Concept of entrepreneurship essay

Concept of entrepreneurship essay

Essay on Entrepreneurship: Concept and Broad Aspects of Entrepreneurship

Essay on Entrepreneurship: Concept and Broad Aspects of Entrepreneurship!

Concept of Entrepreneurship:

Entrepreneurship may be defined as follows:

Entrepreneurship is the process of searching for opportunities for gain through environmental analysis; and exploiting such opportunities by converting them into a profitable business enterprise.

Following are cited some outstanding definitions of entrepreneurship:

(1) “Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity and through the communicative and managements skills to mobilize human, financial and material resources to bring a project to fruition.” —John Kao and Howard Stevenson

(2) “An entrepreneur is an innovator who carries out new combinations to initiate and accelerate the process of economic development.” —Joseph Schumpeter

(3) “An entrepreneur is an agent who unites all factors of production – land, labor, capital etc. and earns profits after making payments for these factors of production.” —J. B. Say

In short, an entrepreneur is a grand personality, assuming the roles of a risk-taker, a resource assembler, an innovator and an organizer – all combined into one.

Broad Aspects of Entrepreneurship:

We propose to the examine at length, certain broad aspects of entrepreneurship, as following:

(a) Generation of Ideas-Role of Creativity and Innovation:

The very first step in entrepreneurship is generation of some idea/ideas; which can be converted into profitable business opportunities. Following are suggested be some good sources, out of which an entrepreneur can steal ideas for initiating new business enterprises.

(i) Market Surveys:

Through market surveys, an entrepreneur may gather ideas for starting a new business venture.

Such surveys may help the entrepreneur to get information on matters, like the following:

1. Demand and supply position of various products

2. Elements of competition existing in various business lines

3. Nature of demand for popular products i. e. whether the demand is relatively elastic or inelastic

4. Likely trends in demand/supply of popular products etc.

The entrepreneur, on the basis of market surveys, can discover what gaps do exist in the supply position of certain products; which he can plan to fill up through his pioneering efforts. In this process of filling supply gaps, the entrepreneur may seek advice and consultations of business leaders, distribution channels, commercial consultants etc.

(ii) Contacts with Prospective Consumers:

Consumer is the foundation of business. By having contacts with some prospective consumers, the entrepreneur can gain useful information about the types of products and services which they want; and which are not available in the market so far. He can get an idea of their tastes, preferences, habits, income etc.; on which bases he (the entrepreneur) can develop his own product idea.

(iii) Projects Reports and Publications:

Project reports of researchers vis-a-vis various industries may provide useful ideas to an entrepreneur to plan which industry he can enter with promising business opportunities. Likewise, governmental publications on trade and industry can be useful to the entrepreneur in discovering business ideas.

However, in finalizing business opportunities on the basis of project reports and publications, the entrepreneur will do well to consult technical, financial and other experts; who could guide the entrepreneur as to the ‘ins’ and ‘outs’ of various business propositions.

(iv) Trade Fairs and Exhibitions:

Trade fairs and exhibitions are a good source of businesses ideas. These give an idea of the diversity of products, the number of competitors in a field, popularity of various products and their manufacturers, reaction of general public’s to products of various manufacturers etc.

(v) Entrepreneur’s Own Creativity:

The most importance source of business ideas is entrepreneur’s own talent of creativity. Creativity is an ability of mind to extract something from an environment which apparently may seem to consist of nothing. Creativity depends on one’s imagination to contemplate new and better ideas, leading to innovations on the part of the entrepreneur. Such innovations may provide seeds to plant the tree of a new business venture.

However, innovation is not the same thing as invention. Invention means producing or designing something which has not existed before; whereas innovation means introduction of new things, new ideas or new ways of doing something which has already been discovered.

Innovation may not only provide business ideas to an entrepreneur; but also enable him to gain a competitive edge for survival and growth in the present-day economy which is globalized and characterized by intensely increasing competitive conditions.

Some examples of innovations may be:

1. Developing new and unique products on the basis of the inferiority of existing products in the market i. e. capitalizing on the inferiority of existing products and coming out with own superior products.

2. Exploiting some unexploited natural resource, for entrepreneur’s own product

3. Utilize unused supply of raw material for manufacturing a new product

4. Taking advantage of incentives offered by government for the development of certain regions/certain lines of business

5. Getting clues from developments in other nations vis-a-vis consumption behaviours and patterns likely to enter developing economies due to demonstration effect

6. Recycling waste materials and turning them into useful products

7. Converting own hobby into business venture. For example, hobbies like interior decoration; fashion designing may be developed as profitable business ventures.

While generating business ideas, the entrepreneur must keep the following two considerations in mind:

(I) Ideas must match with entrepreneur’s own skills, resources and managerial competence

(II) Ideas must not be inconsistent with governmental regulations and business policies.

(b) Feasibility Study and Feasibility Report:

After discovering or creating certain ideas for basing a business venture on it; a very practical, crucial and significant step for the entrepreneur is to conduct a feasibility study of the proposed business idea i. e. examine the viability of the idea, from the following perspectives:

(III) Financial, and

Following is an account of the feasibility study of the proposed business idea from the above suggested perspectives:

(I) Technical Perspective:

Technical feasibility of the idea is judged in terms, like the following:

1. What is the most appropriate technology required for the particular business project; including contractual aspects of technology licensing?

2. What type of plant and equipment are available for being operated according to the selected technology?

3. What is the most economical technological size of the plant; and whether that size is practicable in view of demand constraints for the product to be turned out by the plant?

4. Whether necessary inputs – raw-materials, power, water, gas etc. are available for operating the plant, according to the selected technology?

5. Whether necessary manpower (managers, workers etc.) are available – quantitatively and qualitatively – for operating plant, according to technology?

6. What facilities are available for treatment and disposal of effluents without causing harm to the environment? Etc.

(II) Commercial Perspective:

To judge the commercial viability of the proposed business idea, the entrepreneur may be well advised to consider the following:

1. Manufacturing cost of production, for a period ranging from 5 to 10 years.

2. Existing demand for the product; and the demand potential in future.

3. Element of competition, telling upon demand prospects

4. Industry forecasts – future outlook and trends etc.

(III) Financial Perspective:

Financial viability of the proposed business idea may be judged from the following perspectives:

1. Estimated capital cost of project; with projection of cash flows, during the construction and operational period of the project

2. Working capital requirements

3. Modes of financing, based on debt equity ratio and other financial norms

4. Investment-profitability analysis based on methods like play back period, simple rate of return, net present value (NPV), internal rate of return (IRR) etc.

(IV) Social Perspective:

In case of private sector projects, evaluation is done in technical, commercial and financial terms. However, it is desirable to judge the proposed business idea, from the social perspective also.

To judge the project from social perspective, the following considerations must be kept in view:

1. Generation of employment, by the project

2. Foreign exchange earnings, by the project

3. Improvement in the quality of life, as a result of the product/service, produced/generated by the business project, etc.

Feasibility Report – a Specimen:

After conducting the feasibility study of the proposed business idea, the findings are presented in the form of a report known as the feasibility report or the project report. This report provides a basis for investment decision in a business project. It is equally needed to get sanction of the project from government, financial institutions etc.

