An Analysis of the Underlying Motives of Entrepreneurs

This report delves into the multifaceted world of entrepreneurship, examining the underlying motives that drive individuals to start and manage businesses. It begins with an introduction to entrepreneurial typology and scope, exploring different forms of enterprises, including private, public, and social ventures, as well as micro, small, and medium enterprises (MSMEs). The report analyzes the similarities, differences, roles, and characteristics of these various enterprise types, highlighting their objectives and impact on the economy. It also discusses the significance of small businesses and startups in fostering social and economic growth, emphasizing the skills and traits essential for entrepreneurial success. Furthermore, the report reflects on the entrepreneurial personality, considering how a person’s background can either hinder or foster their entrepreneurial journey. The report concludes with a summary of the key findings and insights into the dynamic and complex world of entrepreneurship.

The Underlying Motives of Entrepreneur 0
Title: The Underlying Motives of Entrepreneur
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The Underlying Motives of Entrepreneur 1
Executive Summary
This project has been summarized into seven parts. Part 1 comprises of introduction on
typology and scope of entrepreneurial activities. Part-2 comprises of different
entrepreneur forms with relevant characteristics, objectives and similarities and
differences. Part-3 gives a brief overview on how a small and micro enterprise has an
impact on the economy. Part-4 gives an overview on the Significance of Small
Businesses and Small Startups on the Growth of Social Economy. Part- 5 summarizes
the Skills and Traits Possessed by a Successful Entrepreneur. Part-6 summarizes the
reflection of entrepreneurial personality and part 7 gives an overview on how a Person’s
Background can hinder or Foster Entrepreneurship and this is followed by a conclusion.

The Underlying Motives of Entrepreneur 2
Contents
Introduction....................................................................................................................................3
P1 Entrepreneurship Scope and Typology...............................................................................3
Entrepreneurial Scope.........................................................................................................................3
Entrepreneurship Typology.................................................................................................................4
P2 Similarities and Differences, Roles and Characteristics and Objectives.......................4
P3 How Small and Micro Businesses Have an Impact on the Economy?...........................7
P4 The Significance of Small Businesses and Small Startups on the Growth of Social Economy.8
P5 Skills and Traits Possessed by a Successful Entrepreneur.............................................9
P6 The Reflection of Entrepreneurial Personality..................................................................10
P7 How a Person’s Background can hinder or Foster Entrepreneurship?........................12
Risk and Rewards of Starting a Business.......................................................................................12
Conclusion....................................................................................................................................13
References...................................................................................................................................14

The Underlying Motives of Entrepreneur 3
Introduction
An entrepreneur does not work for an employer, runs a small venture and
undertaking all the risks and rewards associated with the start-up. The entrepreneur is
commonly known as the innovator, who is a source for new ideas, businesses, goods
and services and also procedures. The entrepreneurs are known for playing the biggest
role in the economy. These are key people who are known for having requisite skills to
perform a given task. These people can measure the current and future needs and
present ideas to the market. Entrepreneurs are known for taking risks into the markets
and rewarded with continued opportunities. According to the economists,
entrepreneurship is critical to the production process and other factors of production of
being the capital, labor and resources. The entrepreneur must combine the resources to
procure goods or services. The company needs to create the typical business plan,
acquire resources and get into financing. The entrepreneur needs to take leadership as
a responsibility and business management. Entrepreneurs are faced with different
obstacles-hiring and retaining talent, obtaining the different sources of finance and
overcoming bureaucracy. The concept of capital funding is very challenging and most of
the entrepreneurs undergo bootstrapping. These entrepreneurs, finance the business
through different methods like using the own money. The entrepreneurs are also
focused on decreasing the labor costs, factoring receivables and minimizing inventory.
P1 Entrepreneurship Scope and Typology
Entrepreneurial Scope
The entrepreneurial spirit can be recognized and difficult to define. The
entrepreneurship is a dynamic integration of 4 elements-
1. Marketable innovations
2. The charisma of attracting capital for the purpose of exploration
3. The leadership capability for organizing labor and technology for production
capabilities
4. Marketing skills for distributing and selling efforts (Agarwal and Braguinsky,
2014).

