Concept of Entrepreneur

Basically an entrepreneur is a person responsible for setting up a business or an enterprise.

He has the initiative , skill for innovation and who looks for high achievements.

He is acatalytic agent of change and works for the good of people .

He puts up new green field projects that create wealth, open up many employment opportunities and

leads to growth of other sectors

The word "entrepreneur" is derived from a French root entreprendre, meaning, "toundertake".

The term "entrepreneur" seems to have been introduced into economic theory byCantillon (1755)

but Say (1803) first accorded the entrepreneur prominence. It wasSchumpeter however, who really

launched the field of entrepreneurship by associating itclearly with innovation. Druckers definition of

entrepreneurship, namely a systematic, professional discipline, brought a new level of understanding to

the domain (Maurer,Shulman, Ruwe & Becherer 1995:526). Sharma and Chrisman (1999:12) identified
twoclusters

of thought on the meaning of entrepreneurship. One group focused on thecharacteristics of

entrepreneurship

(e.g. innovation, growth, uniqueness) while a secondgroup focused on the outcomes of

entrepreneurship

(e.g. the creation of value).

He is a person who develops and owns his own enterprise

He is a moderate risk taker and works under uncertainty for achieving thegoal.

He is innovative

He peruses the deviant pursuits

Reflects strong urge to be independent.

Persistently tries to do something better.

Dissatisfied with routine activities.

Prepared to withstand the hard life.

Determined but patient

Exhibits sense of leadership

Also exhibits sense of competitiveness

Takes personals responsibility

Oriented towards the future.

Tends to persist in the face to adversity

Convert a situation into opportunity.An entrepreneur is a person who starts an enterprise.

He searches for change and responds toit. A number of definitions have been given of an entrepreneur-

The economists view him as a fourth factor of production along with land labour and capital.
The sociologists feel that certain communities and cultures promote entrepreneurship like for example
in

India we say that Gujaratis and Sindhis are very enterprising.Still others feel that entrepreneurs are

innovators who come up with new ideas for products,markets or techniques

Concept of Entrepreneurship

Entrepreneurship involves decision making, innovation, implementation, forecasting of thefuture,

independency, and success first and this is how enterprenuership developedEntrepreneurship is a

discipline

with a knowledge base theory. It is an outcome of complexsocio-economic, psychological,

technological, legal

and other factors. It is a dynamic and

risky process. It involves a fusion of capital, technology and human talent. Entrepreneurshipis equally
applicable

to big and small businesses, to economic and non-economic activities.Different entrepreneurs might
have some common

traits but all of them will have somedifferent and unique features. If we just concentrate on the
entrepreneurs then

there will be asmany models as there are ventures and we will not be able to predict or plan, how and
where,and when

these entrepreneurs will start their ventures.Entrepreneurship is a process. It is not a combination of

some stray

incidents. It is the purposeful and organized search for change, conducted after systematic analysis of
opportunities

in the environment. Entrepreneurship is a philosophy- it is the way one thinks,one acts and therefore it
can exist in

any situation be it business or government or in the fieldof education, science and technology or poverty
alleviation
 or any others.Entrepreneurship can be described as a process of action an entrepreneur undertakes
toestablish his

enterprise. Entrepreneurship is a creative activity. It is the ability to create and build something from
practically

nothing. It is a knack of sensing opportunity where otherssee chaos, contradiction and confusion.
Entrepreneurship is

the attitude of mind to seek opportunities, take calculated risks and derive benefits by setting up a
venture.

It comprisesof numerous activities involved in conception, creation and running an enterprise.According

to

Peter Drucker

Entrepreneurship is defined as a systematic innovation, whichconsists in the purposeful and organized

search for changes, and it is the systematic analysisof the opportunities such changes might offer for
economic and social innovation

Entrepreneurship is a dynamic process of vision, change, and creation. It requires anapplication of

energy and passion

towards the creation and implementation of newideas and creative solutions. Essential ingredients
include the willingness

to takecalculated risks- in terms of time, equity, or career; the ability to formulate an effectiveventure
team;

the creative skill to marshall needed resources; the fundamental skills of building a solid business plan;
and, finally,

the vision to recognize opportunity whereothers see chaos, contradiction, and confusion

factors contributing to the failure of entrepreneurial ventures

Internal factors
In the light of internal factors review of the related literature will show three main area of
research, which are related to a- personal Characteristics of Small Business entrepreneurs, b-
Planning and organizing business and c- financial management.

a- personal Characteristics of Small Business entrepreneurs

In spite of a number of research which has attempt to discover if there are any clear
characteristics which distinguish small business owners the general conclusion appears to be
that there in no simple pattern, but a complex set of interrelated factors that increase or
decrease the probability that an individual will become the owner of a small business, and
whether or not that business will succeed or fail.

