorganises the enterprise accordingly. Such
entrepreneurs can work successfully only when a certain level of economic development has
already been achieved, and consumers look forward for change and improvement.
2. Imitative Entrepreneurs
These entrepreneurs try to imitate the successful innovations of innovating entrepreneurs.
Imitative entrepreneurs do not take pains to innovate changes themselves, they only imitate the
production techniques and technology innovated by others. Such type of entrepreneurs are most
suited to the economics of under developed countries.
3. Fabian Entrepreneurs
Fabian entrepreneurs are very cautious and skeptic in experimenting any change in the working
of their enterprises. They become ready to imitate only when they are convinced that a failure to
do so would result in loss of the relative position of the enterprise in the business arena.

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4. Drone Entrepreneurs
Drone entrepreneurs are unwilling to bring about any change in the existing production system,
even if the delay in doing so, has caused repeated losses to their enterprises.
II. Classification by Behavioural Scientists
1. Solo Operators
This type of entrepreneurs prefers to work alone and if needed they may employ a few hands as
their sub-ordinates.
2. Active Partners
Entrepreneurs who start/carry on enterprises as joint ventures are classified as active partners.
All the partners take active part in the operation of the business. Those entrepreneurs who only
contribute funds to the enterprise but do not actively participate in business, are simply called
“partners”.
3. Inventors
Entrepreneurs, whose competence and inventiveness prompt them to invent new products and
new production methods are called “inventors”. Their basic interests are centered on research
and innovations.
4. Challengers
The challengers put forth by an industry prompt these entrepreneurs to plunge into that industrial
enterprise, when one challenge is met successfully, they do not hesitate to face a new challenge.
5. Buyers
These entrepreneurs prefer to evade risks. So, instead of facing risks involved in starting a new
business, they like to buy an ongoing one.
6. Life timers or inherited entrepreneurs
Entrepreneurs who inherit family business fall under this category. They take business as an
intergral part of their life. Entrepreneurs of large-scale business concerns like TATA, Birla,
Dalmia etc belong to this class.
III. Another mode of classification of entrepreneurs who are not included in the definition
formulated by Danhof and the behavioural scientists are given below:
1. Industrial Entrepreneurs
Entrepreneurs who belong to the small-scale industry sector fall under the category of industrial
entrepreneurs. A manufacturer, who identifies the potential needs of customers and tailors a
product or service to meet the marketing needs.
2. Institutional Entrepreneurs
Institutional entrepreneurship occurs when a person or group of people work to drastically
change an institution and in process form a new institution. Since individual enterprises are not

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 able to grow or develop beyond a limit, it becomes necessary to institutionalise enterprises and
to co-ordinate entrepreneurial skills. When a team of entrepreneurs work unitedly, the enterprise
gains an institutional nature.
3. Technological Entrepreneurs
Technological entrepreneur is defined as a business leadership that involves identifying high-
potential, technology-intensive commercial opportunities, gathering resources such a talent and
capital and managing rapid growth and significant risk using principled decision-making skills.
4. Instigated Entrepreneurs
Due to the pressure exerted on persons by circumstances, they are compelled to become
entrepreneurs. The problem of severe unemployment instigated young men in our country to earn
their livelihood by trying their luck at the business field.
IV. On the basis of the type of business
1. Business Entrepreneurs
These entrepreneurs first conceive an idea for a new product and then setup a business to
materialise the conceived idea into a reality. Entrepreneurs who set up printing press,
advertising agency, textile shops etc belongs to this class.
2. Trading Entrepreneurs
These entrepreneurs undertake trading activities, identify potential markets and stimulate
demand for their products by adopting sales promotion techniques. Trading entrepreneurs
engage in both internal and international trade.
3. Industrial Entrepreneurs
Industrial entrepreneurs, who are basically product-oriented business men are real
manufacturers. They start industrial units and avail the possibility of making new industrial
products.
4. Corporate Entrepreneurs
Corporate entrepreneurs demonstrate their innovative skills in organising enterprises in the
corporate sector. They plan, develop and mange corporate undertakings under some statute or
act.
5. Agricultural Entrepreneurs
These entrepreneurs undertake such agricultural activities as raising and marketing of crops,
fertilisers etc. These entrepreneurs dominate the agricultural sector.

