Unit 4 Entrepreneurial Skills (Employability Skills)

A. Here are some stories of some entrepreneurs. Tick the option for the quality they are showing.

1. Ravi’s customer comes to his store and starts shouting at him. He does not get angry. He listens to what his customer is saying.
He is...........................

(a) hardworking
(b) confident
(c) patient
(d) prying new ideas
2. Susheela decides to sell her company tyres in Sri Lanka. It does not sell and she has a loss. She apologises to the people who
work for her. She says she will plan better next time. She...............................

(a) takes responsibility for your mistakes

(b) thinks before making a decision
(c) does not give up
(d) is creative

B. Tick the correct option for the function that the entrepreneur is doing.

1. Ali has a diamond factory. He pays his employees on the 1st of every month.

(a) Creates a new product

(b) Manages the business
(c) Takes risk

2. Mary buys bulbs for her business from Noida. She learns that bulbs are cheaper in Faridabad. So, she decides to start buying
bulbs from there.

(a) Makes decisions

(b) Divides income
(c) Takes risk

3. Rehnuma has two people who work for her. Every day, she spends one hour with them to learn about what they’ve done that
day.

(a) Creates a new product

(b) Divides income
(c) Manages the business

C. Write against the option, if the business idea is of self-employment or wage employment.

(a) Cooking in a restaurant Ans. Wage Employment

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(b) Owning a clothing business Ans. Self Employment

(c) Having a dosa selling stall Ans. Self Employment

D. Write True or False

1. Entrepreneurs can create jobs in the market. True

2. When many entrepreneurs sell mobile phones in a market, the prices of phones increase. False
3. Entrepreneurs identify a need in the market and build a product or service for it. True

E. Multiple choice questions.

Q1. Which of the following characteristics should an entrepreneur have?
(a) Innovativeness
(b) Motivator
(c) All of these
Ans. (c) All of these
Q2. Which of the following is a disadvantage of entrepreneurship as a career?
(a) Uncertainty
(b) Independence
(c) Ambition fulfillment
Ans. (a) Uncertainty
Q3. Which of the following are the functions of an entrepreneur?
(a) Innovation
(b) Risk-taking
(c) All of these
Ans. (c) All of these
Q4. Which of the following is an advantage of entrepreneurship as a career?
(a) Risk
(b) Hardwork
(c) None of these
Ans. (c) None of these
Q5. The decision-making function of an entrepreneur includes:
(a) Hardwork
(b) Risk bearing
(c) Utilisation of financial resources
Ans. (c) Utilisation of financial resources
Q6. 'An entrepreneur has to get the work done through others.' Which characteristic of the entrepreneur does this statement
depict?
(a) Motivator
(b) Organiser
(c) Innovator
Ans. (a) Motivator

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Answer the following questions. (VSA 1M)
Q1. What is meant by an entrepreneur?
Ans. An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The
entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.
Q2. State the main characteristics of an entrepreneur.
Ans. Characteristics of an Entrepreneur: Leadership, risk-taking, innovativeness, goal-oriented, decision-maker, highly optimistic,
motivator, self-confident, action-oriented, dynamic agent, high achiever, trust in self.
Q3. State/List the functions of an entrepreneur.
Ans. The function of an Entrepreneur: Innovation, risk-taking, decision-making, organization and management, size and scale of
Business unit, the appointment of Managerial and another workforce, to arrange for factors of production and establishing
coordination, Procuring raw material and machinery, control and direction, finding a suitable market, new inventions, establishing
relations with government, establishing contacts with competitors.
Q4. Who is an entrepreneur?
Ans. An entrepreneur is an individual who sets up business or businesses, identifies and solves problems, creative, innovative,
opportunist, risk-taker, self-starter, and open-minded with the hope of making a profit from the enterprise.
Q5. Explain briefly Innovation as characteristics of an entrepreneur.
Ans. Innovativeness: Customer's requirements and tastes keep on changing, therefore, production should meet the customer's
requirements. Thus, innovativeness is another important characteristic of an entrepreneur. He always tries to out strive others by
taking initiative in doing new things, i.e., exploring new products, new markets, new raw materials, new methods of production, etc.
Q6. Give two advantages of entrepreneurship as a career.
Ans. Advantages of Entrepreneurship as a Career: Independence, ambition fulfillment, excitement, freedom, wealth creation, and
status.
Q7. (a) State two disadvantages of entrepreneurship as a career.
Ans. Disadvantages of Entrepreneurship as a Career: Risk, hard work, uncertain income, the problem of finance, and incompetent
staff.
(b) What do you mean by Entrepreneurship?
Ans. Entrepreneurship is the organizing an enterprise to undertake a new production process, raising capital, arranging labour and
raw materials, etc.

B. Short answer questions. (SA 2M)

Q8. What are the various functions of an entrepreneur?