A specimen of the feasibility report is given below:

Feasibility Report (Project Report):

Product name, chemistry of the product, specifications, applications and uses of the product etc.

(II) Technical Feasibility:

1. Technology required

2. Technical processes involved

3. Plant and machinery – specifications and capacity

4. Position of raw materials, power, fuel, gas, water and other inputs

5. Man-power requirements (managerial and operative), to operate plant.

6. Arrangements for disposal of effluents etc.

(III) Commercial Feasibility:

1. Manufacturing cost, for few years

2. Demand – existing and potential, for few years.

3. Competitive elements – existing and potential

4. Industry forecasts etc.

(IV) Financial Feasibility:

1. Cost of project

2. Working capital requirements

3. Modes of financing

4. Investment-profitability analysis

5. Break-even analysis

6. Projected Income Statements and Balance Sheets, for some 5 years or so. etc.

Contribution of project towards:

1. Employment generation

1. Foreign exchange earnings

2. Improvement in standard of living of people etc.

(i) Entrepreneur’s own recommendations

(ii) Copies of correspondence with technical, legal, financial, commercial experts

(iii) Reports of experts

(iv) Research data – collected and utilized etc.

(c) Preparation of a Business Plans:

After the feasibility report is approved and accepted by government, financial institutions etc.; the next step for the entrepreneur would be to prepare a business plan, which, when put to implementation, would result in the emergence of a business venture.

Such a plan is significant, as:

1. It provides guidance to the entrepreneur in organizing his work.

2. It is required by suppliers, with whom the entrepreneur is likely to finalize contracts for various purposes.

The entrepreneur prepares the business plan in consultation with technicians, engineers, architects, accountants, financial experts, marketing, experts etc.

Following is suggested the specimen of a business plan:

Specimen of a Business Plan:

(a) Constitutional Plan (Including Legal Plan):

(i) Form of ownership organisation i. e. sole proprietorship, partnership, private company or public company.

(ii) Agreement for foreign collaboration, if any

(iii) Agreement with partners

(iv) List of and agreements with signatories to the Memorandum of Association

(v) Plan for registration of company etc.

(b) Structural Plan: (Managerial Aspects):

(i) Type of organisation – line and staff, project, matrix etc.

(ii) Span of management and number of organizational levels.

(iii) System and channels of communication

(iv) Broad systems of controlling

(v) Authority-responsibility relationships etc.

(i) Location of plant – region and site

(ii) Requirements of plant and machinery for preselected technology.

(iii) Plant capacity utilization

(iv) Scheme of plant layout

(v) Agreements with engineers, contractors, architects etc.

(i) Comprehensive production budget with sub-budgets of raw-materials, labour, overheads etc.

(ii) Quality control system

(iii) Arrangements for disposal of effluents

(iv) Inventory control devices

(v) Agreements with suppliers of raw-materials etc.

(i) Source of finance for fixed capital and working capital

(ii) Broad scheme of capital structure

(iii) Cash budget

(iv) Schemes for ensuring financial control/financial discipline

(v) Agreements with banks, financial institutions, underwriters etc.

(f) Personnel Plan:

(i) Manpower planning for managerial personnel and operatives – quantitatively and qualitatively

(ii) Sources of recruitment

(iii) Procedures for selection, placement

(iv) Training programmes for operatives

(v) System of personnel compensation

(vi) Agreements with key managerial personnel etc.

(g) Marketing Plan:

(i) Composition of marketing mix

(ii) Organisation of marketing research department

(iii) Selection of advertising media; and determination of other sales promotional devices

(iv) Broad pricing strategies

(v) Agreements with distribution channels etc.

Essay on Entrepreneurship: Top 9 Essays | Business Management

Here is a compilation of essays on ‘Entrepreneurship’ for class 11 and 12. Find paragraphs, long and short essays on ‘Entrepreneurship’ especially written for school and college students.

Essay on Entrepreneurship

Essay Contents:

  1. Essay on the Introduction to Entrepreneurship
  2. Essay on the Definition of Entrepreneurship
  3. Essay on the Growth and Success of Entrepreneurship
  4. Essay on Entrepreneurial v/s Managerial Styles
  5. Essay on Entrepreneurial Development
  6. Essay on the Beliefs Regarding Entrepreneurship
  7. Essay on Financing of Enterprise
  8. Essay on the Factors Essential for Successful Entrepreneurship
  9. Essay on the Benefits of Entrepreneurship

Essay # 1. Introduction to Entrepreneurship:

Entrepreneurship is the name given to the factor of production which performs the functions of Enterprise. In economics, Land, Labour, Capital, Organisation and Enterprise are the five factors which are thought to be the basis of all the production activities.

Entrepreneurship in a broader sense can be considered as a process of action undertaken by an entrepreneur (Person) to establish his enterprise. It is a creative and innovative response to the environment.

Entrepreneurship can be described as a creative and innovative response to the environment. Such responses may take place in any field of social endeavour may be business, agriculture, social work and education etc.

For the entrepreneur it is important to have knowledge about the economic and political environment, more particularly about the economic policies of the government and the financial as well as commercial institutions.

Thus a simple definition of entrepreneurship is doing new things or doing things which are already being done in a new way.

According to Dr. J. E. Stepenek, “Entrepreneurship” is the capacity to take risk; ability to organise and desire to diversify and make innovations in the enterprise.

According to Higgins, Entrepreneurship is meant for the function of seeing investment and production opportunity, organising in enterprise to undertake a new production process, raising capital, hiring labour, arranging the supply of raw materials, finding site, introducing new techniques and commodities, discovering new sources of raw materials and selecting top managers for day to day operation of the enterprise.

It may be concluded that entrepreneurship is a composite skill, the resultant of many qualities and traits. These include, imagination ready to take risk, ability to bring together and utilize other factors of production such as capital, land and labour along with intangible factors such as capability to mobilise scientific and technological developments.

Entrepreneurship thus involves taking risk and making essential investments under conditions of uncertainty. At the same time it is connected with innovation, planning and taking decisions so as to increase productivity in industry, business and agriculture etc. It thus plays a key role in the process of economic development.

Essay # 2. Definition of Entrepreneurship:

Entrepreneurship is a pro­cess of action an entrepreneur undertakes to establish his enter­prise. Entrepreneurship is a re­sultant mix of many qualities and traits of an entrepreneur.

Entrepreneurship can be de­fined as a process undertaken by entrepreneur to augment his business interests. It is an exer­cise involving innovation and creativity that will go towards establishing his/her enterprise.

Entrepreneurship is the inclination of mind to take calculated risks with confidence to achieve a predetermined business or industrial objectives.

Essay # 3. Growth and Success of Entrepreneurship:

Entrepreneurship has opened avenues of great scope in the Indian economy. Our national economy is most suited to the growth of small business enterprise. Small business units offer a more convenient means of nurturing and developing entrepreneurship by providing the means of entry into business for new entrepreneurship talents. Small-scale industries are labour-in­tensive and can play an important role in solving the problem of unemployment.