Some studies are focused on demographic and personality Characteristics of entrepreneurs. In

terms of demographics they looked at class and educational background, age and gender
(Hornday, 1990). Historically, the majority of individuals who entered business did so through
existing family interests (Bolton, 1971). But in the light of personality, An emerging view held by
economists is that particular traits characterize the successful entrepreneur (e.g. Sullivan et al
1998; Miner, 1997; Miner 1997; Ward, 1992; Chell, Haworth & Brearley, 1991) proposes that
there is "not just one kind of person who has the potential to succeed as an entrepreneur,
rather there are four types": the personal achiever, the empathic salesperson, the expert idea
generator, and the real manager. As the name suggests the main driving force for the personal
achiever is the need to achieve, but they often have insufficient knowledge to run an
organisation effectively and are likely expand their business too quickly in their pursuit of
success. The psychological characteristics used to describe successful entrepreneurs have
frequently included: the need for achievement, propensity for risk-taking, personal and
interpersonal values and innovativeness (Low & MacMillan, 1988).

Attempts to characterize successful entrepreneurs have raised a number of issues. Brandstatter

(1997) suggests that, although there are many reasons why so many new business ventures fail
within the first five years, misfit of personality structure and task structure may be one of the
most frequent causes of failure. Moreover, it is emotional stability and independence that
foster the skills necessary for business success, especially during the initialization phase when
entrepreneurs need to (a) have the courage to take risks and (b) have the flexibility and
persistence to purse their goals. Nine out of ten business failures in the United States are
caused by a lack of general business management skills and planning (Troy State University,
2003). According to Dun & Bradstreet statistics7, 88.7% of all business failures are due to
management mistakes. The following list summarizes the 12 leading management mistakes
that lead to business failures. 1) Going into business for the wrong reasons , 2) Advice from
family and friends, 3) Being in the wrong place that the wrong time, 4) Entrepreneur gets worn-
out and/or underestimated the time requirements, 5) Family pressure on time and money
commitments, 6) Pride, 7) Lack of market awareness, 8) The entrepreneur falls in love with the
product/business, 9) Lack of financial responsibility and awareness, 10) Lack of a clear focus, 11)
Too much money, 12) Optimistic/Realistic/Pessimistic (quoted from Lewis A Paul, 2003).

However, Cromie and John (1983) concluded: "The skills necessary to ensure the growth and
development of an enterprise may well be different from those required to conceive and
launch a business." This view of the entrepreneurial process as a dynamic one is becoming
more widely recognised, for example Hisrich (1990) argues that as an organisation enters a
growth phase there is an increasing need for entrepreneurs to have managerial skills. The
majority of new business owners set up in the industry in which they had previously been
employed (Carter & Cannon, 1988; Fuller, 1994). There is also evidence that most successful
small business owners previously worked in other small firms or smaller divisions of larger
companies (Lussier, Robert N. 1996; Fothergill & Gudgin, 1982).