Ans. The various functions of an entrepreneur may be classified and described as under
1. Innovation: It includes (a) Introducing new products, (b) Opening new markers (c) New sources of raw material, and (d) New
organization structure.
2. Risk-taking: Choosing one among various alternatives, the end results of which are unpredictable.
3. Decision making: Includes: (a) Stabilising organization's aims and objective and changing them according to changing conditions
or to make the most profitable, (b) Division of work among subordinates, (c) Utilisation of financial resources, (d) Taking decisions
on effective techniques, (e) Selling the produced as per the demand of customers, (f) Relationship with social functionaries.
4. Organisation and management: To organize and manage various economic human factors. Under this category, the following are
his functions: (a) Planning the enterprise, (b) Coordination and control, (c) Supervision, and (d) Direction

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5. Size and scale of business unit: To decide about the size of a business unit, i.e. wants to establish one production unit or more,
etc. which is dependent on the demand of the product. Similarly, he has to decide about the scale of productivity i.e, small scale,
middle scale, or large scale.
6. Appointment of managerial and another workforce.
7. To arrange for factors of production and establishing coordination, i.e., land, labor, capital, etc. in appropriate proportion and to
maximize output by best utilization of these factors after coordinating them.
Q9. Discuss the importance of entrepreneurship.
Ans. Role and Significance / Importance of Entrepreneur: Enterprising man, great achievers, reinvesting organizations, job
creation, first movers, higher productivity, visionary leader, economic prosperity, the backbone of the capitalist system, protector of
society's interest, catalytic agent, an ingredient of a modern production system.
Q10. State five myths of entrepreneurship.
'OR'
What are the myths about entrepreneurship?
Ans. Myths of entrepreneurship
1. It is easy to start a business: In reality, starting a successful business is a very difficult and challenging process. The rate of failure
of new ventures is high. Even after a period of seven years, only one-third of the enterprises are profitable. However, it is relatively
easy to start a very small business than a large company.
2. Lot of money is needed to start a new business: A business can be started with limited money. For example, Infosys Technology
was started with only 10,000. In the beginning, you can hire space and equipment.
3. A Startup cannot borrow from banks: Under various schemes like MUDRA, budding entrepreneurs also can raise loans from
banks.
4. Talent is more important than an industry: The nature of the industry an entrepreneur chooses has a great effect on success and
growth. For example, if you enter an industry wherein competition is cutthroat or materials are scarce, you may fail.
5. Most startups are successful: A large percentage of startups fail. The average profit of an owner-managed firm is 20,000 per
month. A very few entrepreneurs earn more than employees.
Q11. Describe six advantages of entrepreneurship as a career.
Ans. The main advantages of adopting entrepreneurship as a career are as follows:
1. Independence: An entrepreneur is his own boss. He can take all decisions himself. He need not obey someone.
2. Ambition - Fulfillment: Some people want to convert their original ideas into a new product or service, for example,
smartphones, electric vehicles, driverless trains, etc.
3. Excitement: Entrepreneurship involves adventure. Some people resign from their well-paid jobs and launch their own venture
due to excitement.
4. Freedom: Entrepreneurship allows the freedom to try out one's ideas. Freedom-seeking people choose entrepreneurship as a
career.
5. Wealth Creation: Successful entrepreneurs create enormous wealth for themselves and their staff.
6. Status: Success in entrepreneurship brings considerable fame and prestige. Narayana Murthy, Sunil Mittal, Rana Kapoor, Subhash
Chandra, and other successful entrepreneurs are known all over the world.
Q12. Describe five disadvantages of entrepreneurship as a career.
Ans. Disadvantages of Entrepreneurship as a Career:
1. Risk: Entrepreneurship involves a considerable risk of loss. Failure can wipe away all the personal savings and lead to a
considerable debt - burden.

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2. Hard Work: An entrepreneur has to work very hard to make the new business successful. His work schedule is unpredictable and
he has to work late hours. Spouse and children may have to suffer due to his very busy work schedule.
3. Uncertain Income: No fixed and regular income is available to an entrepreneur. During the startup stage, it may be difficult even
to meet household expenses.
4. Problem of Finance: Raising the necessary funds is very difficult for a first-generation entrepreneur.
5. Incompetent Staff: A new entrepreneur may not be able to hire and retain qualified and experienced employees. The
administrative burden is heavy and faulty decisions can be very harmful to the business.

Q13. List the ways in which an entrepreneur affects a society.

Ans. The ways in which an entrepreneur affects a society are:

Fulfill Customer Needs: Entrepreneurs find out what people want. Then, they use their creativity to come up with a business idea
that will meet that demand.

Use Local Materials: Entrepreneurs use the material and people available around them, to make products at low cost.

Help Society: They make profits through activities that benefit society. Some entrepreneurs work towards saving the environment,
some give money to build schools and hospitals. This way, the people and area around them becomes better.

Create Jobs: With the growth of a business, entrepreneurs look for more people to help them. They buy more material, and from
more people. The also hire more people to work for them.

Sharing of Wealth: As entrepreneurs grow their business, the people working for them and in related businesses also grow.

Lower Price of Products: As more entrepreneurs sell the same product, the price of the product goes down. For example, when
more mobile phones were getting sold in India, the cost of the phone became lesser.

Q14. What is the difference between a misconception and reality? Give an example. Ans. The difference between misconception
and reality are:

Misconception: A myth, or a misconception, is a false belief or opinion about something. For example, if we think tall people run
faster than short people, we have a misconception. It is not true. The truth is that short people can also run fast.

Reality: Reality is the state of things as they actually exist, rather than as they may appear or might be imagined. In other words
reality includes everything that is and has been, whether or not it is observable or comprehensible.

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