Success of Entrepreneurship:

Following aspects are necessary for the successful entrepreneurship:

1. Regular inflow of information related to buyers, consumers, distributors, dealers, retailers, transporters etc., about raw material, quality aspects, government organisations, employees and competitors.

2. Satisfying the needs of customers.

3. Generation of adequate cash flow.

4. Regular objective assessment of the enterprise.

5. Improving productivity.

6. Maintenance of quality.

7. Use of technology of the time.

8. Be innovative.

9. Keep employees motivated.

10. Scrap or waste material be utilised properly.

11. Time management.

Essay # 4. Entrepreneurial v/s Managerial Styles:

An entrepreneur is a person who is motivated to satisfy a high need for achievement in innovative and creative activities. This creative behaviour and innovative spirit forms a process of an endless chain and is termed as entrepreneurship. An entrepreneur is also required to manage his business. He has to perform both entrepreneurial and managerial func­tions. After the start of the business he becomes more as manager.

Manager is one who specialises in the work of planning, organising, leading and controlling the efforts of others. He does it through systematic use of his classified knowledge and principles. He should have an insight of job requirement, which he should continuously update.

An entrepreneur must adopt the style of professional management. He must organise mana­gerial functions by setting long term objectives, formulating strategic policies, developing man­agement information system, monitoring and evaluation systems. He is required to possess management knowledge related to technical, economical, financial, human and administrative aspects.

There is a vast difference between owner-manager and professional-manager. The owner — manager is identified with individuality, flair, strong motivation to achieve success and pros­per, while the professional-manager is concerned with the planning, organising, motivating and controlling. Owner-manager builds the organisation, assumes all business risks, and also loses his reputation and prestige in the event of failure of business, whereas professional-manager is not exposed to such risks.

Thus entrepreneurship is a process of combining resources to produce new goods or services and reappears to initiate another change. Entrepreneurs are also required to play other roles, especially those of capitalist and manager. Managerial function of an entrepreneur is a continu­ous process of combining the factors related to production.

Essay # 5. Entrepreneurial Development:

For the economic development, entrepreneurial development is necessary. For the purpose of entrepreneurial development, rapid growth of small scale sector is necessary. Entrepreneur­ial development programmes are designed to help a person in strengthening his entrepreneur­ial motive and in acquiring skills and capabilities necessary for playing his role effectively.

Main objective of the entrepreneurial development programme is to motivate and assist pro­spective and potential entrepreneurs to set up small scale units of their own and thus become self-employed and contribute significantly to production and employment in the country.

Entrepreneurial development programme must be designed properly and should incorpo­rate the following:

(i) Developing, achievement, motivation and sharpening entrepreneurial traits and behaviour.

(ii) Project planning and development, and guidance on industrial opportunities, incen­tives and facilities, rules and regulations.

(iii) Developing managerial and operational capabilities.

Keeping the target group and target area in view various strategies and approaches are adopted. The process of entrepreneurial development is designed very carefully and starts from identifying the potential and right candidates, linking suitable project with each one, and then training and developing the managerial and entrepreneurial capabilities, counseling and motivating them, and then providing the required follow-up support to help them in establishing their venture.

Objectives:

Objectives of entrepreneurial development programme are to help to:

(i) Develop and strengthen their entrepreneurial quality.

(ii) Analyse environment related to small business and small industry.

(iii) Select product and its project.

(iv) Formulate projects.

(v) Understand the procedure for setting up of small enterprise.

(vi) Support needed for launching the enterprise.

(vii) Acquire basic management skills.

(viii) Appreciate the social responsibilities.

(ix) Let him set the objectives of his business.

(x) Prepare him to accept risks.

(xi) Take strategic decisions.

(xii) Develop communicating skills.

Training for Entrepreneur:

Proper training is essential for the success of any industry in production techniques, man­agement, marketing and other aspects.

Small Industries Service Institutes and their Extension Centres are organising trainings:

(i) To improve technical skills of workers,

(ii) For acquainting the entrepreneurs with advanced production and management techniques.

The courses for workers are organised in the following areas:

(a) Shop practice courses such as machine shop practice, tool room practice, foundry, blacksmithy, electrical shop practice etc.

(b) Trade oriented courses, such as tool making, fitter, sheet metal, pattern making, carpentry etc.

(c) Process oriented courses, such as welding, heat treatment, electroplating, leather works etc.

(d) Product oriented courses, sport goods, foot wear, paint, varnish making etc.

Training programmes for entrepreneurs are of two types namely:

(i) For graduate and di­ploma holder engineers, physics and chemistry graduates and

(ii) For rural artisans, educated unemployed, ex-servicemen, weaker sections of the society, women entrepreneurs etc. with special courses for each of the categories of persons.

For providing training and upgradation of technology and managerial skills, specialised institutions have been set up.

For conducting entrepreneurship development programmes, the lead was given by Small Industries Development Organisation through its small industries service centres. Entrepreneurship Development Institute of India (EDII) was established in 1983 at Ahmedabad as a resource organisation at the national level for the purpose of creating the institutional infra­structure for entrepreneurship development.

National Institute for Entrepreneurship and Small Business Development (NIES BHD) was established by the central Government at New Delhi, with the objective of coordinating activities related to entrepreneurship and small business development.

In addition, institutions established by the Government are:

(i) Rural Entrepreneurship Development Institute (RED) at Ranchi.

(ii) Rural Management and Management Centres (RMEDC) at Maharashtra.

Other organisational actively conducting entrepreneurship development programmes are:

(i) State Bank of India

(iii) Centre for Entrepreneurship Development at Ahmedabad and Hubli.

(iv) State financial corporations.

(v) Industrial consultancy organisations in various states.

(vi) Small Industries Extension Training Institute, Hyderabad.

(vii) Institute of Entrepreneurship Development (IEDs) in Uttar Pradesh, Bihar and Orissa.

(viii) Management Development Institute (MDI) at Gurgaon (Haryana) near Delhi.

Some of the other institutions for entrepreneurial development are:

1. Central Institute of Tool Design, Hyderabad.

2. Central Tool Room and Training Centre, Calcutta.

3. NI SIET, Guwahati.

4. Institute for Design of Electrical Measuring Instruments, Bombay.

5. Electronic Service and Training Centre, Ramnagar.

6. Process-cum-Product Development Centre for Glass and Ceramic Industry, Ranchi.

7. Process and Product Development Centre, Agra.

8. Process and Product Development Centre, Meerut.

9. Central Institute of Hand Tools, Jalandhar.

10. Hand Tool Design Development and Training Centre, Nagpur.

11. New Indo-Danish Tool Rooms, Jamshedpur and Bhubaneswar.

12. Ino-German Tool Rooms-Indore, Ahmedabad and Aurangabad.

13. National Institute for Entrepreneurship & Small Business Development, New Delhi.

14. National Institute of Design, Ahmedabad.

15. Centre for the Improvement of Glass Industry, Firozabad.

16. National Council for Cement and Building Materials, Delhi, Ballabgarh, Hyderabad, Patna and Madras.

17. Indian Plywood Industries Research Institute, Bangalore.

18. Central Pulp and Paper Research Institute, Saharanpur.

19. National Federation of Industrial Cooperatives Limited, New Delhi.

20. Central Machine Tool Institute, Bangalore.

Essay # 6. Beliefs Regarding Entrepreneurship:

According to literature there are many myths about entrepreneurship:

But myths and realities about its are different as follows:

1. Myth about entrepreneurs is that they are born not made but “reality” is that entrepreneur characteristics and traits may be acquired through properly structured learning.