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 V. On the basis of the use of technology
1. Technical Entrepreneurs
A technical entrepreneur belongs to the “craftsman type”. His aim is to produce new and
improves quality or goods. He is well-versed in production techniques and he concentrated more
on production than on marketing.
2. Professional Entrepreneurs
A professional entrepreneur taken interest in commencing a business, but once it started, he
looses interest in managing it any longer. He sells out the running business and sets-up another
one with the sale proceeds of the previous one. He possesses a dynamic nature.
VI. On the basis of motivation
1. Pure Entrepreneurs
A pure entrepreneur is an individual who is motivated by psychological and economic rewards.
He takes up an entrepreneurial activity for his own personal satisfaction or for profit.
2. Induced Entrepreneurs
Induced entrepreneurs are those who are induced to take up an entrepreneurial activity due to the
policy measures of the government that offer incentives, assistance, concessions etc to start a
new venture. Most of the entrepreneurs belong to this class.
3. Motivated Entrepreneurs
The possibility of producing and marketing a new product for the use of customers, motivate
these entrepreneurs to come into existence. When the product starts enjoying sufficient demand
they are again motivated by the increasing profit.
4. Spontaneous Entrepreneurs
A spontaneous entrepreneur is an individual who starts a business or engages in entrepreneurial
activities based on initiative and personal motivation rather than being prompted or influenced
by external factors. Inborn initiative, boldness and self confidence tend to become the motivating
factors of spontaneous entrepreneurs.
Entrepreneurial Mind-set
An entrepreneurial mindset is a set of skills that enable people to identify and make the most of
opportunities, overcome and learn from setbacks and succeed in a variety of settings. It refers to a
particular way of thinking and approaching opportunities, challenges and decision-making.
Entrepreneurial Traits
Entrepreneurial traits are the typical characteristics, abilities and thought patters associated with
successful entrepreneurs. Entrepreneur characteristics are varied, but they make an individual into
business person who is not afraid to take on the challenges of starting a company from scratch.

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Traits or Qualities of a successful Entrepreneur
1. Capacity to assume risk
An entrepreneur must have sufficient self confidence to assume risk. Being an investor and a
financier, he should be able to shift investments in search of larger profits. He should be patient
enough to tie up his capital and wait for good returns. Risk and rewards are mutually
complementary. The greater is the risk, the greater will be the profitability.
2. Technical Knowledge and willingness to adopt changes
Economical growth of a county is accelerated by technological advancements. The process of
development all over the world is speeded up by innovations and innovations. So the primary
goal of the entrepreneurs in developing countries should be constant search for new technologies
an d their timely application.
3. Ability to mobilise resources
Scarcity of resources is an inherent draw back experienced by developing countries. So an
entrepreneur in such a country should be able to mobilise necessary resources in the best possible
manner and utilise them most economically for achieving his business objectives.
4. Ability to organise and administer
Industrial development of a country greatly depends on the ability of its entrepreneurs to build
up sound organisations and administer them properly. He should select, train and develop
perspons who can manage and control the labour force. He should select the right person and
wisely delegate authority in order to multiply himself.
5. Mental ability
He should have good intelligence and ability to analyse business situations.
6. Clear-cut objectives
An entrepreneur should have clear cut objectives about the nature of business, type of products,
markets, profits etc.
7. Capacity to Guard Business Secrets
Secrecy is one of the important aspects of a successful business. A good entrepreneur should
have the capacity to guard business secrets.
8. Capacity to interact with people
One of the most important characteristics of an entrepreneur is his capacity to interact with
people. He should have sufficient maturity and to be tactful in dealing with, suppliers, customers
and those who deal with his business.
9. Effective Communication
A good entrepreneur should be able to communicate his ideas, message and information
effectively to others.