b- Planning and organizing business

What seems to be a common citation are poor planning , poor management and marketing.
There are a lot of reasons given, but it is hard to actually know for sure why a business failed
unless you analyzed each particular case. good idea for a small business to succeed. Small
business entrepreneurs must plan for success. This includes market research, identifying the
primary audience/consumer and developing a five or ten-year plan that includes cash flow,
financing and expansion concerns.Marketization involves far more than just knowing your
market and what motivates it. Most businesses focus on the marketing "push," but few ever
focus on the "pull," which is one of the secrets to success.
Pre-start-up planning is "the process by which the entrepreneur, in exploiting an opportunity,
creates a vision of the future and develops the necessary objectives, resources, and procedures
to achieve that vision (Sullivan et al 1998; Lussier, Robert N. 1996; Sexton & Bowman-Upton,
1991, p118). It is a process that includes collecting and analyzing data, then using that
knowledge to develop a business plan. Plans can range from those with the most minimal
structure through to very comprehensive and detailed, long-term plans. Bracker and Pearson
(1986) propose a four-level classification: (1) unstructured plans, (2) intuitive plans, (3)
structured operational plans and (4) structured strategic plans. Although several studies have
shown strong positive links between planning and business success (e.g. Schwenk & Sharder,
1993; Bracker, Keats & Pearson, 1988) other have found no such links or differential links
between industries (e.g. Robinson & Pearce, 1983; Sharder, Mulford & Blackburn, 1989).
However, although most would agree that planning can be beneficial, there is an emerging view
that the value of planning is context-dependent and that its benefits may differ across contexts
(Castrogiovanni, 1996; Mintzberg, 1994).

c- financial management

A chronic problem facing many small businesses is the lack of funds to establish them on a
sound and stable financial footing. Initially, a business's capital may be limited to what its
owners can raise from savings, mortgaging the family home or borrowing from relatives etc.
Different studies observed the importance of financial issues for new and existing
entrepreneurs ( Sullivan et al 1998; Lussier, Robert N. 1996; Hay and Kamshad,1994; Bevan et
al,1987). In terms of financial the entrepreneurs were complaining about obtaining
capital/finance , cash flow problems, a guaranteed income during the first year of activity, their
low information about the tax.

External and contextual Factors

In terms of external and contextual factors it is widely recognised that successful organisations
are those that best adapt to fit the opportunities and the constraints inherent in the
environment in which they operate (Kalleberg & Leicht, 1991). Here some factors are more
concentrated by previous researchers, namely: a-economic factors, b- government support, c-
Social support d- Information factors and e- informal factors
a- Economic and infrastructure factors

The vast majority of new micro and small businesses are initialized in the localities in which
their founders already live, and the chances of success are closely related to the geographical
location (Sullivan et al 1998; ; Lussier, Robert N. 1996;Stanworth, 1991). In addition, in
geographical areas of high large-plant-industries there tends to be a lack of suitable start-up
premises for micro and small businesses. Thus, business start-up is likely to be greatest in areas
which are low in large-plant-industries and which have a high small business populations
already established .Also, there appears to be a number of key locality influences that have a
positive impact on the development and growth of small firms (Keeble & Walker, 1994). These
included previous population growth, capital availability through housing wealth, local
enterprise cultures, and professional expertise. Local market demand also has a degree of
influence, although this is less important in determining survival and death rates in micro and
small businesses.

b- Government support and empowerment role

It is realized that small business has a greater role in economic growth. Therefore, the
government should help entrepreneurs to start new business and protect them to continue the
business. The government can stimulate private business development and employment
growth by fostering an "enabling economic environment". This means minimum regulations;
fair, broad-based taxation as low as feasible and simple for compliance; liberalized trade both
domestic and external, and helping to create a financial sector with easier access to funds for all
businesses. The government should also make available funds (along the lines of the social fund
mentioned above), including lines of credits for small business loans to mitigate the damage to
businesses and of employment losses created by policy reform and restructuring. the quality of
advisory services, especially with regard to advice at start-up; subsidies for support advice;
the availability of effective business mentors; the awareness of business support opportunities;
the level of bureaucracy involved in new business development, especially with regard to the
process of employment creation. The government should act as a facilitator -- a provider of
resources -- for support and advisory centers, but not as a direct provider of services. The
government is also responsible for creating the physical infrastructure -- roads, power, water,
transport links, telecommunications, industrial land, estates and incubators -- and basic skills
training and satisfactory education at all levels. Without these, the private sector cannot
flourish. It is important to recognize that the provision of some of the above facilities may be
the responsibility of local or regional authorities as well as central government. The
decentralization of support services and the encouragement of regional and local initiatives are
desirable and usually more cost-effective ( Tawney, C and Levitsky,J.2000). A study in Russia
observed that existing practices in the areas of registration, inspections, licensing, and
certification are very far from the benchmarks established in the new Legislation (CEFIR and the
World Bank,2002).