2. Myth regarding entrepreneurs is that all required is money but generally it is observed that excessive and surplus money reduces the risk taking opportunities, scarce for care resources and grasp for opportunities.

3. Myth regarding entrepreneurship is that it is profile of traits and characteristics but practically it is a combination of situational issues.

4. Myth about entrepreneurs is doer not thinkers whereas the reality is that frequent thinking in planning, creativity, innovation and risk taking is required.

5. As per myth “Business schools have no place in entrepreneurship” but in actual practice most of the successful entrepreneurs have come from engineering courses and business schools.

Essay # 7. Financing of Enterprise:

Finance is the main input of any enterprise. The entrepreneur needs capital to start with, and he also needs financial assistance at every stage of the project. Project finance is required for both short term and long term.

(a) Short-term Finance:

These usually refer to the funds required for a period of less than one year. These are usually required to meet variable, seasonal or temporary working capital requirements. Main sources for short term finance are borrowing from banks, trade credit, installment credit and customer advances.

(b) Medium-term Finance:

Period of one year to five years are regarded as a medium — term. These are generally required for permanent working capital, small expansions, replace­ments, modifications etc. These can be raised by issue of shares and debentures, borrowing from banks and other financial institutions, ploughing back of profits.

(c) Long-term Finance:

Periods more than 5 years are regarded as long-terms. These are required for procuring fixed assets, for substantial expansion, modernisation etc. Important sources of long-term finance are issue of shares and debentures, loans from financial institu­tions and ploughing back of profits.

Sources of Finance:

The sources from which the entrepreneurs can meet their financial needs for their projects are grouped as:

(a) Internal source, and

(b) External source.

In addition, the entrepreneur raises his finance by availing of available subsidies, state aid to industries etc. A judicious mix of funds from these sources should be given priority.

(a) Internal Sources of Finance:

(i) Personal and family savings.

(ii) Loans from L. I.C. and Provident Fund Account.

(iii) Loans against assets like land and property.

(iv) Loans against shares and debentures.

(v) Loans from relatives and friends.

Substantial amount is required by an enterprise to buy machinery and equipment and to purchase land and buildings.

These finances are generally arranged from following sources:

(i) Borrowing from Banks.

(ii) Term-lending from institutions like IDBI; IFCI, Industrial Development Corpora­tions etc.

(iii) From Government and Semi-Government agencies.

(iv) Other sources.

Institutional Finance:

Institutional finance is available for large, medium, small and tiny industries by commer­cial banks. Commercial banks include the State Bank of India group, nationalised banks, pri­vate sector banks and development corporations which have been especially established to pro­vide industrial finance.

In addition, the Reserve Bank of India gives credit guarantees and the ECGC gives export guarantees to the small-scale sector. Industrial Development Bank of India (IDBI), by its refinance operations, plays a significant role in the promotion of the small scale — sector. The National Small Industries Corporation (NSIC) offers financial assistance in the form of its hire-purchase schemes.

Besides, new institutions like mutual funds, lease companies, financial service institutions, investment companies, merchant banks etc. provide financial assistance and financial services to industries.

Essay # 8. Factors Essential for Successful Entrepreneurship:

The following aspects/factors are essential for successful entrepreneurship:

1. Regular inflow of information concerning consumers or buyers, distributors and dealers/retailers, transporters, etc., about raw materials, quality aspects, competitors, government organization and employees.

2. Aspects regarding satisfaction of consumer requirements.

3. Generation of adequate cash flow.

4. Regular objective assessment of the enterprise.

5. Aspects concerning productivity improvement.

6. Quality maintenance.

7. Utilization of upto date technology.

8. To be innovative in view of competition.

9. Keep employees motivated.

10. Proper utilization of scrap or waste material.

11. Proper time management.

Essay # 9. Benefits of Entrepreneurship:

Entrepreneurship has following three benefits for society:

1. Economic Growth:

These provide economic upliftment of society and generate labour employment.

2. Productivity Improvement:

It helped in improving the productivity, which means the ability to produce more goods and services with less labour and other inputs.

3. New technologies, products and services:

It helps in promoting innovative tech­nologies, products and services.

Essay on the Concept of Entrepreneurial Development Programme in India

Entrepreneurship is the key to economic progress of a nation. Development of entrepreneurs leads to rapid industrialization and hence improved well being of a country. Entrepreneurs are therefore called the wealth creators. Traditionally it was believed that entrepreneurial talent is an innate trait which one inherits through his birth.

Image Source: consult-ice. com/cms/wp-content/uploads/2012/12/Entrepreneurship-word-cloud. jpg

Traditional business communities used to enter into the world of business with the requisite skills. But entrepreneurial growth requires focus on human resource development and its proper utilization and motivation for entrepreneurial initiatives.

Innovations in behavioral sciences have enabled us to look into the mental facets and develop, ways to change the attitude, inclination and interest of individuals in the desired direction.

There has been a felt need for concerted and systematic effort to identify, develop, nurture and sustain entrepreneurial talents in the interest of the national development.

Exclusive training based interventions have proved to be beneficial in stimulating, supporting and supporting entrepreneurial initiatives.

Entrepreneurial development programme is a systematic and an organized development of a person to an entrepreneur.

The development of an entrepreneur refers to inculcate the entrepreneurial skills into a common person, providing the needed knowledge, developing the technical, financial, marketing and managerial skills, and building the entrepreneurial attitude.

The concept or entrepreneurial development involves equipping a person with the required information and knowledge used for enterprise building and polishing his entrepreneurial skills.

In these days, entrepreneurial development programmes are treated as an important tool of industrialization and a solution of unemployment problem of India.

The overall aim of an entrepreneurial development programme is to stimulate a person for adopting entrepreneurship as a career and to make him able to identify and exploit the opportunities successfully for new venture.

Definition:

“Identifies intelligence, motivation, knowledge and opportunity as the prerequisites for entrepreneurial development”

“Entrepreneurial development programme may be defined as a programme designed to help an individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his entrepreneurial role effectively.

It is necessary to promote this understanding of motives and their impact on entrepreneurial values and behavior for this purpose”.

“It is an attempt to develop person as entrepreneur through structural training. The main purpose of such entrepreneurial development programme is to widen the base of entrepreneurship by developing achievement motivation and entrepreneurial skills among the less privileged sections of society”.

An entrepreneurship development programme is, thus, based on the belief that individuals can be developed to entrepreneur by changing their outlook through an organized and systematic programme EDP is not merely a training programme. It is a process of:

  • Enhancing the motivation, knowledge and skills of the potential entrepreneurs.
  • Arousing and reforming the entrepreneurial behavior in their day-to-day activities.
  • Assisting them develop their own ventures or enterprise as a sequel to entrepreneurial action.

