~/Entrepreneurial Skills – IV

Introduction — Why Entrepreneurship?

Entrepreneurs identify an innovation, seize an opportunity, mobilise funds, raise capital and take calculated risks to open a market or new business for products, processes and services.

Training in entrepreneurship development needs to include: (a) entrepreneurship orientation and awareness, (b) development of competencies (knowledge, skills, attitudes) to recognise a market opportunity and organise resources, and (c) improvement of business performance for growth and competitiveness.

Support from the Government of India

The National Institute for Entrepreneurship and Small Business Development (NIESBUD) — under the Ministry of Skill Development and Entrepreneurship — promotes entrepreneurship through training of trainers, management development, entrepreneurship-cum-skill development and cluster intervention programmes.

1.1 What Is Entrepreneurship?

The word "entrepreneur" is derived from the French word entreprendre, which means "to undertake".

Definitions by Different Thinkers

• Cole: "A purposeful activity to initiate, maintain and aggrandise profit-oriented business."
• Stevenson & Jarillo: "The process by which individuals pursue opportunities without regard to the resources they currently control."
• Economists: An entrepreneur brings in resources, labour, material and other assets into profit-making combinations.
• Psychologists: A person driven by a psychological force — a desire to obtain or attain something.
• Sociologists: A person whose actions determine social status and contribute to societal development.
• Management Gurus: A person who has a vision and generates an action plan to achieve it.

1.2 Characteristics of Entrepreneurship

• It is an economic activity done to create, develop and maintain a profit-oriented organisation.
• It begins with identifying an opportunity — a potential to sell and make profit in the market.
• It deals with the optimisation of resources.
• It is the ability of an enterprise and an entrepreneur to take risks.

1.3 Entrepreneurship — Art and Science

Entrepreneurship is considered to be both an art and a science:

• A science has stepwise progression with valid proof (like chemistry or physics) — specific steps → specific results.
• An art has no specific way to attain a result — the skill of the artist is prime (like music).
• Entrepreneurship needs the progression and procedures of a science and the skill to digress when required — yet keep the activity profitable and growth-oriented.

1.4 Qualities of a Successful Entrepreneur — 7 Qualities

(a) Initiative

An entrepreneur must initiate action and take advantage of opportunities. Once a person misses an opportunity, it may not come again.

(b) Willingness to Take Risks

Every business involves risk — an entrepreneur volunteers to take risks to run and grow a business successfully.

(c) Ability to Learn from Experience

Entrepreneurs do make mistakes. Errors must not be repeated, because that may cause heavy losses.

(d) Motivation

A motivated person does not rest until a task is completed — essential for success in every walk of life.

(e) Self-Confidence

Reflected in courage, enthusiasm and the ability to lead. Without confidence, one cannot inspire others to work.

(f) Hard Work

There is no substitute for hard work. An entrepreneur cannot say "the office hours are over and I will not work any longer" — sometimes they may even have to work the whole night.

(g) Decision-Making Ability

Things move fast — an entrepreneur must make suitable and timely decisions. Otherwise they may miss an opportunity and incur losses.

1.5 Types of Entrepreneurs

1.6 Roles and Functions of an Entrepreneur — 7 Functions

1. Identifying entrepreneurial opportunity — spot human needs (food, fashion, education) before others do; requires imagination, creativity and innovativeness.
2. Turning ideas into action — collect information on ideas, products and practices to meet market demand.
3. Feasibility study — assess market feasibility; anticipate problems, costs, inputs → create the business plan / project report.
4. Resourcing — arrange money, machine, raw material and workforce on time.
5. Setting up an enterprise — legal formalities, location, premises, machinery installation.
6. Managing the enterprise — workforce, material, finance, production, marketing, appropriate returns.
7. Growth and development — after initial goals are met, explore higher goals and strive for excellence.

1.7 What Motivates an Entrepreneur?

• Standard of Excellence — an entrepreneur sets high standards and strives to attain them.
• Uniqueness — to remain unique in everything the person does.
• Focus on Long-Term Goals — plans patiently for what is distant in time.
• Need to Influence — perceives one's ideas as revolutionary and expects them to impact the world.

1.8 Wage Employment vs Entrepreneurship

1.9 Identifying Opportunities and Risk-Taking

• Community concerns — look at issues concerning your community; starting locally can reap huge benefits.
• Personal experiences — many world-changing ideas come from challenges an entrepreneur faces in life.
• Research with others — speak to like-minded people, join local startup groups; discussion opens doors.

1.10 Startups

• Can be started with minimum investment, often in technology, healthcare, food, virtual reality, food delivery, etc.
• Rely on capital from angel investors or venture capital firms, whereas small businesses use loans and grants.
• Often seek guidance / mentoring from experts — join local and global groups.

Startup India

Startup India — a flagship initiative of the Government of India to build an ecosystem for startup growth. Under the scheme, new startups get regulatory and tax benefits, capital-gain exemption and access to government funding (if criteria are met). Website: startupindia.in.

