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Definition and concept of entrepreneur
Adam Smith’s definition – “The entrepreneur is an individual, who forms an organization for commercial purpose
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“Entrepreneur is an employer, master, merchant but
explicitly considered as a capitalist”
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Drucker’s Views on Entrepreneur – “An entrepreneur is the one who always searches for change, responds to it and exploits it as an opportunity
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In the 20th century the theorist Arthur H
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The term entrepreneur is a French word, and is derived from the French word “enterprendre”
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It is commonly used to
describe an individual who organizes and operates a business or businesses, taking on financial risk to do so
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An entrepreneur is someone who exercises initiative by organizing a venture to take benefit of an opportunity and, as the decision maker, decides what, how, and
how much of a good or service will be produced
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The
entrepreneur is usually a sole proprietor, a partner, or the one who owns the majority of shares in an incorporated venture
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Qualities of Entrepreneur
Skills of Entrepreneur
Functions of Entrepreneur
Willingness to assume risk
Conceptual skills
Innovations
Leadership
Technical skills
Planning the project
Decisiveness
Human relation skills
Organising
Creative thinking
Communication skills
Risk taking and uncertainty bearing
Flexibility
Diagnostic skills
Procuring and mobilising resources
Business acumen
Decision making skills
Taking business decisions
Confidence in project
Managerial skills
Perception of marketing opportunities
Technological knowledge
Marketing skills
Financial management
Ability to marshal resources
Project development skills
Upgrading process and product quality
Honest
Fulfilling social obligations
Perseverance
Developing social atmosphere
Definition and concept of entrepreneurship
“Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by
production or distribution of economic goods and services
...
H
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” -Robert K
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” – Robert C
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It includes all those activities required to start an enterprise
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It is an activity which involves analysing the environment for identifying opportunities and exploiting them into profitable
ventures
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Therefore, entrepreneurship involves missionary efforts that involve risks to innovate something of value from which the entrepreneur will get financial and
psychic rewards
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It means ‘to undertake’
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First entrepreneurs-traced back- 20,000 years ago-local exchange of volcanic glass
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Some areas of specialization within communities - fishing, cooking, tool making, shelter building and
clothes making
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Key developments- invention of money
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After origination of money, new developments- banking and guild system
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Industrial revolution marked shift in history of entrepreneurship
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Post-World War 2- economies increased- better means of shipping and communication
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Entrepreneurs engaged in metal handicraft
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British set foot in Indian soil- changed economic and political structure
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After First World war- second wave of entrepreneurial growth
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Theories of entrepreneurship
The theories try to explain whether entrepreneurs are born or made
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The following are some of the entrepreneurial
theories:
Economic theory
This theory revolves around an entrepreneur being an innovator, combining the various
resources/ factors of production to create new products/wealth
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It holds that people have
personal traits and attributes, mental desires to be independent
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Entrepreneurs are characterised by
high need for achievement, which tends to give them high desire to take personal responsibility in risks
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According to this theory, entrepreneurial behaviour is environmentally determined and is inherent during childhood, where parents have certain high
standards achievement
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Rotter’s theory holds that people
with a strong internal locus of control believe their actions can influence the external world and research suggests most entrepreneurs possess trait
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Psychological theories of entrepreneurship focus on the individual and the mental or emotional elements that drive entrepreneurial individuals
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Thus, the entrepreneurship is the function of a group of economic, political, legal, social, cultural, psychological, technological and natural
environmental factors
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Thus, there
emerges a right kind of environment, based on an integrated scheme of factors, that becomes favourable or conductive to the development of entrepreneurship
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V
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Really
speaking, the fundamen- tal of entrepreneurship is entrepreneurial disposition
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It is the entrepreneurial disposition which motivates an entrepreneur to take risk, to move forward and establish new enterprises
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T
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Rao clearly opine that all these factors have a dominant role in the development of entrepreneurship
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Capital Formation
Entrepreneurs mobilize the idle savings of the public through the issues of industrial securities
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Rate of capital formation increases which is essential for rapid economic growth
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2
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They convert the latent and idle resources like land, labour and capital into national income and wealth in the form
of goods and services
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3
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Directly, self-employment as an entrepreneur offers the best way for independent and honorable
life
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Thus, entrepreneurship helps to reduce the unemployment problem in
the country
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Balanced Regional Development
Entrepreneurs in the public and private sectors help to remove regional disparities in economic development
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Public sector steel plants and private sector industries by Modis, Tatas, Birlas and others have put the hitherto unknown places on the international map
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Improvement in Living Standards
Entrepreneurs set up industries which remove scarcity of essential commodities and introduce new products
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, in the small scale sector help to improve the standards of life of a common man
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6
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Industrialists help to manufacture indigenous substitutes of hitherto imported products thereby reducing
dependence on foreign countries
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Such import substitution and export promotion help to ensure the economic independence of the country without which political independence has little meaning
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Backward and Forward Linkages
An entrepreneur initiates change which has a chain reaction
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For example- the
establishment of a steel plant generates several ancillary units and expands the demand for iron ore, coal, etc
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By increasing the supply of steel, the plant facilitates the growth of machine building, tube making, utensil manufacturing and such
other units
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Promotes Country's Export Trade
Entrepreneurs help in promoting a country's export-trade, which is an important ingredient of economic development
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Hence import substitution and export
promotion ensure economic independence and development
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The exploitation of locally available resources and entrepreneurship
India is considered rich in natural resources
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Some
large-scale industries started by out-of-state entrepreneurs in economically backward regions can help as a model of pioneering efforts
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Activities: Increased activities of local entrepreneurs will
also result in construction
...