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Concept of entrepreneurship essay

Concept of entrepreneurship essay

Essay on Entrepreneurship: Concept and Broad Aspects of Entrepreneurship

Essay on Entrepreneurship: Concept and Broad Aspects of Entrepreneurship!

Concept of Entrepreneurship:

Entrepreneurship may be defined as follows:

Entrepreneurship is the process of searching for opportunities for gain through environmental analysis; and exploiting such opportunities by converting them into a profitable business enterprise.

Following are cited some outstanding definitions of entrepreneurship:

(1) “Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity and through the communicative and managements skills to mobilize human, financial and material resources to bring a project to fruition.” —John Kao and Howard Stevenson

(2) “An entrepreneur is an innovator who carries out new combinations to initiate and accelerate the process of economic development.” —Joseph Schumpeter

(3) “An entrepreneur is an agent who unites all factors of production – land, labor, capital etc. and earns profits after making payments for these factors of production.” —J. B. Say

In short, an entrepreneur is a grand personality, assuming the roles of a risk-taker, a resource assembler, an innovator and an organizer – all combined into one.

Broad Aspects of Entrepreneurship:

We propose to the examine at length, certain broad aspects of entrepreneurship, as following:

(a) Generation of Ideas-Role of Creativity and Innovation:

The very first step in entrepreneurship is generation of some idea/ideas; which can be converted into profitable business opportunities. Following are suggested be some good sources, out of which an entrepreneur can steal ideas for initiating new business enterprises.

(i) Market Surveys:

Through market surveys, an entrepreneur may gather ideas for starting a new business venture.

Such surveys may help the entrepreneur to get information on matters, like the following:

1. Demand and supply position of various products

2. Elements of competition existing in various business lines

3. Nature of demand for popular products i. e. whether the demand is relatively elastic or inelastic

4. Likely trends in demand/supply of popular products etc.

The entrepreneur, on the basis of market surveys, can discover what gaps do exist in the supply position of certain products; which he can plan to fill up through his pioneering efforts. In this process of filling supply gaps, the entrepreneur may seek advice and consultations of business leaders, distribution channels, commercial consultants etc.

(ii) Contacts with Prospective Consumers:

Consumer is the foundation of business. By having contacts with some prospective consumers, the entrepreneur can gain useful information about the types of products and services which they want; and which are not available in the market so far. He can get an idea of their tastes, preferences, habits, income etc.; on which bases he (the entrepreneur) can develop his own product idea.

(iii) Projects Reports and Publications:

Project reports of researchers vis-a-vis various industries may provide useful ideas to an entrepreneur to plan which industry he can enter with promising business opportunities. Likewise, governmental publications on trade and industry can be useful to the entrepreneur in discovering business ideas.

However, in finalizing business opportunities on the basis of project reports and publications, the entrepreneur will do well to consult technical, financial and other experts; who could guide the entrepreneur as to the ‘ins’ and ‘outs’ of various business propositions.

(iv) Trade Fairs and Exhibitions:

Trade fairs and exhibitions are a good source of businesses ideas. These give an idea of the diversity of products, the number of competitors in a field, popularity of various products and their manufacturers, reaction of general public’s to products of various manufacturers etc.

(v) Entrepreneur’s Own Creativity:

The most importance source of business ideas is entrepreneur’s own talent of creativity. Creativity is an ability of mind to extract something from an environment which apparently may seem to consist of nothing. Creativity depends on one’s imagination to contemplate new and better ideas, leading to innovations on the part of the entrepreneur. Such innovations may provide seeds to plant the tree of a new business venture.

However, innovation is not the same thing as invention. Invention means producing or designing something which has not existed before; whereas innovation means introduction of new things, new ideas or new ways of doing something which has already been discovered.

Innovation may not only provide business ideas to an entrepreneur; but also enable him to gain a competitive edge for survival and growth in the present-day economy which is globalized and characterized by intensely increasing competitive conditions.

Some examples of innovations may be:

1. Developing new and unique products on the basis of the inferiority of existing products in the market i. e. capitalizing on the inferiority of existing products and coming out with own superior products.

2. Exploiting some unexploited natural resource, for entrepreneur’s own product

3. Utilize unused supply of raw material for manufacturing a new product

4. Taking advantage of incentives offered by government for the development of certain regions/certain lines of business

5. Getting clues from developments in other nations vis-a-vis consumption behaviours and patterns likely to enter developing economies due to demonstration effect

6. Recycling waste materials and turning them into useful products

7. Converting own hobby into business venture. For example, hobbies like interior decoration; fashion designing may be developed as profitable business ventures.

While generating business ideas, the entrepreneur must keep the following two considerations in mind:

(I) Ideas must match with entrepreneur’s own skills, resources and managerial competence

(II) Ideas must not be inconsistent with governmental regulations and business policies.

(b) Feasibility Study and Feasibility Report:

After discovering or creating certain ideas for basing a business venture on it; a very practical, crucial and significant step for the entrepreneur is to conduct a feasibility study of the proposed business idea i. e. examine the viability of the idea, from the following perspectives:

(III) Financial, and

Following is an account of the feasibility study of the proposed business idea from the above suggested perspectives:

(I) Technical Perspective:

Technical feasibility of the idea is judged in terms, like the following:

1. What is the most appropriate technology required for the particular business project; including contractual aspects of technology licensing?

2. What type of plant and equipment are available for being operated according to the selected technology?

3. What is the most economical technological size of the plant; and whether that size is practicable in view of demand constraints for the product to be turned out by the plant?

4. Whether necessary inputs – raw-materials, power, water, gas etc. are available for operating the plant, according to the selected technology?

5. Whether necessary manpower (managers, workers etc.) are available – quantitatively and qualitatively – for operating plant, according to technology?

6. What facilities are available for treatment and disposal of effluents without causing harm to the environment? Etc.

(II) Commercial Perspective:

To judge the commercial viability of the proposed business idea, the entrepreneur may be well advised to consider the following:

1. Manufacturing cost of production, for a period ranging from 5 to 10 years.

2. Existing demand for the product; and the demand potential in future.

3. Element of competition, telling upon demand prospects

4. Industry forecasts – future outlook and trends etc.

(III) Financial Perspective:

Financial viability of the proposed business idea may be judged from the following perspectives:

1. Estimated capital cost of project; with projection of cash flows, during the construction and operational period of the project

2. Working capital requirements

3. Modes of financing, based on debt equity ratio and other financial norms

4. Investment-profitability analysis based on methods like play back period, simple rate of return, net present value (NPV), internal rate of return (IRR) etc.

(IV) Social Perspective:

In case of private sector projects, evaluation is done in technical, commercial and financial terms. However, it is desirable to judge the proposed business idea, from the social perspective also.

To judge the project from social perspective, the following considerations must be kept in view:

1. Generation of employment, by the project

2. Foreign exchange earnings, by the project

3. Improvement in the quality of life, as a result of the product/service, produced/generated by the business project, etc.

Feasibility Report – a Specimen:

After conducting the feasibility study of the proposed business idea, the findings are presented in the form of a report known as the feasibility report or the project report. This report provides a basis for investment decision in a business project. It is equally needed to get sanction of the project from government, financial institutions etc.