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 10. Self-confidence
Only one with self confidence and who is courageous enough to take risk can succeed as an
entrepreneur.
11. Motivator
As leaders of the business unit, he should be able to motivate the members to achieve the business
goals.
12. Decision-maker
An entrepreneur should have the capacity to analyse the various aspects of the business and
arriving at a decision.
13. Watching for opportunities
He, like a watch dog, looks for favourable business opportunity and takes necessary action
accordingly.
14. Persistence
Following the saying “try and try again, you will succeed at last”. He is always tenacious to
make extreme efforts to get rid of the obstacles coming in the way of reaching the ultimate goals.
15. Quality Conscious
He has, always, put effort to excel better than the existing standards of performance.
16. Effective Monitoring
Personality supervises the work to ensure that the work is accomplished according to the
standards set forth.
17. Concern for Employees
He has to keep concern and take proper action to improve the welfare of the employees working
in his enterprise.
Overcoming Common Entrepreneurial Challenges
1. Lack of Capital
One of the most common challenges faced by entrepreneurs is lack of capital. It can be difficult to secure
funding for the business, especially in the early stages. To overcome this challenge, consider alternative
sources of funding, such as grants, loans, and investors. we can also explore cost-cutting measures, such
as reducing overhead costs and utilizing technology.
2. Competition
Competition is a fact of life in the business world. To overcome the challenge of competition, it’s
essential to differentiate our product or service from the competition. This can be achieved through
marketing, branding, and providing excellent customer service. It’s also important to stay informed
about the competition and continuously refine our strategies to stay ahead.

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 3. Time Management
Time management is a critical aspect of entrepreneurship. It’s essential to balance your time between
running the business, networking, and taking care of our personal life. To overcome the challenge of
time management, prioritize our tasks, delegate responsibilities, and make use of technology and tools
that can help us manage our time more efficiently.
4. Balancing Work and Life
Entrepreneurs often face the challenge of balancing work and life. It can be easy to become consumed
by the demands of running a business and neglect other aspects of our life. To overcome this challenge,
it’s essential to set boundaries, take breaks, and prioritize our personal life.
5. Managing People
Managing people is a critical aspect of entrepreneurship. To overcome the challenge of managing people,
it’s essential to communicate effectively, provide clear expectations, and be an effective leader. It’s also
important to provide our team with the tools, resources, and support they need to succeed.
6. Overcoming Setbacks and Failures
Setbacks and failures are inevitable in the world of entrepreneurship. To overcome these challenges, it’s
essential to have a growth mindset, stay focused on your goals, and continuously learn from your
experiences. Remember, failure is an opportunity to learn and grow, not a reason to give up.
In conclusion, the challenges of entrepreneurship can be overcome with the right strategies and mindset.
By addressing the challenges of lack of capital, competition, time management, balancing work and life,
managing people, and overcoming setbacks and failures, entrepreneurs can achieve long-term growth
and success. With determination, perseverance, and a positive attitude, you can turn your ideas into a
thriving business and make your mark in the world.
Importance of entrepreneurship in the economy
1. Raises Standard of Living
A significant role of entrepreneurship in economic development is that it can greatly enhance the
standard of living for individuals and communities by setting up industries and creating wealth and new
positions. Entrepreneurship not only provides large-scale employment and ways to generate income, it
also has the potential to improve the quality of individual life by developing products and services that
are affordable, safe to use, and add value to their lives. Entrepreneurship also introduces new products
and services that remove the scarcity of essential commodities.
2. Economic Independence
Entrepreneurship can be a path to economic independence for both the country and the entrepreneur. It
reduces the nation’s dependence on imported goods and services and promotes self-reliance. The
manufactured goods and services can also be exported to foreign markets, leading to expansion, self-
reliance, currency inflow, and economic independence. Similarly, entrepreneurs get complete control

