These AI Class 9 Notes Chapter 4 Entrepreneurial Skills Class 9 Notes simplify complex AI concepts for easy understanding.
Class 9 AI Entrepreneurial Skills Notes
Introduction Class 9 Notes
- Business is an economic activity related with continuous and regular production and distribution of goods and services for satisfying human needs.
- Businesses can be for profit entities or non-profit entity or organisation. Profit entities is one whose main goal is to make money. Non-profit entity or organisation usually have other non business goals, such as helping the community.
- But sometimes, there is a gap between what is needed and what is available. This gap is used by some people as an opportunity by providing necessary products and services. Such people are called entrepreneur.
- In other words, an entrepreneur is a person who is self-employed, is willing to take a calculated risk and brings in a new idea or method to start a business.
- But, all self employed person are not entrepreneurs. A shopkeeper cannot be called an entrepreneur unless he uses a new idea or method in the business.
Types of Business Activities Class 9 Notes
Broadly a business can belong to one of the following categories:
(a) Product Business A business where a seller and buyer exchange an item, which can be seen and touched, is called a product based business. For example, A sports shop.
(b) Service Business A business where a seller helps the buyer to finish some work. For example, A cricket coaching centre.
(c) Hybrid Business A business in which both product and services are sold is referred as Hybrid business. For example, Restaurants where the food itself is the product sold and the catering is the service provided.
Differences between Product and Service Business
The key differences between product and service business activities can be summarised as follows:
| Categories | Product Business | Service Business |
| Seen and touched | Product can be seen and touched. Customer pays for physical exchange of thing under this business. | Service cannot be seen or touched. Customer pays for an experience under this business. |
| Stored | Product can be made and stored. | A service cannot be stored. |
| Mode and transported | Product can be made at home or factory. It can be transported. | A service cannot be made or transported. |
| Same quantity and quality | The quality and quantity of the product will be same every time. | The quality and quantity of a service can be different at different times under this business. |
Types of Product Based Business
There are two types of product based business:
(a) Manufacturing Businesses In manufacturing businesses, products are first made in factories and then sold in market.
(b) Trade Businesses In trade businesses, products are transported from factory to warehouses and shops near to customers where trade businesses buy and sell a product. Examples of these business include wholesalers, distributors and retail shops.
Types of Businesses in Our Community
Based on size:
- Micro Enterprise A micro enterprise is a business enterprise where the investment in plant and machinery or equipment is not more than INR 1 crore and turnover does not exceed INR 5 crores.
- Small Enterprise A small enterprise is a business enterprise where the investment in plant and machinery or equipment is not more than INR 10 crore and turnover does not exceed INR 50 crores.
- Medium Enterprise A medium enterprise is a business enterprise where the investment in plant and machinery or equipment is not more than INR 50 crore and turnover does not exceed INR 250 crores.
Based on legal form
Sole Proprictorship In a sole proprietorship, the ownership and control of the business is with one single person, and the liability of the owner is not separate from the entity.
One Person Company A One Person company also has only one person as a member, who acts in the capacity of both, a shareholder and a director, but an OPC is legally separate from its owners. There is no threat on the owner’s personal property in case of unmet liabilities.
Partnership Partnership is a legal form, where at least two people, or more start a business as co-founders or co-owners and divide the share as per agreement. The partners are personally liable for an unlimited amount of liabilities.
Limited Liability Partnership In a Limited Liability Partnership, there are two or more partners. In this, no one single partner or owner is individually responsible for any other partner’s or member’s negligence or misconduct or liability.
Company A company is defined as a legal entity formed to get engaged in business, by a group of individuals. Usually, these individuals have limited liability, and the capital in units of equal value of a company are called ‘shares’. Company can be public or private.
Based on sector
- Primary Sector This sector includes businesses that involve extraction, retrieval, harvest and production of raw materials using natural products from the earth.
- For example, some raw materials include coal, wood, grains, iron, corn etc. Thus, some primary sectors include mining, agriculture, fishing, horticulture etc.
- Secondary Sector The main activity of businesses in this sector is transformation of raw materials into finished goods. It takes products from primary sector and organizes all factors of production to make utility as well as luxury products.
- Tertiary Sector This sector is defined by provision of services to businesses and customers. It is completely based on a service and there is no production of goods involved.
Entrepreneurship Class 9 Notes
The process of developing a business plan, launching and running a business using innovation to meet customer needs and to make profit is known as entrepreneurship.
Ideas created by an entrepreneur can be of many kinds; new types of products, new services e.g. home delivery, credit services, new marketing ideas, cost reduction ideas, etc.
An enterprise is a project or undertaking that is bold and fulfills need and wants of the society which no longer has ever addressed.
Entrepreneurship Development
It involves enabling entrepreneurs through institution-building learing \& development programs and structured training. Largely, the objective of these programs is to empower budding entrepreneurs to start and run their business effectively and efficiently. These programs cover aspects of entrepreneurial skills, business planning, fundraising, setting up of a new venture and growth & development strategies.
Role of Entrepreneurship
Capital Formation Entrepreneurship leads to value addition andi creation of wealth, because entrepreneurs promote capital formation by mobilising the idle savings of public.
Employment Generation There is potential for increase in large-scale employment opportunities with increase in entrepreneurial activity. As more enterprises, offices, factories, businesses, trading entities etc. are set up, numerous job opportunities are created for skilled, unskilled and unemployed people, especially in developing countries.
Balanced Regional Development Entrepreneurship helps to remove regional disparities through setting up of industries in less developed and backward areas. Micro businesses and cottage industries also play a role in increasing entrepreneurial activity in many specific cultural regions.
Value Creation Value creation occurs when the worth of products and services increases for a customer base and a business earns profit by selling the product or service to fulfil customer needs and wants. Value is created when outputs are more valuable than inputs. Value creation is the foundation of every entrepreneurial activity or business.