A specimen of the feasibility report is given below:

Feasibility Report (Project Report):

Product name, chemistry of the product, specifications, applications and uses of the product etc.

(II) Technical Feasibility:

1. Technology required

2. Technical processes involved

3. Plant and machinery – specifications and capacity

4. Position of raw materials, power, fuel, gas, water and other inputs

5. Man-power requirements (managerial and operative), to operate plant.

6. Arrangements for disposal of effluents etc.

(III) Commercial Feasibility:

1. Manufacturing cost, for few years

2. Demand – existing and potential, for few years.

3. Competitive elements – existing and potential

4. Industry forecasts etc.

(IV) Financial Feasibility:

1. Cost of project

2. Working capital requirements

3. Modes of financing

4. Investment-profitability analysis

5. Break-even analysis

6. Projected Income Statements and Balance Sheets, for some 5 years or so. etc.

Contribution of project towards:

1. Employment generation

1. Foreign exchange earnings

2. Improvement in standard of living of people etc.

(i) Entrepreneur’s own recommendations

(ii) Copies of correspondence with technical, legal, financial, commercial experts

(iii) Reports of experts

(iv) Research data – collected and utilized etc.

(c) Preparation of a Business Plans:

After the feasibility report is approved and accepted by government, financial institutions etc.; the next step for the entrepreneur would be to prepare a business plan, which, when put to implementation, would result in the emergence of a business venture.

Such a plan is significant, as:

1. It provides guidance to the entrepreneur in organizing his work.

2. It is required by suppliers, with whom the entrepreneur is likely to finalize contracts for various purposes.

The entrepreneur prepares the business plan in consultation with technicians, engineers, architects, accountants, financial experts, marketing, experts etc.

Following is suggested the specimen of a business plan:

Specimen of a Business Plan:

(a) Constitutional Plan (Including Legal Plan):

(i) Form of ownership organisation i. e. sole proprietorship, partnership, private company or public company.

(ii) Agreement for foreign collaboration, if any

(iii) Agreement with partners

(iv) List of and agreements with signatories to the Memorandum of Association

(v) Plan for registration of company etc.

(b) Structural Plan: (Managerial Aspects):

(i) Type of organisation – line and staff, project, matrix etc.

(ii) Span of management and number of organizational levels.

(iii) System and channels of communication

(iv) Broad systems of controlling

(v) Authority-responsibility relationships etc.

(i) Location of plant – region and site

(ii) Requirements of plant and machinery for preselected technology.

(iii) Plant capacity utilization

(iv) Scheme of plant layout

(v) Agreements with engineers, contractors, architects etc.

(i) Comprehensive production budget with sub-budgets of raw-materials, labour, overheads etc.

(ii) Quality control system

(iii) Arrangements for disposal of effluents

(iv) Inventory control devices

(v) Agreements with suppliers of raw-materials etc.

(i) Source of finance for fixed capital and working capital

(ii) Broad scheme of capital structure

(iii) Cash budget

(iv) Schemes for ensuring financial control/financial discipline

(v) Agreements with banks, financial institutions, underwriters etc.

(f) Personnel Plan:

(i) Manpower planning for managerial personnel and operatives – quantitatively and qualitatively

(ii) Sources of recruitment

(iii) Procedures for selection, placement

(iv) Training programmes for operatives

(v) System of personnel compensation

(vi) Agreements with key managerial personnel etc.

(g) Marketing Plan:

(i) Composition of marketing mix

(ii) Organisation of marketing research department

(iii) Selection of advertising media; and determination of other sales promotional devices

(iv) Broad pricing strategies

(v) Agreements with distribution channels etc.

Essay on Entrepreneurship: Top 9 Essays | Business Management

Here is a compilation of essays on ‘Entrepreneurship’ for class 11 and 12. Find paragraphs, long and short essays on ‘Entrepreneurship’ especially written for school and college students.

Essay on Entrepreneurship

Essay Contents:

  1. Essay on the Introduction to Entrepreneurship
  2. Essay on the Definition of Entrepreneurship
  3. Essay on the Growth and Success of Entrepreneurship
  4. Essay on Entrepreneurial v/s Managerial Styles
  5. Essay on Entrepreneurial Development
  6. Essay on the Beliefs Regarding Entrepreneurship
  7. Essay on Financing of Enterprise
  8. Essay on the Factors Essential for Successful Entrepreneurship
  9. Essay on the Benefits of Entrepreneurship

Essay # 1. Introduction to Entrepreneurship:

Entrepreneurship is the name given to the factor of production which performs the functions of Enterprise. In economics, Land, Labour, Capital, Organisation and Enterprise are the five factors which are thought to be the basis of all the production activities.

Entrepreneurship in a broader sense can be considered as a process of action undertaken by an entrepreneur (Person) to establish his enterprise. It is a creative and innovative response to the environment.

Entrepreneurship can be described as a creative and innovative response to the environment. Such responses may take place in any field of social endeavour may be business, agriculture, social work and education etc.

For the entrepreneur it is important to have knowledge about the economic and political environment, more particularly about the economic policies of the government and the financial as well as commercial institutions.

Thus a simple definition of entrepreneurship is doing new things or doing things which are already being done in a new way.

According to Dr. J. E. Stepenek, “Entrepreneurship” is the capacity to take risk; ability to organise and desire to diversify and make innovations in the enterprise.

According to Higgins, Entrepreneurship is meant for the function of seeing investment and production opportunity, organising in enterprise to undertake a new production process, raising capital, hiring labour, arranging the supply of raw materials, finding site, introducing new techniques and commodities, discovering new sources of raw materials and selecting top managers for day to day operation of the enterprise.

It may be concluded that entrepreneurship is a composite skill, the resultant of many qualities and traits. These include, imagination ready to take risk, ability to bring together and utilize other factors of production such as capital, land and labour along with intangible factors such as capability to mobilise scientific and technological developments.

Entrepreneurship thus involves taking risk and making essential investments under conditions of uncertainty. At the same time it is connected with innovation, planning and taking decisions so as to increase productivity in industry, business and agriculture etc. It thus plays a key role in the process of economic development.

Essay # 2. Definition of Entrepreneurship:

Entrepreneurship is a pro­cess of action an entrepreneur undertakes to establish his enter­prise. Entrepreneurship is a re­sultant mix of many qualities and traits of an entrepreneur.

Entrepreneurship can be de­fined as a process undertaken by entrepreneur to augment his business interests. It is an exer­cise involving innovation and creativity that will go towards establishing his/her enterprise.

Entrepreneurship is the inclination of mind to take calculated risks with confidence to achieve a predetermined business or industrial objectives.

Essay # 3. Growth and Success of Entrepreneurship:

Entrepreneurship has opened avenues of great scope in the Indian economy. Our national economy is most suited to the growth of small business enterprise. Small business units offer a more convenient means of nurturing and developing entrepreneurship by providing the means of entry into business for new entrepreneurship talents. Small-scale industries are labour-in­tensive and can play an important role in solving the problem of unemployment.