1.11 Barriers to Becoming an Entrepreneur

A business venture is like a hurdle race — it involves risks (danger). The "hurdles" are called barriers. Common barriers are:

1. Environmental Barriers

• Lack of adequate resources or raw material.
• Non-availability of skilled labour.
• Lack of requisite machinery and other infrastructure.
• Unavailability of monetary resources on time.

These can be overcome by studying the market, conducting research / surveys, and mentor guidance.

Government Schemes to Help Small Entrepreneurs

• Government Mudra Yojana — mudra.org.in.
• Credit Guarantee Scheme — cgtmse.in.
• Stand-Up India Scheme — standupmitra.in.

2. No or Faulty Business Plan

"A goal without a plan is just a wish." Without an action plan, the venture becomes chaotic. A plan pushes everyone to work harder in a defined direction.

3. Personal Barriers

How long will the business last? How much profit? Will customers like the product? Such questions cause fear. Finding a suitable team is also tedious — careless workers may damage the business.

4. Self-Doubt

Self-doubt comes when we lack confidence in our abilities. Best way out: work towards goals, keep them visible, and surround yourself with family/friends who support you. Believing in ourselves is the first step towards crushing the fear of failure.

5. Forming a Team and Teamwork

Finding suitable people and training them is tedious. When new people fit into the team's culture, work happens faster and better.

1.12 Entrepreneurial Attitudes

Five Attitudes of a Successful Entrepreneur

2.1 From Attitudes to Competencies

Attitudes Mapped to Competencies

2.2 Decisiveness — 4-Step Process

1. Knowing Yourself

• What kind of problems do you want to solve?
• What bothers you around you?
• What are you good at that can help solve these problems?

2. Identifying Opportunities

• Right time and place where a business will work.
• Who are the people you want to help?
• What problems do they have?
• What ideas do you have to solve them?

3. Analysing the Opportunity

• If it works, why would it work?
• What problems could stop the idea from succeeding?
• What do customers think about the idea?
• What is the competition for that idea?

4. Problem Solving

• Make changes to the idea after studying customers and the market.
• What is the final idea? What makes it different from others?
• How will you use your strengths to make the idea successful?

2.3 Taking Initiative — 3 Steps

1. Realise that things are in your control and you can take action in a given situation.
2. Believe that you have the ability to take action.
3. Take action in that situation!

2.4 Interpersonal Skills

1. Listening

Listen when someone talks — it helps build trust. When someone shares something, it is usually because they have thought about it or that is how they feel.

2. Body Language

Facial expressions, gestures and postures matter. A smile and leaning forward makes the other person comfortable; a frown, crossed arms or leaning back signals disinterest.

3. Positive Attitude

Being optimistic about situations, interactions and oneself. People with positive attitudes see the best even in difficult situations. Especially important when giving and receiving feedback — start with what the person is doing well, then mention what could be better.

2.5 Perseverance — 4 Ways to Build It

• Not giving up when the situation is difficult.
• Working hard to achieve the goal.
• Learning from failures — analyse what went wrong.
• Stress management — keep yourself healthy and refreshed.

Stress Management — Common Techniques

1. Taking a walk in nature.
2. Doing a physical activity — running, swimming, etc.
3. Practising deep breathing exercises.
4. Practising meditation or yoga.

2.6 Organisational Skills

Organisational skills = ability to make optimal use of time, energy and resources to achieve goals.

⏰ 1. Time Management

1. Planning well.
2. Setting goals.
3. Setting deadlines.
4. Giving important work responsibilities to others in the team.
5. Conducting the most important tasks first.

2. Goal Setting

A goal is the aim or result we want from an activity. It makes us work harder, motivates us to complete what we start, and gives direction.

3. Efficiency

Ability to do things well, successfully, without wasting time. Use material, team efforts, money and time well.

4. Managing Quality

Setting and maintaining a standard of excellence for products or services. As volume grows, quality becomes the most critical factor. Ravi bought good-quality clothes even from a local seller because his customers were important to him.

2.7 Core Entrepreneurial Competencies — The Full List

The following competencies are assessed through a self-rating questionnaire:

1. Self-Confidence — faith in one's own abilities.
2. Initiative — acting before others.
3. Seeing and Acting on Opportunities — spotting chances to profit.
4. Concern for Quality — maintaining high standards.
5. Goal Setting and Risk Taking — setting ambitious, realistic goals.
6. Problem Solving and Creativity — inventive solutions.
7. Systematic Planning and Efficiency — orderly use of resources.
8. Information Seeking — actively gathering facts and data.
9. Persistence — sticking with a task despite difficulty.
10. Influencing and Negotiating — convincing others and reaching win-win deals.
11. Team Building — creating a group that works well together.

2.8 Valuing Service and Diversity

• Valuing Service — taking pride in helping customers; treating every service interaction as an opportunity to build trust and reputation.
• Valuing Diversity — respecting co-workers, customers and partners from different backgrounds, cultures, languages, abilities and beliefs.
• Diverse teams are more creative and solve problems in ways a homogeneous team cannot.