Entrepreneurship: Concept & Functions

Mansukh Bhai Prajapati, hailing from Morbi village in Rajkot, South Gujarat, is a tenth-standard dropout who defied conventional barriers through his remarkable innovation. In 2002, he introduced the Mitticool refrigerator, an eco-friendly appliance made entirely of clay that functions without electricity—an ideal solution for rural and energy-scarce regions.

Driven by his inventive spirit, he further developed other sustainable products such as:

• Mitticool Water Filter

• Clay-based 'Tavdi' or Tawa (Frying Pan)

His work exemplifies the true essence of entrepreneurship: innovation for social and economic transformation.

An entrepreneur is someone who:

• Develops and owns their own enterprise.

• Is a moderate risk-taker and operates under uncertainty.

• Is innovative and challenges conventional norms.

• Desires independence and self-reliance.

• Constantly seeks improvement and better ways of doing things.

• Is dissatisfied with routine, predictable work.

• Is ready to face hardships and challenges.

• Demonstrates patience, determination, and leadership.

• Possesses a competitive spirit.

• Takes personal responsibility for outcomes.

• Is future-oriented and resilient in adversity.

Functions of an Entrepreneur

• 1. Entrepreneurial Functions:

     • Innovation: Developing new ideas, products, or processes.

     • Risk-Taking: Embracing uncertainty to pursue opportunities.

     • Organization Building: Structuring and mobilizing resources effectively.

  2. Promotional Functions:

     • Idea Identification: Exploring and validating business ideas.

     • Feasibility Analysis: Conducting detailed investigations.

     • Resource Mobilization: Assembling necessary inputs.

     • Financing: Procuring funds for implementation.

  3. Managerial Functions:

     • Planning & Organizing

     • Staffing & Directing

     • Leadership & Communication

     • Motivation & Supervision

     • Coordination & Control

  4. Commercial Functions:

     • Production Management

     • Financial Management

     • Marketing

     • Personnel Management

     • Accounting

Need for Entrepreneurship in the Economy

• Acts as the lifeline of a nation’s economy.

• Drives innovation, transformation, and inclusive growth.

• Generates employment opportunities.

• Delivers social benefits and improves living standards.

• Enhances productivity and national competitiveness.

Common Myths About Entrepreneurship

• Starting a business is easy.

• It takes a lot of money to start a business.

• Start-ups can't be financed through debt.

• Banks don’t fund start-ups.

• Success is only possible in “hot” industries.

• Success mainly depends on industry trends, not entrepreneurial skill.

• Financial success is guaranteed.

Advantages of Being an ntrepreneur

• Excitement of building something new.

• Originality in ideas and execution.

• Independence in decision-making.

• Flexible work environment.

• Rational earnings based on efforts and success.

Disadvantages of Entrepreneurship

• Uncertain income/salary.

• Lack of job benefits (like health insurance).

• Irregular work schedule.

• Administrative burdens.

• Risk of dealing with incompetent staff.

Entrepreneurship Process

1. Self-Discovery – Understanding personal strengths, passions, and interests.

2. Identifying Opportunities – Observing market needs and trends.

3. Idea Generation & Evaluation – Brainstorming and assessing viable ideas.

4. Business Planning – Creating a detailed roadmap.

5. Raising Start-up Capital – Securing funding from various sources.

6. Start-up Execution – Launching and managing the enterprise.

7. Growth – Scaling operations and expanding the market.

8. Harvesting – Reaping the returns through profits, mergers, or exits.

1. Entrepreneur:

   • Origin: The term “entrepreneur” is derived from the French word “entreprendre”, meaning “to undertake.”

   • First Use: Appeared in the French language in the early 16th century.

   • Coined By: Richard Cantillon, an Irishman residing in France.

   • Definition: An individual who undertakes the risk of starting a new enterprise.

2. Entrepreneurship:

   • A process of action taken by an entrepreneur to establish an enterprise.

   • Involves innovation, risk-taking, and coordination of resources to create value.

3. Enterprise:

   • An economic unit created by the entrepreneur.

   • Considered the fourth factor of production, combining:

     • Land

     • Labor

     • Capital

   • It organizes and manages these factors to establish a business.

4. Key Terms & Definitions

   • Opportunity:A chance to do something new or differently.

   • Economic Agent: A person or organization that combines production factors to create goods or services and sell them in the market.

   • Idea: A thought, opinion, or mental impression.

   • Idea-Centric: The ability to generate unique and creative ideas leading to innovation.

   • Innovation: The act of doing something new or different.

   • Product: A tangible item created for sale.

   • Service: The performance of duties or work for another in exchange for payment.

   • Catalytic Agent: Individuals who bring significant economic or social change.

   • Risk: Uncertainty involving the possibility of loss.

   • Profit: The surplus remaining after total expenses are deducted from revenue.

   • Salary: A fixed regular payment to an employee, typically monthly.

5. Factors of Production:

   • Land – Natural resources.

   • Labor – Human effort (physical and mental).

   • Capital – Tools, equipment, and financial assets.

   • Entrepreneur – Innovator and risk-taker.

   • Enterprise – Organizes the above resources into a functioning business.

6. Key Business Functions:

   • Managerial Functions:

     • Planning: Defining goals and mapping strategies to achieve them.

     • Organizing: Assigning resources and responsibilities to execute plans.

     • Staffing: Recruitment, training, and hiring the right people for the job.

     • Motivation: Encouraging employees to perform effectively.

     • Controlling: Monitoring performance and taking corrective actions.

     • Leadership: Influencing and guiding team members.

     • Communication: Exchanging information effectively within and outside the organization.

   • Commercial Functions:

     • Finance: Managing money, including investment and expenditure.

     • Marketing: Promoting and distributing products to consumers.

     • Personnel: Managing the workforce of the organization.

     • Accounting: Recording and interpreting financial transactions.

1. Narayana Murthy

• Country: India

• Contribution: Co-founder of Infosys, a multinational corporation specializing in business consulting, technology, and outsourcing services.

• Significance: Pioneered the Indian IT industry and contributed significantly to India’s emergence as a global technology hub.

2. Sir Richard Branson:

• Country: United Kingdom

• Born: July 18, 1950

• Contribution: Founder of the Virgin Group, which controls over 400 companies in various sectors including airlines, music, telecom, and space travel.

• First Venture: Launched a magazine called Student at the age of 16 in 1970.

• Significance: Known for his bold, adventurous business style and diversification across industries.

3. Mahima Mehra – Haathi Chaap

• Country: India

• Founded: 2003, in Delhi

• Business: Co-founded Haathi Chaap with Vijendra Shekhawat, a company that makes handmade paper and products from elephant dung.

• Export History: Initially exported to Germany for the first four years; launched in India in 2007.

• Significance: Promoted sustainability and innovation using eco-friendly resources.

4. Karsanbhai Patel

• Country: India

• Background: Born into a farmer family in North Gujarat; earned a B.Sc. in Chemistry.

• Career Start: Worked as a lab technician in New Cotton Mills and then in the state Geology & Mining Department.

• Founded: Nirma in 1980, named after his daughter Nirupama, starting with detergent powder.

• Significance: Revolutionized the Indian detergent market by offering affordable alternatives to multinational brands.

5. Dhirubhai Ambani

• Full Name: Dhirajlal Hirachand Ambani

• Country: India

• Contribution: Founder of Reliance Industries, along with his cousin, in Mumbai.

• Recognition: Featured in the Sunday Times list of Top 50 Businessmen in Asia.

• Significance: Built one of India's largest private sector enterprises, playing a pivotal role in shaping India's industrial landscape.