Revision Notes for Class 10 IT (402) – Chapter 4 Entrepreneurial Skills II

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Entrepreneur

The word ‘entrepreneur’ is derived from the French word ‘entrepreneur’ which means to undertake. An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards.

A person who sets up a business or businesses, taking on financial risks in the hope of profit.
OR
A promoter in the entertainment industry.
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An entrepreneur is a person who sets up a business with the aim to make a profit.
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Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs.
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An entrepreneur is the person who sees a problem in the world and immediately focuses on creating the solution. They’re the leaders that strike out on their own to improve society. Whether they’re creating jobs or a new product, they constantly take action to ensure world progress.

Revision Notes Entrepreneur Skills

There are many skills required to start a business. The most popular entrepreneur skills are marketing, business development, customer service, leadership, execution, resilience, focus, determination, talent acquisition, continuous learner.

Entrepreneurship and Society

• Entrepreneurship: The meaning of entrepreneurship involves an entrepreneur who takes action to make a change in the world. Whether startup entrepreneurs solve a problem that many struggle with each day, bring people together in a way no one has before, or build something revolutionary that advances society, they all have one thing in common: action.
  It’s not some idea that’s stuck in your head. Entrepreneurs take the idea and execute it. Entrepreneurship is about execution of ideas.
• Society: Society can be described as an aggregate of people living together in a community or basically a situation of being in the company of others. The persons that comprise a population associate for various engagements including business.

Qualities/ Characteristics of a Good Entrepreneur:

The major qualities/characteristics of a good entrepreneur are linked below:

• Leadership: An entrepreneur must possess the characteristics of leadership and must lead a team for achievement of goals. The leader is able to clearly articulate their ideas and has a clear vision. An entrepreneurial leader realises the importance of initiative and reactiveness and they go out of their way to provide a support to the team.
• Risk Taking: An entrepreneur with rational planning and firm decisions bear the risks. They have differentiated approach towards risks. Good entrepreneurs are always ready to invest their time and money but they always have a back up for every risk they take.
• Innovativeness: With the changing needs and requirements of customers production should meet requirements with the help of innovative ideas. An entrepreneurial venture does not have to restrict itself to just one innovation or even one type of innovation. Success can be built on combination of innovation. For example, a new product delivered in a new way with a new message.
• Goal-oriented: Goal-oriented entrepreneurs achieve the maximum results from their efforts in business due to the fact they work towards clear and measurable targets.
• Decision-maker: An entrepreneur has to take many decisions to put his business idea into reality. He chooses the best suitable and profitable alternative.
• Highly Optimistic: A successful entrepreneur is always optimistic and the present problems does not matter to them. He is always hopeful that the situation will became favourable for business in future.
• Motivator: An entrepreneur has to create a spirit of team work and motivate them. So that he gets full cooperation from the employees.
• Self-confident: An entrepreneur should have confidence to achieve his goals otherwise he won’t be able to convince his team to achieve his goals.
• Action-oriented: An entrepreneur should have an action oriented vision and ideology to plan things well.
• Dynamic Agent: An entrepreneur creates new needs and new means to satisfy them. He has the ability to visualise new ventures and new plans.
• High Achiever: An entrepreneurs are high achievers as they have a strong urge to achieve. The most important characteristic is his achievement motivation.
• Trust in Self: An entrepreneur believes on their own decisions and actions as he has trust in his perseverance and creations. He does not believe in luck.

Entrepreneurship and Economy

• Entrepreneurship plays an influential role in the economic growth and standard of living of the country. As a startup founder or small business owner, you may think that you are simply working hard to build your own business and provide for yourself and your family. But you are actually doing a whole lot more for your local community, state, region, and the country as a whole.
• An entrepreneur is the builder of economic growth. He promotes the prosperity of a country by his initiative and skill for innovation and dynamic leadership. He creates wealth, opens up employment opportunities and fosters the other segments of economic system.