10
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In the changing
environment where we are faced with the problem of recession in wage employment opportunities, the alternative to a wage career is the only viable option
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Such an alternate path through
entrepreneurship could help the country in defusing social tension and unrest amongst youth
Definition and concept of intrapreneurs
Pinchot defined intrapreneurs as “dreamers who do & those who take hands-on responsibility for creating innovation of any kind, within a business”
...
An intrapreneurship is a phenomenon of empowering the employees within the organization, by valuing their ideas and converting them into a profit-making
model for the business
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It is the combination of employee responsibilities with his/her entrepreneurship skills that creates an intrapreneur
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Features of Intrapreneurs:
1
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They take risks on pursuing their ideas and putting them in front of their
colleagues, even if they may result in failure
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2
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They use their creativity and their understanding of the business's mission to come up with innovative ideas, processes or
products
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3
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True
intrapreneurship requires the bravery to stand up against the norm and the confidence to suggest an alternate solution
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Intrapreneurs take responsibility
Intrapreneurs take personal responsibility for what's happening in their role, on their team and in their organization
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Intrapreneurs also take responsibility for the projects they start and follow through on the changes they say
they'll make
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Intrapreneurs drive progress without direct guidance
Intrapreneurs don't need to be told to innovate or to implement change; they do so without being prompted by their managers or team members
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They are typically internally motivated to drive progress
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Intrapreneurs are optimists
Intrapreneurs are optimistic enough to believe that they can make a change within their organization — and that any change they make matters
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Additionally, their optimistic minds allow them to see the big
picture — and a bright vision of what things could look like in a perfect world
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Passionate
Having a passion for things is essential for entrepreneurs and Intrapreneurs alike
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8
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One needs to have the knack to have a vision about the company’s future to work backwards and turn it
into a reality!
9
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Adaptable
As an intrapreneur, there will constantly be evolving situations
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11
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Resilience
Last but one of the most crucial ones is to be resilient! There will be obstacles thrown at you, left, right and centre, but you have to know how to fall and get back
up! Positively take criticism and work on it instead of letting it be your downfall!
BASIS FOR
COMPARISON
ENTREPRENEUR
INTRAPRENEUR
Meaning
Entrepreneur refers to a person who set up his own business with
a new idea or concept
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Approach
Intuitive
Restorative
Resources
Uses own resources
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Capital
Raised by him
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Enterprise
Newly established
An existing one
Dependency
Independent
Dependent
Risk
Borne by the entrepreneur himself
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Works for
Creating a leading position in the market
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Types of entrepreneurs
Classification According to Type of Business
1
...