Success of Entrepreneurship:

Following aspects are necessary for the successful entrepreneurship:

1. Regular inflow of information related to buyers, consumers, distributors, dealers, retailers, transporters etc., about raw material, quality aspects, government organisations, employees and competitors.

2. Satisfying the needs of customers.

3. Generation of adequate cash flow.

4. Regular objective assessment of the enterprise.

5. Improving productivity.

6. Maintenance of quality.

7. Use of technology of the time.

8. Be innovative.

9. Keep employees motivated.

10. Scrap or waste material be utilised properly.

11. Time management.

Essay # 4. Entrepreneurial v/s Managerial Styles:

An entrepreneur is a person who is motivated to satisfy a high need for achievement in innovative and creative activities. This creative behaviour and innovative spirit forms a process of an endless chain and is termed as entrepreneurship. An entrepreneur is also required to manage his business. He has to perform both entrepreneurial and managerial func­tions. After the start of the business he becomes more as manager.

Manager is one who specialises in the work of planning, organising, leading and controlling the efforts of others. He does it through systematic use of his classified knowledge and principles. He should have an insight of job requirement, which he should continuously update.

An entrepreneur must adopt the style of professional management. He must organise mana­gerial functions by setting long term objectives, formulating strategic policies, developing man­agement information system, monitoring and evaluation systems. He is required to possess management knowledge related to technical, economical, financial, human and administrative aspects.

There is a vast difference between owner-manager and professional-manager. The owner — manager is identified with individuality, flair, strong motivation to achieve success and pros­per, while the professional-manager is concerned with the planning, organising, motivating and controlling. Owner-manager builds the organisation, assumes all business risks, and also loses his reputation and prestige in the event of failure of business, whereas professional-manager is not exposed to such risks.

Thus entrepreneurship is a process of combining resources to produce new goods or services and reappears to initiate another change. Entrepreneurs are also required to play other roles, especially those of capitalist and manager. Managerial function of an entrepreneur is a continu­ous process of combining the factors related to production.

Essay # 5. Entrepreneurial Development:

For the economic development, entrepreneurial development is necessary. For the purpose of entrepreneurial development, rapid growth of small scale sector is necessary. Entrepreneur­ial development programmes are designed to help a person in strengthening his entrepreneur­ial motive and in acquiring skills and capabilities necessary for playing his role effectively.

Main objective of the entrepreneurial development programme is to motivate and assist pro­spective and potential entrepreneurs to set up small scale units of their own and thus become self-employed and contribute significantly to production and employment in the country.

Entrepreneurial development programme must be designed properly and should incorpo­rate the following:

(i) Developing, achievement, motivation and sharpening entrepreneurial traits and behaviour.

(ii) Project planning and development, and guidance on industrial opportunities, incen­tives and facilities, rules and regulations.

(iii) Developing managerial and operational capabilities.

Keeping the target group and target area in view various strategies and approaches are adopted. The process of entrepreneurial development is designed very carefully and starts from identifying the potential and right candidates, linking suitable project with each one, and then training and developing the managerial and entrepreneurial capabilities, counseling and motivating them, and then providing the required follow-up support to help them in establishing their venture.

Objectives:

Objectives of entrepreneurial development programme are to help to:

(i) Develop and strengthen their entrepreneurial quality.

(ii) Analyse environment related to small business and small industry.

(iii) Select product and its project.

(iv) Formulate projects.

(v) Understand the procedure for setting up of small enterprise.

(vi) Support needed for launching the enterprise.

(vii) Acquire basic management skills.

(viii) Appreciate the social responsibilities.

(ix) Let him set the objectives of his business.

(x) Prepare him to accept risks.

(xi) Take strategic decisions.

(xii) Develop communicating skills.

Training for Entrepreneur:

Proper training is essential for the success of any industry in production techniques, man­agement, marketing and other aspects.

Small Industries Service Institutes and their Extension Centres are organising trainings:

(i) To improve technical skills of workers,

(ii) For acquainting the entrepreneurs with advanced production and management techniques.

The courses for workers are organised in the following areas:

(a) Shop practice courses such as machine shop practice, tool room practice, foundry, blacksmithy, electrical shop practice etc.

(b) Trade oriented courses, such as tool making, fitter, sheet metal, pattern making, carpentry etc.

(c) Process oriented courses, such as welding, heat treatment, electroplating, leather works etc.

(d) Product oriented courses, sport goods, foot wear, paint, varnish making etc.

Training programmes for entrepreneurs are of two types namely:

(i) For graduate and di­ploma holder engineers, physics and chemistry graduates and

(ii) For rural artisans, educated unemployed, ex-servicemen, weaker sections of the society, women entrepreneurs etc. with special courses for each of the categories of persons.

For providing training and upgradation of technology and managerial skills, specialised institutions have been set up.

For conducting entrepreneurship development programmes, the lead was given by Small Industries Development Organisation through its small industries service centres. Entrepreneurship Development Institute of India (EDII) was established in 1983 at Ahmedabad as a resource organisation at the national level for the purpose of creating the institutional infra­structure for entrepreneurship development.

National Institute for Entrepreneurship and Small Business Development (NIES BHD) was established by the central Government at New Delhi, with the objective of coordinating activities related to entrepreneurship and small business development.

In addition, institutions established by the Government are:

(i) Rural Entrepreneurship Development Institute (RED) at Ranchi.

(ii) Rural Management and Management Centres (RMEDC) at Maharashtra.

Other organisational actively conducting entrepreneurship development programmes are:

(i) State Bank of India

(iii) Centre for Entrepreneurship Development at Ahmedabad and Hubli.

(iv) State financial corporations.

(v) Industrial consultancy organisations in various states.

(vi) Small Industries Extension Training Institute, Hyderabad.

(vii) Institute of Entrepreneurship Development (IEDs) in Uttar Pradesh, Bihar and Orissa.

(viii) Management Development Institute (MDI) at Gurgaon (Haryana) near Delhi.

Some of the other institutions for entrepreneurial development are:

1. Central Institute of Tool Design, Hyderabad.

2. Central Tool Room and Training Centre, Calcutta.

3. NI SIET, Guwahati.

4. Institute for Design of Electrical Measuring Instruments, Bombay.

5. Electronic Service and Training Centre, Ramnagar.

6. Process-cum-Product Development Centre for Glass and Ceramic Industry, Ranchi.

7. Process and Product Development Centre, Agra.

8. Process and Product Development Centre, Meerut.

9. Central Institute of Hand Tools, Jalandhar.

10. Hand Tool Design Development and Training Centre, Nagpur.

11. New Indo-Danish Tool Rooms, Jamshedpur and Bhubaneswar.

12. Ino-German Tool Rooms-Indore, Ahmedabad and Aurangabad.

13. National Institute for Entrepreneurship & Small Business Development, New Delhi.

14. National Institute of Design, Ahmedabad.

15. Centre for the Improvement of Glass Industry, Firozabad.

16. National Council for Cement and Building Materials, Delhi, Ballabgarh, Hyderabad, Patna and Madras.

17. Indian Plywood Industries Research Institute, Bangalore.

18. Central Pulp and Paper Research Institute, Saharanpur.

19. National Federation of Industrial Cooperatives Limited, New Delhi.

20. Central Machine Tool Institute, Bangalore.

Essay # 6. Beliefs Regarding Entrepreneurship:

According to literature there are many myths about entrepreneurship:

But myths and realities about its are different as follows:

1. Myth about entrepreneurs is that they are born not made but “reality” is that entrepreneur characteristics and traits may be acquired through properly structured learning.

2. Myth regarding entrepreneurs is that all required is money but generally it is observed that excessive and surplus money reduces the risk taking opportunities, scarce for care resources and grasp for opportunities.

3. Myth regarding entrepreneurship is that it is profile of traits and characteristics but practically it is a combination of situational issues.

4. Myth about entrepreneurs is doer not thinkers whereas the reality is that frequent thinking in planning, creativity, innovation and risk taking is required.

5. As per myth “Business schools have no place in entrepreneurship” but in actual practice most of the successful entrepreneurs have come from engineering courses and business schools.

Essay # 7. Financing of Enterprise:

Finance is the main input of any enterprise. The entrepreneur needs capital to start with, and he also needs financial assistance at every stage of the project. Project finance is required for both short term and long term.

(a) Short-term Finance:

These usually refer to the funds required for a period of less than one year. These are usually required to meet variable, seasonal or temporary working capital requirements. Main sources for short term finance are borrowing from banks, trade credit, installment credit and customer advances.

(b) Medium-term Finance:

Period of one year to five years are regarded as a medium — term. These are generally required for permanent working capital, small expansions, replace­ments, modifications etc. These can be raised by issue of shares and debentures, borrowing from banks and other financial institutions, ploughing back of profits.

(c) Long-term Finance:

Periods more than 5 years are regarded as long-terms. These are required for procuring fixed assets, for substantial expansion, modernisation etc. Important sources of long-term finance are issue of shares and debentures, loans from financial institu­tions and ploughing back of profits.

Sources of Finance:

The sources from which the entrepreneurs can meet their financial needs for their projects are grouped as:

(a) Internal source, and

(b) External source.

In addition, the entrepreneur raises his finance by availing of available subsidies, state aid to industries etc. A judicious mix of funds from these sources should be given priority.

(a) Internal Sources of Finance:

(i) Personal and family savings.

(ii) Loans from L. I.C. and Provident Fund Account.

(iii) Loans against assets like land and property.

(iv) Loans against shares and debentures.

(v) Loans from relatives and friends.

Substantial amount is required by an enterprise to buy machinery and equipment and to purchase land and buildings.

These finances are generally arranged from following sources:

(i) Borrowing from Banks.

(ii) Term-lending from institutions like IDBI; IFCI, Industrial Development Corpora­tions etc.

(iii) From Government and Semi-Government agencies.

(iv) Other sources.

Institutional Finance:

Institutional finance is available for large, medium, small and tiny industries by commer­cial banks. Commercial banks include the State Bank of India group, nationalised banks, pri­vate sector banks and development corporations which have been especially established to pro­vide industrial finance.

In addition, the Reserve Bank of India gives credit guarantees and the ECGC gives export guarantees to the small-scale sector. Industrial Development Bank of India (IDBI), by its refinance operations, plays a significant role in the promotion of the small scale — sector. The National Small Industries Corporation (NSIC) offers financial assistance in the form of its hire-purchase schemes.

Besides, new institutions like mutual funds, lease companies, financial service institutions, investment companies, merchant banks etc. provide financial assistance and financial services to industries.

Essay # 8. Factors Essential for Successful Entrepreneurship:

The following aspects/factors are essential for successful entrepreneurship:

1. Regular inflow of information concerning consumers or buyers, distributors and dealers/retailers, transporters, etc., about raw materials, quality aspects, competitors, government organization and employees.

2. Aspects regarding satisfaction of consumer requirements.

3. Generation of adequate cash flow.

4. Regular objective assessment of the enterprise.

5. Aspects concerning productivity improvement.

6. Quality maintenance.

7. Utilization of upto date technology.

8. To be innovative in view of competition.

9. Keep employees motivated.

10. Proper utilization of scrap or waste material.

11. Proper time management.

Essay # 9. Benefits of Entrepreneurship:

Entrepreneurship has following three benefits for society:

1. Economic Growth:

These provide economic upliftment of society and generate labour employment.

2. Productivity Improvement:

It helped in improving the productivity, which means the ability to produce more goods and services with less labour and other inputs.

3. New technologies, products and services:

It helps in promoting innovative tech­nologies, products and services.

Essay on the Concept of Entrepreneurial Development Programme in India

Entrepreneurship is the key to economic progress of a nation. Development of entrepreneurs leads to rapid industrialization and hence improved well being of a country. Entrepreneurs are therefore called the wealth creators. Traditionally it was believed that entrepreneurial talent is an innate trait which one inherits through his birth.

Image Source: consult-ice. com/cms/wp-content/uploads/2012/12/Entrepreneurship-word-cloud. jpg

Traditional business communities used to enter into the world of business with the requisite skills. But entrepreneurial growth requires focus on human resource development and its proper utilization and motivation for entrepreneurial initiatives.

Innovations in behavioral sciences have enabled us to look into the mental facets and develop, ways to change the attitude, inclination and interest of individuals in the desired direction.

There has been a felt need for concerted and systematic effort to identify, develop, nurture and sustain entrepreneurial talents in the interest of the national development.

Exclusive training based interventions have proved to be beneficial in stimulating, supporting and supporting entrepreneurial initiatives.

Entrepreneurial development programme is a systematic and an organized development of a person to an entrepreneur.

The development of an entrepreneur refers to inculcate the entrepreneurial skills into a common person, providing the needed knowledge, developing the technical, financial, marketing and managerial skills, and building the entrepreneurial attitude.

The concept or entrepreneurial development involves equipping a person with the required information and knowledge used for enterprise building and polishing his entrepreneurial skills.

In these days, entrepreneurial development programmes are treated as an important tool of industrialization and a solution of unemployment problem of India.

The overall aim of an entrepreneurial development programme is to stimulate a person for adopting entrepreneurship as a career and to make him able to identify and exploit the opportunities successfully for new venture.

Definition:

“Identifies intelligence, motivation, knowledge and opportunity as the prerequisites for entrepreneurial development”

“Entrepreneurial development programme may be defined as a programme designed to help an individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his entrepreneurial role effectively.

It is necessary to promote this understanding of motives and their impact on entrepreneurial values and behavior for this purpose”.

“It is an attempt to develop person as entrepreneur through structural training. The main purpose of such entrepreneurial development programme is to widen the base of entrepreneurship by developing achievement motivation and entrepreneurial skills among the less privileged sections of society”.

An entrepreneurship development programme is, thus, based on the belief that individuals can be developed to entrepreneur by changing their outlook through an organized and systematic programme EDP is not merely a training programme. It is a process of:

  • Enhancing the motivation, knowledge and skills of the potential entrepreneurs.
  • Arousing and reforming the entrepreneurial behavior in their day-to-day activities.
  • Assisting them develop their own ventures or enterprise as a sequel to entrepreneurial action.

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