The role and significance of an entrepreneur are given under the following headings:

• Organiser of Society’s Productive Resources: An entrepreneur is the organiser of society’s productive resources. He is the person who assembles the unused natural, physical and human resources of the society, combines them properly, establishes effective coordination between them and makes the economic activities dynamic.
  • Helpful in Capital Formation: An entrepreneur is helpful in capital formation as we know that increase in the rate of capital formation is quite essential for the economic development of any country. Those nations which are not able to increase the rate of capital formation or does it nominally remain backward from industrial development’s point of view.
  • Increase in Employment Opportunities: An entrepreneur creates maximum employment
    opportunities in the society by way of establishing new industries, developing and expanding the existing industries and by undertaking innovative activities.
  • Development of New Production Techniques: An entrepreneur does not feel contended only with the existing techniques of production. Hence, he carries out various experiments for saving time, labour and capital in the production, as also to improve the variety and quality of the product and service.
  • Visionary Leader: An entrepreneur has a good vision towards the achievement of his goals. He is able to recognise profitable opportunities and conceptualise strategies.
  • Contribution of the Execution of Government Policies: An entrepreneur provide an important contribution in implementing government policies and achieving the national goals. An entrepreneurs cooperate with the government for implementations of development plans of the country.
  • Higher Productivity: Entrepreneur have the ability to produce more goods and services with less inputs. They play an important role in raising productivity.
  • Initiator: An entrepreneur is the one who initiates the process of creating an enterprise by coming up with the idea for the business and planning out how to turn that idea into reality.
  • Backbone of Capitalist System: Capitalist economy is one in which there is a freedom to save and invest to compete and operate any business. An entrepreneur plays a vital and prominent role in the enterprise because he controls market by assuming the role of a competitor and a leader.
  • Ingredient of Modern Production System: An entrepreneur has become the ‘balancing wheel’ of modern global economy. They seek the unique product, change the technical frontiers and reshape public desires. Today, entrepreneurs act as an ingredient of modem production system as they create wealth and employment.

Myths of Entrepreneurship

Entrepreneurship is a set of activities performed by the entrepreneur. It is the process of identifying opportunities in the market place. It is the attempt to create value. Many entrepreneurs believe a set of myths about entrepreneurship and the most common are as follows:

• Starting a Business is Easy: In reality, it is a very difficult and challenging process to start a successful business. The rate of failure of new ventures is very high but small entrepreneurship are comparatively easier to start.
• Lot of Money to Finance New Business: Successful entrepreneurs design their business with little cash also.
• Startups cannot be Financed: Under the schemes like MUDRA, entrepreneurs can raise loans from banks.
• Talent is more Important than Industry: This is not true as the nature of industry an entrepreneur chooses greatly effects the success and growth of the business.
• Most Startups are Successful: Mostly in the developing countries startups fail as they could not manage to earn high profits.

Advantages of Entrepreneurship

The main advantages of adopting entrepreneurship as a career are discussed below:

• Independence: An entrepreneur is himself a boss or owner and he can take all the decisions independently.
• Exciting: Entrepreneurship can be very exciting with many entrepreneurs considering their ventures highly enjoyable. Everyday will be filled with new opportunities to challenge your determination, skills and abilities.
• Wealth Creation: The principal focus of entrepreneurship is wealth creation and improved livelihood by means of making available goods and services. Entrepreneurial venture generates new wealth, new and improved products, services or technology form entrepreneurs, enable new markets to be developed and new wealth to be created.
• Flexibility: As an entrepreneur you can schedule your work hours around other commitments, including quality time you would spend with your family.
• Status: Success in entrepreneurship beings a considerable fame and prestige within the society.
• Ambition Fulfilment: Through entrepreneurship one can fulfil his ambitions into original products or services.

Disadvantages of Entrepreneurship

Some of the disadvantages of entrepreneurship as a career are discussed below:

• Huge Amount of Time: You have to dedicate a huge amount of time to your own business. Entrepreneurship is not easy and for it to be successful, you have to take a level of time commitment.
• Risk: An entrepreneurship involves high risk of loss. If the business fails then it will wipe away all the personal savings.
• Hard Work: An entrepreneur has to work very hard to make the new business very successful.
• Uncertain Income: There is no regular or fixed income available to an entrepreneur. So, there is uncertain kind of income received by an entrepreneur.
• Incompetent Staff: A new entrepreneur may not be able to hire qualified and experienced staff so there are chances of incompetency by the staff due to lack of experience and knowledge.

Entrepreneurship as a Career Option

A career is a line of work that a person takes for life. There are two ways a person can earn a living. They are

1. self-employment
2.  wage employment

For example: a doctor who works for a hospital is a wage employed person. If the same doctor has their own clinic, he or she is a self-employed person.

• A self-employed person running a business to satisfy a need by trying new ideas is an entrepreneur.
• A person who becomes an entrepreneur goes through a career process. This process is as follows: