Entrepreneurial Skills
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# Definition and Scope
* What is Entrepreneurship?
It is a type of self-employment where an individual runs a business to satisfy people's needs and seeks ways to improve the business and make profits.
* Career Options: There are two main ways a person can earn a living: Self-employment (e.g., a doctor running their own clinic) or Wage employment (e.g., a doctor working for a hospital).
# Qualities of Successful Entrepreneurs
Successful entrepreneurs demonstrate several key traits:
* Confidence and Belief: They are confident and believe in themselves and their abilities. They must believe in themselves and be confident in taking business decisions.
* Patience and Optimism: They are patient. They should also be patient and optimistic.
* Creativity and Innovation: They are creative and think differently about business ideas. They must have a creative and different solution to a problem. They keep trying new ideas in their business.
* Perseverance: They work hard and do not give up when they face a difficulty. They should not be disappointed if a certain idea does not work.
* Responsibility and Decision-making: They take responsibility for their actions and make decisions after careful thought.
# Functions of an Entrepreneur
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Entrepreneurs perform five crucial functions in their business:
1. Making Decisions: This includes deciding what to produce or sell, how much to produce/sell, and where to sell it.
2. Managing the Business: They plan the future of the business, arrange for raw materials, hire people for work, and ensure everyone knows their duties. They also check if the plan is being followed.
3. Divide Income: They divide the business money into groups for various purposes, such as buying material, paying rent, and paying salaries to people.
4. Taking Risk: Risk is the chance of something going wrong. An entrepreneur takes risks against threats like fires, lost items, and theft.
5. Create a New Method, Idea, or Product: An entrepreneur constantly tries new things to increase the importance and income of the business.
# Impact on Society and Customers
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Entrepreneurs fulfill crucial roles in society:
* Fulfill Customer Needs: They find out what people want and use their creativity to meet that demand.
* Resource Utilization: They use local materials and people available around them to make products at a low cost.
* Social Responsibility: They maintain a positive relationship with society.
* Job Creation: With the growth of the business, entrepreneurs seek more people to work for them, thereby creating jobs.
* Sharing of Wealth: As entrepreneurs grow their business, the people who work for them gain experience.
* Lower Price of Products: When more entrepreneurs sell the same product, the price of the product generally goes down.
# Entrepreneurship Career Process
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A person who becomes an entrepreneur goes through a career process consisting of three stages:
1. Enter: The entrepreneur is just starting and entering the market to do business (e.g., Sanjana starting a small grocery store).
2. Survive: The entrepreneur must remain in a competitive market. They must ensure their store survives competition and does well, often leading to small expansions.
3. Grow: Once the business is stable, the entrepreneur expands or hybridizes the business (e.g., Sanjana opens a chain of four more grocery stores and plans to expand to other cities).
# Myths about Entrepreneurship (Misconceptions)
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There are several common misconceptions about entrepreneurship:
1. The belief that every business idea needs to be unique or special.
2. The belief that a person needs a lot of money to start a business.
3. The belief that only a person having a big business is an entrepreneur.
4. A misconception is that entrepreneurs are born, not made.
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# A. The Difference Between Wage Employment and Entrepreneurship
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While both self-employment and wage employment allow a person to earn a living, entrepreneurs have the unique responsibility of job creation.
* Wage Employment (The Worker): A person accepts a predetermined role and salary. Their risk is relatively low.
* Self-Employment (The Entrepreneur): This person defines the roles for others and takes all financial risks associated with the business. They are the driving force that contributes to the Gross Domestic Product (GDP) of the local area by creating job opportunities and sharing wealth.
## B. Understanding Risk (Taking Calculated Risks)
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The notes identify "Taking Risk" as a core function, citing examples like fire, theft, and lost items. For a 10th-grade perspective, it's important to differentiate between reckless behavior and calculated risk:
* Calculated Risk: This is when an entrepreneur anticipates potential problems (like theft or fire) and proactively uses strategies—such as purchasing insurance or creating a contingency fund (part of Dividing Income)—to manage and mitigate those risks. Taking calculated risks is crucial for innovation.
* Operational Risk: This covers day-to-day threats like theft or system failure. A strong entrepreneur manages these risks through effective planning and control (part of the Managing the Business function).
## C. Entrepreneurship and Local Economic Development
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The case study of Bharti (The Jewellery Queen) demonstrates how micro-entrepreneurship impacts the local economy:
* Supply Chain Development: Bharti uses local materials (jute) and buys from a retired woman, creating a new source of income for that supplier.
* Poverty Reduction & Savings: By hiring three more women, Bharti ensures that these individuals can now earn more money and are able to save money for their future. This shows that entrepreneurship is a powerful tool for social upliftment and wealth distribution.
## D. Debunking Myths: Skills vs. Capital
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The misconceptions that an idea must be unique or require a lot of money directly contradict the qualities of perseverance, creativity, and finding solutions.
* Idea vs. Execution: While a unique idea is helpful, the notes emphasize that entrepreneurs are successful because they keep trying new ideas and work hard. This means execution (the process of turning an idea into reality) and adapting to market needs are more important than the initial uniqueness of the idea (e.g., Sanjana starting a grocery store, which is not a unique idea, but surviving and growing requires skilled management).
* Entrepreneurs Are Made: The myth that entrepreneurs are "born" is countered by the list of qualities that can be developed, such as patience, responsibility, and confidence. These are learned skills essential for moving from the 'Enter' stage to the 'Survive' and 'Grow' stages of a career.