The Underlying Motives of Entrepreneur 4
Entrepreneurship Typology
A comprehensive study has been done on the entrepreneurship typologies.
These are classified as under-
1. Private Enterprises –Private Enterprises play a major role in setting up
enterprise for manufacturing the products and services and commercialization of
new technologies.
2. Public Enterprises –Public Enterprises are individuals which sell companies
directly to government or directly to the public and collaborate with public leaders
for the transformation of the environment.
3. Social Enterprises –social Enterprises is use of start- up ventures to develop
the funds and implement solutions regarding the cultural, environmental and
social issues.
Based on the size, these can be classified as follows-
1. Micro Venture-In a micro venture, capital has been invested to seek the early
stage financing with emerging companies and the amount is typically lesser
when compared with the traditional venture capital.
2. Small Venture-Small business ventures are designed to grow on a limited
resources and outsourcing is the common practice among smaller ventures.
3. Medium Venture –In order to have an understanding of the medium ventures, it
is essential to find out how the venture capitalists return money to the investors.
The primary contributor is a VC and demonstrated by prevalent VC models.
P2 Similarities and Differences, Roles and Characteristics and
Objectives
Similarities and Differences between Private, Public and Social Enterprises
The private and public sectors like the social enterprises work towards the
enhancements of products and services on a continuous basis. There are certain
dimensions of similarities and differences which exist in three types of entrepreneurship
identified and these include-primary motives, accountability towards key stakeholders of
the company, approach towards risk, failure orientation. Empirical efforts have been

The Underlying Motives of Entrepreneur 5
undertaken for the entrepreneurship definition in private and public sectors. Public
sectors outsource the services through private sectors, comprising of the stabilized
financial sources and highly bureaucratic in nature. This can reduce the likelihood of
entrepreneurial spirit within the organization.
Most of the research work has been undertaken on the private entrepreneurship.
This is mainly due to innovation and a new approach towards the business problems.
Environmental complexity requires changing the firm’s strategy and organizational
structure. The private and public enterprises must adapt themselves to increased
complexity. Entrepreneurship is regarded as more complex process as it requires
service innovation. As the environmental conditions may change, systematic
entrepreneurship must be brought into the process. The public sector organizations can
produce a superior organizational performance. The entrepreneurial activity develops
through the positive rewards in the public sector and this is attributed to the recognition
of an individual’s contribution within the different groups (Szerb, 2013).
Roles and Characteristics and Objectives of Private Enterprises
1. Private property ownership
2. Consumer Independence
3. Market Forces
Roles and Characteristics and Objectives of Public Enterprises
1. Public accountability
2. Continued existence
3. Autonomy
4. Service Motive
5. Government Management and Control
Roles and Characteristics and Objectives of Social Enterprises
1. Community driven
2. Long term planning
3. Innovative and Creative

The Underlying Motives of Entrepreneur 6
Similarities and Differences between Micro, Small and Medium Enterprises
A micro enterprise is a venture where the capital investment in plant and
machinery is lesser than Rs.25 lakhs and Medium enterprise is an enterprise where the
capital investment is more than Rs.5 crores but does not exceed Rs.10 crores. Small
enterprises are non-subsidiary and independent firms which have less number of
employees and this varies across different countries. Micro, Small and Medium
enterprises engage in strategic alliances and partnerships maintain a strategic plan that
includes partnerships. MSME’s Cater to the needs of the consumer and this mainly
includes the supply chain integration. The foremost focus is on providing high quality
products and effective service.
The MSME’s need to answer the following questions-If a customer provides
multiyear contracts. The enterprises can engage in spot contracts, but this is good for
small revenues and advantages of integrated supply chain can be maximum. The
MSME (Micro, small and medium enterprises) should have the close business
association and evaluation of employee’s interaction with suppliers is must. Whether the
business documents and information has been shared between the customer and
employers? This requires successful integration, which requires sharing of information
across the different departments.
Roles and Characteristics and Objectives of Micro Enterprises
1. Fewer locations
2. Sole ownership
Roles and Characteristics and Objectives of small Enterprises
1. Few employees
2. Low profitability
Roles and Characteristics and Objectives of Medium Enterprises
1. Customer Centric
2. Strategic alliances and partnership
3. Quality focus

The Underlying Motives of Entrepreneur 7
P3 How Small and Micro Businesses Have an Impact on the
Economy?
An overview of how the small and micro businesses have an impact on the
economic growth and development of the country has been studied. The role of small
and medium scale enterprises revolves around the formulation of government policies.
The industrial plants are highly dependent on import and capital intensive. The impact of
small and micro businesses can be felt in the following manner. The firms need to
estimate the requirement of law materials and labors and mobilize the local savings.
The small and micro businesses must engage in associations with larger industries.
There is a higher provision for the regional balance and must provide opportunity for the
employments to semi-skilled workers and training the managers. The developing
countries are highly dependent on the risk taking factors of small and medium
enterprises.
The MSME density must be in congruence with the income level distribution
variables. The high income countries when compared with Sub-Saharan Africa are at
two opposite ends. The Latin America is known to have more micro and small
enterprises per 1,000 people. These countries have a high dependence on mineral
resources. The number of micro and small enterprises per 1000 people has shown a
positive increase from year 2000 to year 2009. The central Asia and Europe have
experienced the biggest boom by 20 percent. This fast pace have been resulted due to
the continuance of privatization in the economy. In the high- income generation
economies, Micro and small enterprises have denser business structure, but employ the
larger workforce. The formal enterprises have employed more than 45 percent of the
labor force and this shows the positive economic development and job creativity. These
variables highlight the significance of Micro and small enterprises to employ more than
half of the global population and contributing to 35 percent employment opportunities in
developing nations.