c- Social support

The availability of social support can be a significant factor in the ability of small business
owners to cope with the barriers and difficulties they face during the initialization of a new
enterprise. A lack of family support places small business owners at a serious disadvantage and
this is especially destructive for those who have heavy family responsibilities, responsibilities
that generally fall on women. This results in female entrepreneurs working significantly fewer
hours than their male counterparts (Chay, 1993) and the effects of this on business growth can
be clearly seen, with women operating smaller businesses than men (Loscocco et al, 1991)

d- Information factors

The research showed that access to information to know the market behavior, analysis the
demand and supply of products and services are in high priority for small business managers.
Those who have a greater understanding of the industry or market tend to have more favorable
perceptions of the value of the opportunities they encounter and their ability to utilize those
opportunities (Lussier, Robert N. 1996;Gatewood et al, 1995 ).

In order to develop a theoretical framework for this study we focused on some important
factors. Based on the review literature, theories of Total quality management, entrepreneurs
theories and also our explorative interviews with knowledgeable official staff and
entrepreneurs we developed a framework. (see figure 1). In facts, same as Wilken (1979) we
assume that Individuals pursuing a new business venture go through three stages of
entrepreneurship, namely raising idea, start-up activities and finally, activate the business.
There are many factors, which influence the formation of a new business venture and its
subsequent success or failure. These include the internal factors (personalities of
entrepreneurs, their motivation, efforts, taking risk, tolerance for pursuing such a venture )
and external factors ( economic & infrastructure conditions, inflation, market information,
supply and demand for products and services, banks system, trade regulation, skilled personnel

DSIR
The Department of Scientific and Industrial Research (DSIR) is a part of the Ministry of Science
and Technology, which was announced through a Presidential Notification, dated January 4,
1985 (74/2/1/8 Cab.) contained in the 164th Amendment of the Government of India
(Allocation of Business) Rules, 1961. The Department of Scientific and Industrial Research (DSIR)
has a mandate to carry out the activities relating to indigenous technology promotion,
development, utilization and transfer.

The primary endeavour of DSIR is to promote R&D by the industries, support a larger cross
section of small and medium industrial units to develop state-of-the art globally competitive
technologies of high commercial potential, catalyze faster commercialization of lab-scale R&D,
enhance the share of technology intensive exports in overall exports, strengthen industrial
consultancy & technology management capabilities and establish user friendly information
network to facilitate scientific and industrial research in the country. It also provides a link
between scientific laboratories and industrial establishments for transfer of technologies
through National Research Development Corporation (NRDC) and facilitates investment in R&D
through Central Electronics Limited (CEL).

1. Promoting Innovations in Individuals, Start-ups and MSMEs (PRISM)

PRISM (Promoting Innovations in Individuals, Start-ups and MSMEs) scheme aims at to

support individual innovators which will enable to achieve the agenda of inclusive development
-

one of the thrust areas of XIIth five year plan (2012-2017). It would also provide support to

institutions or organizations set up as Autonomous Organization under a specific statute or as a

society registered under the Societies Registration Act, 1860 or Indian Trusts Act, 1882 leading

to development of state-of-art new technology solutions aimed at helping MSME clusters.

TBI
Technology Business Incubators (TBI): The TBI is a venture of universities, public research
institutes,

local government and private institutions to promote and bolster a new technology intensive
enterprise.

TBI refers to the type of incubation where the focus group consists of innovative, mostly
technology-oriented,

or knowledge-intensive service sector enterprises and interactions with the academic sphere
giving a substantive

element of the incubation process. The pushing forward of TBI occurred in parallel with the
vigorous transformation

of todays spatial economic processes, it can be interpreted as a reply for the challenges of the
learning-based

economy.

As TBI intervenes into the spatial processes of the learning-based economy, integrates
innovation- and

enterprise-policy, and is implemented with the active participation of the academic sphere, it
has certain unique

characteristics that deserve mention:

TBI fosters innovative start-up firms, thus the process of incubation is strongly intertwined
with the innovation process

that occurs in the supported enterprises.