These
entrepreneurs may be found in small business units or big enterprises
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Example: A Printing Press,
bakery or a textile unit
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TRADING ENTREPRENEURS
Trading Entrepreneurs are those who undertake trading activities
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They give more emphasis
on distribution and marketing of goods
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Example: Agents
and Wholesalers
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INDUSTRIAL ENTREPRENEURS
Industrial Entrepreneurs are those who concentrate in industrial and production activities
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They are generally a product-Oriented entrepreneur
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4
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Example: A Trust registered under the Trust
Act
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AGRICULTURAL ENTREPRENEUR
An agricultural entrepreneur is one who concentrates on agricultural activities
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6
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They have direct contact with customers and hence they are customer oriented
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SERVICE ENTREPRENEUR
A service entrepreneur is one who provides services to customers
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Example: An entrepreneur running a hotel or dry
cleaning unit
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TECHNICAL ENTREPRENEUR
A technical entrepreneur is one who concentrates more on production activities
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He utilizes his technical knowledge and
demonstrates his innovative capabilities
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2
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He tries to find out new strategies for marketing goods
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3
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He is interested in establishing the enterprises rather than managing
it
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the entrepreneur will sell the business to someone else
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PURE ENTREPRENEUR
A pure entrepreneur is a person who is motivated by psychological and economic factors
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Ability to handle risk, desire to enjoy better status, desire to get recognition in the society, thirst for making money motivates a person to take up entrepreneurial
activities
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INDUCED ENTREPRENEUR
Induced entrepreneur are those who takes up entrepreneurial task due to the incentives and subsides granted by the government
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3
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They emerge because of the possibility of producing and, selling new products
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4
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These entrepreneurs have self confidence and emerge as challengers
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They have great self confidence in their talent and are highly resourceful
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GROWTH ENTREPRENEURS
Take up ventures which have high growth prospects
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2
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The growth performance is visible through their liquidity of funds, profitability, and gearing
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FIRST GENERATION ENTREPRENEUR
A first generation entrepreneur is one who sets up an enterprise by his innovative skill
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He is the first person to start an enterprise on his own
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2
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He always looks for changes and responds to the changing demand of the market
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3
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He aims at maximizing profits at a consistent level
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Survival of
the firm is given more importance by these entrepreneurs
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INHERITED ENTREPRENEURS
These entrepreneurs have inherited family business or possess experience from their family business
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Others
1
...
An innovative entrepreneur is also known as modern entrepreneur
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These entrepreneurs introduce new changes and develop the business after
a certain level of development is reached
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Such kind of entrepreneurs can be seen in developed countries, as large sum of money can be
diverted towards research and development purposes
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ADAPTIVE ENTREPRENEUR
Adaptive entrepreneur is one who adopts the successful innovations of innovative entrepreneur
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These entrepreneurs can be seen both in underdeveloped and developing countries
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3
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Such entrepreneurs do
not introduce new changes
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They are very shy and stick to old customs
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4
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They refuse to utilize the opportunities and may also suffer losses
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They refuse to
introduce changes
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Sometimes they may be pushed out of the market
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These individuals are willing to take
on the risk and effort to create positive changes in society through their initiatives
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While most entrepreneurs are motivated by the potential to earn a profit, the profit
motive does not prevent the ordinary entrepreneur from having a positive impact on society
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Strong willpower, the intention to do good and a suitable approach are the driving forces
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He started collecting old clothes to
upcycle them and distribute them among the poor
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These professionals are educators who share their knowledge
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Edupreneurs consider education to be an economic resource because it impacts the perceived and actual success of educated individuals
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For example, many industries require a certain level of education for their employees
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This gives them the motivation to approach improving education as a business
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They
often work around a mission statement that guides how they operate their business and what they consider success
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Ecopreneurship is a new way of doing business
– a way to create sustainable business models, and work together with (and for) the environment
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Startups begun by ecopreneurs often use the “triple bottom line” method, consisting of:
Social bottom line – How does the business give back to the community, and help those around it in need?
Environmental bottom line – How is the impact on the environment reduced, and how can it be further improved to care for our world?
Financial bottom line – How profitable is the company, and how can these profits be used and re-invested sustainably?
By focusing on more than just financial profitability, ecopreneurs can give back to their community, protect the environment, and build a truly sustainable
business
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They are entrepreneurs who practice farming and other agriculture allied activities with an aim of
succeeding and earning profits
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They also provide financial and marketing assistance
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A woman entrepreneur is therefore a
confident, creative and innovative woman desiring economic independence individually and simultaneously creating employment opportunities for others
Need: They have made their mark in business for the following reasons: (i) They want new challenges and opportunities for self-fulfillment
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(iii) They want the change to control the balance between their family responsibilities and their business
lives
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e
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The Government of India has treated women entrepreneurs of a different criteria-level of women participation in
equity and employment position of the enterprise
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SHGs
Self-Help Groups (SHGs) are informal associations of people who choose to come together to find ways to improve their living conditions
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Villages face numerous problems related to poverty, illiteracy, lack of skills, lack of formal credit etc
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Thus SHG can become a vehicle of change for the poor and marginalized
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Benefits of SHGs
Social integrity, Gender Equity, Pressure Groups, Voice to marginalized section, Financial Inclusion, Improving efficiency of government
schemes and reducing corruption through social auditsAlternate source of employment – it eases dependency on agriculture by providing support in setting up
micro-enterprises e
...
personalised business ventures like tailoring, grocery, and tool repair shops