The Underlying Motives of Entrepreneur 8
P4 The Significance of Small Businesses and Small Startups on the Growth of
Social Economy
Start-ups are innovative and newly established ventures which have up to 10
employees. Start-ups are known to have the very informal structure and the association
with SME’s is the prime motive. During the first five years of establishment, a venture
can be considered as a start-up.
Startups have a direct relation to the economic diversity and job opportunities in
the West. If there would have been no startups, there will be no net growth in jobs. The
new and innovative technologies can create opportunities. A positive progress can
eliminate the disruption process and create a competitive advantage to generate value.
The small businesses and small startups are known to create the new communicative
technologies and enhance the efficiencies. Just imagine the number of infinite apps
which have dominated the old technologies around the globe. The market dominance is
a positive variable which emerges with innovative products and consumer needs.
Employment Opportunities
India requires 5 million jobs every 6 months and large enterprises are unable to
create the jobs. The role played by the startups is significant as these are the innovation
centers. The economy must maintain the vitality, diligent and healthy environment and
individual companies can attain the goals and objectives. Start-venture
entrepreneurship is crucial and this brings competitive dynamics into the business
world. The start-up company must implement the best possible functional model which
is the best fit for its products and services in the market. The large corporations follow a
disruptive route due to the answers to the number of stakeholders. The corporate
governance and CSR are the two facets of any organizations which must be adhered to.
A company’s director has a voice in the crucial decisions and management of the
company.
The Agile Startups-
The new ventures work in a changing environment and try to maximize the
revenue through innovation. Startups are agile in nature and encourage forward
linkages that can help in stimulation of economic development process. The startups

The Underlying Motives of Entrepreneur 9
can act as the changing catalytic agents and this result in the chain reaction. As soon as
an enterprise has been established, the industrialization process to be set forward. This
in turn generates demand for the products and services. This can be illustrated through
the help of an example-At present, India has more than 2000 conventional handicraft
groups ranging from various skills to wooden industries. This industry employs more
than 15 percent of the total population.
The developed countries are looking for some of the ways through which
untapped potential can be tapped from the markets. There are different countries which
are taking initiatives to associate with Indian startups. The startups require huge foreign
funds which can help in boosting the country growth. At present, India is home to more
than 5000 startups and this will contribute to the generation of 2 lakh jobs every year.
The developing nations have been launching campaigns which can facilitate the role of
startups in an economy.
P5 Skills and Traits Possessed by a Successful Entrepreneur
A successful entrepreneur has certain skills and traits which sets it apart from
others. These are enumerated below-
1. Leadership Skills-This is an essential quality possessed by the entrepreneur. A
leadership style can inspire the change and involve business teams and groups
to perform for the achievement of goals and objectives. The entrepreneur must
be able to manage the teams and employees. Business organizations must be
able to meet with the goals and capacity to guide the community.
2. Risk Taker-An entrepreneur must be the risk taker. The economic viability of a
business is largely dependent on the ability of the company’s management to
drive the growth and result in profitability. A company must embrace all the
challenges and deal with unknown variables. The startup must be engaged in the
formulation of the plans and effectively deal with resource optimization.
3. Technological Innovation-This is an age of digitalization and the market factors
favor the process of innovation. The startups need to develop the capacity to
create a difference in the markets and this is effectively possible through the

The Underlying Motives of Entrepreneur 10
social media platforms. In today’s world, digital marketing is crucial and social
media platforms must be focused towards the enhancement of business brand.
4. Accountancy skills-The startups need to manage the money effectively. The
CFO of the company needs to control and involve with crucial decision making
concerned with money. The company must have the capacity to raise funds and
what the investments can do for the business and economy.
5. Competitiveness and Communication-The top management needs to
communicate with middle management and lower management. The effective
communication technologies must be used for creating the positive impact.
Competitiveness with industry rivals revolves around a positive vision for
changing the things in society.
P6 The Reflection of Entrepreneurial Personality
The concept behind the reflection of entrepreneurial personality is relevant to
situational understanding. The entrepreneurs need to have the understanding of
opportunity recognition. Every entrepreneur has a different set of characteristics and the
concept of being accurately ‘fit’ is largely dependent on the different key players. The
strengths, shortcomings, benefits of a founder are taken into account. However, it must
be noted there is no concept behind the existence of perfect entrepreneur. Significantly,
there are growth minded entrepreneurs who possess the desirable characteristics.
Opportunity recognition process within an individual personality is a cognitive construct
that requires a behavioral pattern which may not be a trait.
The entrepreneurs operate with a given framework of time and this requires
domain related information which enables the individual to identify the opportunities.
What is an important quality of opportunity recognition? Most of the developments into
entrepreneurship personality are theoretical. The entrepreneurs can optimize the
resources. Entrepreneurial self-efficiency is an explanatory variable which determines
the strength of an individual and how this will have an impact on the future course of
actions. What is the association which exists between the behavior and intentions? In
order to complete the actions as decided by intention, a behavior control is a must. This
process is close to self-determination. These are beliefs which can be strengthened in