The objective of TBI is the realization of certain local economic development goals (ultimately
the enhancement

of the competitiveness).

TBI aims at the development of new innovative industries by stimulating the establishment
and early growth of

start-up firms
The National Science & Technology Entrepreneurship Development Board (NSTEDB),
established in 1982 by the Government

of India under the aegis of Department of Science & Technology, is an institutional mechanism
for promoting

knowledge-driven and technology-intensive enterprises. The Board, having representations

from socio-economic and

scientific Ministries/Departments, aims to convert "job-seekers" into "job-generators" through

Science & Technology

(S&T) interventions. The objectives of NSTEDB have been defined to be:

To promote and develop high-end entrepreneurship for S&T manpower as well as self-
employment by utilising

S&T infrastructure and by using S&T methods.

To facilitate and conduct various informational services relating to promotion of

entrepreneurship.

To network agencies of the support system, academic institutions and Research &
Development (R&D) organi

sations to foster entrepreneurship and self-employing using S&T with special focus on
backward areas as well.

To act as a policy advisory body with regard to entrepreneurship.

These objectives have been operationalised by NSTEDB through two major interventions.
Namely, the scheme for

Science & Technology Entrepreneurs Parks (STEP), which was started in the early 1980s, and
the Technology Business Incubators

(TBI) programme launched in early 2000.

TBIs have been promoted by NSTEDB to achieve the following objectives:

Creation of technology based new enterprises,

Creating value added jobs & services,

Facilitating transfer of technology,

 Fostering the entrepreneurial spirit,

Speedy commercialisation of R&D output,

Specialised services to existing SMEs.

Each TBI promoted by NSTEDB focuses on not more than 2-3 thrust areas. NSTEDB is currently
promoting TBIs

in the following select thrust areas which have potential for faster growth:

Information & Communication Technology (ICT)

Application of bio-technology

New materials including nano materials

Instrumentation and maintenance

Agriculture and allied fields

Garments and fashion technology

Service

MSME
under the ministry of mSME

Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant MSME sector by
promoting growth and development of the MSME Sector, including Khadi, Village and Coir
Industries, in cooperation with concerned Ministries/Departments, State Governments and
other Stakeholders, through providing support to existing enterprises and encouraging creation
of new enterprises

Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro,
Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium
Enterprises (MSME) are classified in two Classes:

Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods

pertaining to any industry specified in the first schedule to the industries (Development and
regulation) Act, 1951) or employing plant and machinery in the process of value addition to the
final product having a distinct name or character or use. The Manufacturing Enterprise are
defined in terms of investment in Plant & Machinery.

Service Enterprises:-The enterprises engaged in providing or rendering of services and are

defined in terms of investment in equipment..

(A) MANUFACTURING ENTERPRISES

(i) Micro Manufacturing Enterprises:

The investment in plant and machinery does not exceed Rs.25 lakhs

(Rupees twenty five lakhs only).

(ii) Small Manufacturing Enterprises:

The invesetment in plant and machinery is more than twenty five lakh rupees

but does not exceed rupees 5 crores (Rupees five crores only).

Micro

Small

ENTERPRISES

ENTERPRISES

Manufacturing Enterprises

(Ceiling on investment

in Plant & Machinery) (Ceiling on investment

in Equipment)

Rs.25 lakh

Rs.5 Crore

Rs.10 Crore

Rs.10 lakh

Rs.2 crore

Rs.5 crore
Medium

Service Enterprises

NEW NOMENCLATURE AND CLASSIFICATION OF MSME

(As per Micro, Small and Medium Enterprises Development Act, 2006)

(iii) Medium Manufacturing Enterprises:

The investment in plant and machinery is more than rupees 5 crores but not

exceeding Rs.10 crores (Rupees ten crores only).

(B) SERVICE ENTERPRISES

(i) Micro Service Enterprises:

The investment in equipment does not exceed rupees 10 lakhs.

(ii) Small Service Industries:

The investment in equipment is more than 10 (Ten lakh rupees) but does

not exceeds rupees 2 crores.

(iii) Medium Service Enterprises:

The investment in equipment is more than rupees 2 crores but does not

exceed rupees 5 crores.