ENTREPRENUAL SKILLS

Question 1

Q1. What is a Business?

Answer 1

A business can be understood through different means but the basic features of any business are remain the same and they are as follows:

1. Business is a trade-related activity.
2. It involves the purchase and sale of goods or services.
3. Business is done to earn profits and therefore it is referred to as a source of income.
4. Business is mainly run to maximise profits by creating value for customers through goods or services.

Question 2

Q2. Classify different types of businesses?

Answer 2

There are different types of business engaged in different sectors of the economy.

1. Service: These are the businesses which deal in providing of services e.g. banking, transportation, accounting, education, healthcare, insurance etc.
2. Manufacturing: These are the businesses which deal in the production of goods.
3. Merchandising: These are the businesses that do not produce the goods themselves but purchase the goods for selling it to end-consumers. They act as the link between the producers and consumers. Some examples of such businesses are retail stores, departmental stores and distributors.
4. Hybrid: Hybrid businesses are the mix of two or more types of businesses. They are engaged in service as well as manufacturing business. They neither offer pure intangible nor pure tangible commodities. For example in the case of restaurants, they offer services in the form of a dining experience and food served is the product.

Question 3

Q3. Which are the different forms of business organisations?

Answer 3

Business organisations are classified under different forms based on their type of ownership.
FORMS OF BUSINESS: -
1. Sole proprietorship:

2. Partnership:
3. Joint Hindu Family Business(HUF)-
4. Cooperative Society:
5. Joint-Stock Company-

Question 4

Forms of Business

Answer 4

1. Sole proprietorship: A sole proprietorship is the simplest form of business organisation with only a single owner.
2. Partnership: A partnership firm is a business entity owned and operated by two or more individuals for the purpose of earning profits. Each individual in the firm is called a“Partner” and collectively it is called a “Firm”.
3. Joint Hindu Family Business(HUF)- It is a form of a business entity owned and operated by the members of a joint Hindu family. It is governed by ‘Hindu Law’ and is only prevalent in India. It is also known as ‘Hindu Undivided Family Business’ or HUF – business.A family where all members are descendants of a common ancestor is called a Hindu undivided family. It includes the male members, their wives and unmarried daughters.
4. Cooperative Society: “Co-operative society is a society which has the objective of promoting the economic interests of its members in accordance with cooperative principles. It is a voluntary organisation of individuals to promote a common interest. A registered co-operative society enjoys the benefits of tax-exemption
5. Joint-Stock Company- A Joint-Stock company is an organisation of the individuals or a group of individuals to undertake some industrial, trading or commercial activity with a motive for earning profits . There are two kinds of companies – Private Company and Public Company

Question 5

Q4. Who is an Entrepreneur?

Answer 5

The word “entrepreneur” is derived from the French verb ‘enterprendre’ which means ‘to undertake’ . entrepreneur is the one creates something new, organizes production and handle uncertainties and risk involved in running the busines

Question 6

Q5.What is Entrepreneurship?

Answer 6

The process of creating business enterprises is called entrepreneurship. It is the act of establishing and managing a new enterprise while undertaking various risks and rewards associated with it . It involves the way in which an entrepreneur thinks and acts

Question 7

Q6. List the different types of entrepreneurs.

Answer 7

These entrepreneurs have been classified into different types based on the qualities and work culture they adopt.

1. Innovative entrepreneurs:These are the entrepreneurs who take the route of innovation for their enterprise.
2. Imitative or Adoptive entrepreneurs: These are the entrepreneurs who adopt the already introduced innovations of the innovative entrepreneurs.
3. Fabian entrepreneurs : These are the entrepreneurs who prefer to change things only in circumstances when they are incurring losses.
4. Drone entrepreneurs: These are the entrepreneurs who will not change under any circumstances even if they are incurring losses. They follow the traditional methods of business and do not adapt at all.

Question 8

Q7.Describe entrepreneurial management?

Answer 8

Effective management of an enterprise is the most important role of an entrepreneur. Poor management may lead to failure of the business. Thus, managing an enterprise requires policies on four major areas

i. Need for an environment which is suitable for innovation and adaptable to changes.
ii. Systematic measurement of performance of the business and finding ways to improve performance.
iii. Well-built organizational structure with the focus on policies for staffing and compensation and reward structure.
iv. Innovation does not take the focus away from the existing business model. Innovation should be in line with existing business

Question 9

Q8.What is the role of entrepreneurship in Economic Development

Answer 9

Economic development is one of the most important agenda of a country. Economic development means the development of agriculture and industry in the country leading to a rise in GDP.

Entrepreneurs adopt the following roles for the purpose of economic development:

1. Coordinating role:
2. Agent’s role: Entrepreneurs are perceived as ‘Agents of Change’.
3. Innovator’s Role
4. Risk assumption role 5. Imitating role
5. Capital formation role: Entrepreneurs enable the formation of capital by mobilising the idle savings for the purpose of carrying on business.
6. Balancing role
7. Status transformation role
8. Employment Generation role