The Underlying Motives of Entrepreneur 11
different ways. The mastering of psychological state (Like emotional attachment) can
enhance the reduced performance. Social learning has two variations-perceptions and
attitudes and these must be resolved so as to have a brief concise of pursing the
intended activities.
An entrepreneur interested into different skill areas like innovation, management,
financial control and need to find answers to make high revenue at market.
Entrepreneurs have demonstrated innovation and risk taking are two factors which need
to be differentiated. The researchers are of the order which suggests Entrepreneurial
self-efficiency requires potential and must also deal with the issues of instability. There
are few complex issues which must be addressed when the association between the
performance and Entrepreneurial self-efficiency is reviewed.
The Entrepreneurial self-efficiency is majorly affected through the Entrepreneurial
performance. However, an enterprise may have models for testing the associations. A
practical implication is to provide training to new entrepreneurs and what is the cognitive
belief system of them. The researchers have studied the impact of the environment on
Entrepreneurial self-efficiency. The industry has its own regrets and which are different
from the non-entrepreneurs. Self –efficiency and perseverance are two variables which
must be recognized with earned income and cost. The Income generated is one of the
variables which decide the personal success. There are certain implications of the idea
behind new entrepreneurs which respect for the principle of self-efficiency. The training
must be provided to categorize entrepreneurial construct, especially when whole startup
tenure is considered. The business management and entrepreneurship must be
considered two different activities. An entrepreneur must reflect the difference while
undertaking the management decisions and business decisions.
P7 How a Person’s Background can hinder or Foster
Entrepreneurship?
Entrepreneurship is influenced through the different variables. These are
education, culture and technological development taking place within the society. The
environmental conditions have a strong influence over the person’s background and this

The Underlying Motives of Entrepreneur 12
is directly proportional on hindering or fostering the entrepreneurship. The emergence of
entrepreneurship can be termed as positive and requires consistent entrepreneurial
growth. The Fostering of entrepreneurship is possible through the conducive and
facilitate environmental conditions and this induces emergence of entrepreneurship.
The negative influences include the inhibiting environmental resources and thereby
hindering the process of entrepreneurship.
People who are traditionally engaged in family businesses have an employee
attitude and most of them fall outside the establishment. The present job market has the
strong independence culture. The consumerism culture encourages entrepreneurship
and develops the spirit of innovation.
Risk and Rewards of Starting a Business
When an entrepreneur starts a new business, he or she is not aware of the
duration the business will take to turn into profitability. Due to the fluctuations in the
economy and consumer trends can have a lot of impetus to the business as a whole.
When starting the new business, the industry experience is must. Long hours of work
may be required to be done by the individuals and may not enjoy working in the
disciplines which have new realms.
The reward associated with the startups includes the income. Costs must be
controlled to a reasonable extent. The autonomy and security which are accompanied
with the starting of a new business model is high. The entrepreneurship requires
mastering the art of every discipline and striking a perfect balance between the
objectives of the venture and government.
Conclusion
Planning an entrepreneurial business will provide you with all the rewards that a
successful entrepreneur is searching for. The mitigation of risk is possible by the
evaluation of strategic alternatives. The entrepreneurship, business can succeed in next
5 years, but may have the original business model. The entrepreneurs need to focus on
the independent business and build the long term and real value for money. The
enterprise needs to be involved with retention of employees and resource optimization.

The Underlying Motives of Entrepreneur 13
If a start-up is able to generate the consistent income for a period of 5 years or more,
and recover the original investment, then it can be a successful venture.

The Underlying Motives of Entrepreneur 14
References
Agarwal, R. and Braguinsky, S. (2014). Industry Evolution and Entrepreneurship:
Steven Klepper's Contributions to Industrial Organization, Strategy, Technological
Change, and Entrepreneurship. Strategic Entrepreneurship Journal, 9(4), pp.380-397.
Szerb, L. (2013). The Comparison of the Global Entrepreneurship Monitor and the
Global Entrepreneurship and Development Index Methodologies. Foundations and
Trends® in Entrepreneurship, 9(1), pp.1-142.