All About Entrepreneurship

Sunil Shukla

Entrepreneurship

Entrepreneurship is a purposeful activity

of an individual or a group of associated

individuals, undertaken to initiate,

maintain or aggrandise profit by

production or distribution of economic

goods.

Entrepreneurial Individual Has concept, vision, dream Adapts concept to reflect realities in environment,

scans environment Assesses risks versus rewards Mobilizes resources Able to convert dream into products and people within

an organizational context Able to champion the concept to a wide range of

publics and partners Persevere in overcoming obstacles Optimizes profits

An Integrative Model of Entrepreneurial Inputs and Outcomes

Inputs Outcomes

Environmental Opportunities

Entrepreneurial individuals

An organizational context

Unique business concepts

Resources

The entrepreneurial Process

• Identify opportunity

• Assess and acquire necessary resources

• Implementation

• A going venture

• Value

• New products, services

• Processes

• Profits and/or personal benefit

• Technologies

• Employment, asset, and revenue growth

Entrepreneurial creation Intensity (EI)

Number of events (and) degree of entrepreneurship

Innovation Risk taking

Proactive ness

Source: Michael H. Morris, P. Lewis, and Donald L. Sexton, “Reconceptualizing Entrepreneurship: An Input-Output Perspective,”, SAM advanced Management Journal 59, no.1 (Winter 1994): 21-31

Entrepreneurial Personality- Psychological

1. Motivation – driven by range of factors

Necessity (survival)

Opportunity (proactivity)

Dissatisfaction (can’t stand job)

Curiosity (What if…?)

Material gain (We could make a killing…)

Achievement oriented more than anything else

Driven by the task, challenge, opportunity

Money as a by-product, but scorecard

2. Strong belief in themselves- believe they can change their environments

…Personality

3. Calculated risk-takers (financial, career, family & social, psychic)

Attempt to estimate likelihood and magnitude of key risk factors and manage or mitigate them through good planning or decisions

4. High tolerance of ambiguity

Process can be loose, messy, shift directions

Prize their independence – self-motivated, self-reliant, prefer autonomy, have perseverance

Situation-based Characteristics

Willingness and ability to assume and manage risks

More critical with new-to-the-world products

Political skills important in large corporate settings

Adaptability and tenacity are bigger factors in turbulent environments

Dark Side Traits

Excessive need for control

Tendency to micromanage

Suspicion – others will steal my idea

Impatience

Need for applause

Defensive attitude

Entrepreneurial Risks Sinking the Boat Risk Missing the Boat Risk

TR=f (SBR, MBR)

Missing the boat risk curve

Total Risk

Planning Time

Sinking the boat risk curve

Risks at Startup

Risk in Opportunity Identification

Risk in Commercial Viability

Risk in Investment

Risk in Financing

Rewards of Entrepreneurship Financial

A successful business has the potential to make good profits and provide substantial wealth for the entrepreneur.

Social and Emotional

There is seldom a higher reward than making a positive difference to another person's life.

The successful business provides jobs, pride and financial security for its employees.

Independence Financial success increases the independence and potential of

Growth Rewards.

Typical Risk/Reward Visualization

Money

Time

Break-evenPoint

Potential Reward

Risk

Entrepreneurship Development : Process, Stages and Interventions

CONSTRAINTS TO EMERGENCE OF

INDIGENOUS ENTREPRENEURS

o Socio-cultural factors – job orientation?

o Low motivation and confidence

o Inadequate information on procedures,

fundraising

o Inadequate knowledge on:

- Market Assessment

- Enterprise Management

Entrepreneurship Development: Key Components

ENTREPRENEURSHIP DEVELOPMENT PROCESS

• Identify, select, train, counsel and support potential entrepreneurs for creating new enterprises

• Facilitate growth of existing entrepreneurs and groom

successors

• Contribute towards developing entrepreneurial

culture

• Facilitate creation of a conducive environment for

emergence and growth of enterprises

• Intervene for developing enterprises- technology and

management (market, quality, finance, human

resources)

STAGES OF ENTREPRENEURSHIP

DEVELOPMENT

GROWTH

SURVIVAL

EMERGENCE (START-UP)

EARLY SOCIALIZATION

(1) Early socialization

Creating literature Short duration vacation camps Visits to industries Interactions with entrepreneurs/

achievers from different fields Competitions, debates Success stories, Projection of

Business Role Models

(2) Emergence (Start-up)

Entrepreneurship education Entrepreneurship training Business Plan teaching/ training Entrepreneurship orientation Technical Training Management Skills Development Technology Demonstrations Trade Fairs Incubation

(3) Survival

Accounting systems Marketing and product promotion Managing Human resources Seminars and workshops on

technology, quality, operations, machine safety

Systems development ICT and MIS

(4) Growth

Export marketing R&D, Innovation, Value Addition Diversification Cluster development Finance- IPO Corporatization Internationalization Brand building Succession planning

Thankssunilshukla@ediindia.org