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over their financial future. Through their hard work and innovation, they generate income and create
wealth, allowing them to achieve economic independence and financial security.
3. Benefits of New Firms and Businesses
Entrepreneurs identify market needs and develop solutions through their products and services to begin
their business venture. By starting new firms and businesses, entrepreneurs play a key role in shaping
the economy and creating a more dynamic and diverse business landscape. Entrepreneurship also
promotes innovation and competition, leading to new and improved products and services that contribute
to economic growth and development.
4. Creation of Jobs
Entrepreneurship is a pivotal driver of job creation. Running the operations of new businesses and
meeting the requirements of customers results in new work opportunities. Entrepreneurship also drives
innovation and competition that encourages other entrepreneurs and investments, creating new jobs in a
wide range of industries, from manufacturing and construction to service and technology sectors.
5. Encourages Capital Formation
Capital formation is the process of accumulating resources, such as savings and investments, to fund
new business ventures and support economic growth. Entrepreneurship can encourage capital formation
by attracting investment. In addition, the creation of new businesses and the growth of existing firms
can also contribute to the development of a more diverse and dynamic economy that encourages capital
formation and opens the door to a wide range of investment opportunities.
6. Elimination of Poverty
Entrepreneurship has the potential to lift people out of poverty by generating employment and
stimulating economic activity. Entrepreneurship also contributes to the development of local economies
and helps improve the overall standard of living.
7. Community Development
Entrepreneurship promotes economic growth, provides access to goods and services, and improves the
overall standard of living. Many entrepreneurs also make a positive impact on their communities and
improve their well-being by catering to underserved areas and developing environment-friendly
products. Their work can help build stronger, more vibrant communities and promote social and
economic development.
8. Optimal Use of Resources
Entrepreneurship can help identify market opportunities and allocate resources in the most effective way
possible. Entrepreneurs also play a key role in developing innovative products and services that meet
the needs of customers while optimizing the use of available resources.

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9. Increases Gross National Product and Per Capita Income
Entrepreneurship can play a significant role in increasing economic growth and prosperity by increasing
Gross National Product (GNP) and Per Capita Income (PCI). GNP measures the total economic output
of a country while PCI calculates the average income per person. The increase in GNP can lead to a rise
in PCI. Entrepreneurship can contribute to GNP by creating new businesses and industries, which can
lead to job creation, increased consumer spending, and higher tax revenue.
Ethical considerations in entrepreneurship
1. Honesty and Integrity:
Entrepreneurs must prioritize honesty and integrity in all aspects of their business. This includes being
truthful in marketing and advertising, providing accurate information about products or services, and
being transparent with customers, employees, and stakeholders. By being honest and maintaining high
ethical standards, entrepreneurs build trust and credibility, which are essential for long-term success.
2. Fairness and Equality:
Entrepreneurs should strive for fairness and equality in their business practices. This means treating all
employees, customers, and stakeholders with respect and providing equal opportunities for growth and
development. Discrimination based on gender, race, ethnicity, religion, or any other characteristic should
be strictly avoided.
3. Social Responsibility:
Entrepreneurship goes beyond profit-making; it involves contributing positively to society.
Entrepreneurs should consider the social and environmental impacts of their business operations. This
includes minimizing waste and pollution, supporting sustainable practices, and giving back to the
community through philanthropy or corporate social responsibility initiatives.
4. Respect for Intellectual Property:
Entrepreneurs must respect intellectual property rights, including patents, copyrights, and trademarks.
They should not engage in plagiarism, piracy, or any form of intellectual property
infringement. Respecting intellectual property not only protects the rights of others but also
fosters innovation and creativity within the business ecosystem.
5. Ethical Leadership:
Entrepreneurs should lead by example and promote ethical behaviour within their organizations. This
involves setting a clear ethical vision, providing guidance to employees, and fostering a culture of
integrity and accountability. Ethical leaders prioritize the well-being of their employees, clients, and the
community, and make decisions that align with ethical principles.
6. Consumer Protection:
Entrepreneurs have a responsibility to protect the interests of their customers. This includes providing
safe and high-quality products or services, ensuring fair pricing, and offering clear and accurate

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information about the benefits and risks associated with their offerings. Entrepreneurs should also
have robust customer support and complaint resolution mechanisms in place.
7. Ethical Marketing:
Entrepreneurs must engage in ethical marketing practices that provide truthful and accurate information
about their products or services. This includes avoiding false advertising, misleading claims, or
manipulative tactics. Entrepreneurs should also respect consumer privacy and data
protection laws, ensuring that customer data is handled securely and ethically.
8. Ethical Supply chain Management:
Entrepreneurs should be aware of the ethical implications of their supply chain and ensure that their
suppliers adhere to ethical practices. This includes ensuring fair wages and working conditions, avoiding
child labour or forced labour, and promoting sustainable sourcing practices. By maintaining an ethical
supply chain, entrepreneurs contribute to the overall ethical integrity of their business.

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