Wealth Distribution Wealth and income are distribution across people and geographies due to entrepreneurship and transaction-based activities. Employees are paid saltaries, vendors are paid for their supplies, goods are sold in multiple markets, services are provided at large scale etc. This stimulates distribution of wealth to larger sections of society.
Industrialization and Development Establishment of even a single enterprise can lead to beginning of a new industry. In a specific region, if a business is set up and seen to be a profitable opportunity, it is likely that others will get motivated to set up similar businesses. Additionally a business might require certain inputs, which leads to setting up of businesses that can supply those inputs. Hence, entrepreneurship catalyses industrialization in almost a chain reaction form, which in turn contributes positively to economic and infrastructural development.
Rewards of Entrepreneurship
Economic Development Some features of economic development include optimal use of resources, creation of new ideas, wealth generation, continuous flow of money, skill building etc. All these factors are enabled due to entrepreneurship and are essential for economic development of a nation.
Enterprise and Business Creation Business creation is a direct result of entrepreneurship. Many types of enterprises can be created by coordinating and combining different types of resources such as physical, financial, human, intellectual and entrepreneurial skills such as risk taking, innovation, leadership, resource planning etc.
Capacity Building Skilled development and training is a significant reward of entrepreneurship as an entrepreneur invests in training employees and building their managerial capabilities. Similarly, an entrepreneur also develops his/her own capabilities by solving problems, making decisions, embracing failures, experimenting with alternative approaches etc.
Improved Standard of Living With entrepreneurship, customers have many options of choosing from different products and services to solve the same purpose. This variety and availability of improved goods and services offered by enterprises leads to higher standards of living.
Qualities of a Successful Entrepreneur
An entrepreneur needs to have the following set of qualitites:
(a) Patience Success may not be achieved quickly. It is important for an entrepreneur to have patience while running the business.
(b) Positivity When people starts a business, they may face lots of difficulties and failure. An entrepreneur should stay positive and continue to work hard to achieve this goal.
(c) Hardworking Every new business goes through failures and therefore, an entrepreneur needs to work hard till he becomes successful.
(d) Never Giving up and Perseverance It is necessary for an entrepreneur to continuously work hard towards his own and company’s goals. The entrepreneur must not give up even he/she suffers failure. He/she must demonstrate perseverance and work hard to achieve his/her goal.
(e) Confidence An entrepreneur needs to be very confident while taking decisions about his business. $\mathrm{He} /$ she also needs to communicate confidently with the customers.
(f) Open to Trial and Error Entrepreneur needs to be open to new ideas and try them without fear of failure. Entrepreneur will have to use trial and error method while starting a business. He/she should also experiment with different ideas in order to become successful.
(g) Creativity and Innovation An entrepreneur should come up with original and creative solution to a problem after analysing it with various prospective. They should also be able to recognise an opportunity in a problem and find an innovative solution.
(h) Risk Bearing An entrepreneur should be willing to take a calculated risk and is always open to new idea to make his/her business grow.
Distinguishing Characteristics of Entrepreneurship and Wage Employment Class 9 Notes
Entrepreneurship means, organising, developing and managing a business venture along with any of its risks in . order to make profit.
Profit The profit earned is the excess of earning. It is calculated by deducting all expenses from earning.
Risk A risk is situation where result is unknown and may lead to a loss in future. Entrepreneurship is not without risks but entrepreneurs are not afraid of taking calculated risks. Risk may result in failure, however, entrepreneurs continue their courses of action till they succeed.
Characteristics of ‘Entrepreneurship
Some of the distinguishing characteristics of entrepreneurship are:
- Risks taking nature.
- Believe in hard work and discipline.
- Entrepreneurs show adaptability and flexibility in achieving the goals and customer satisfaction.
- Knowledge of the product and services as per demand in market.
- Financially literate and has money management skills.
- Effective planner and executes efficiency.
Wage Employment
Wage employment is always consist of two parties. One is known as the employer and other is the employee. The continuity of the service in case of wage, employment depends on the terms and conditions laid down in the contract between these two parties. Continuity of service also depends upon the relationship between these two parties.
Difference between Entrepreneurship and Wage Employment
- An entrepreneur is the business owner and an employee is the worker and get a salary.
- An entrepreneurs are self-employed while the employees are wage earner.
- An entrepreneur work for self but wage earners work for others and get a salary for his work.
- The wage employment does not involve too much risk but entrepreneurship involves taking certain amount of calculated risks.
A Comparison between Entrepreneurship and Employment
| Activities | In Entrepreneurship | In Employment |
| Allows a person to make money. | Yes | Yes |
| Finding solutions for a community problem by himself/herself. | Yes | No |
| The job done by the person is decided by himself/herself. | Yes | No |
| Use personal knowledge and interest to make money for oneself. | Yes | No |
| Use innovation and creativity to attract clients. | Yes | No |
| Keep most of the money, i.e., profit made for a product/service. | Yes | No |
| Take risk to make profit. | Yes | No |
Benefits of Entrepreneurship
The various benefits include the following:
- Do What You Are Interested In Entrepreneurship allows to start something according to choice. These choice depend upon hobbies and skills of entrepreneur.
- Work for Yourself, and Not for Other Entrepreneur work for own and not for someone else. An entrepreneur decide the kind of work and how to do it.
- Make Profits for Yourself The principle focus of entrepreneurship is earning money. An entrepreneur decide how much money to earn and how to earn.
- More Risk, More Profit There are risks in entrepreneurship. It allows entrepreneur to decide how much risk to take. Usually, the larger the risk, the bigger could be profit.
Entrepreneurship Development Process Class 9 Notes
It is the process of enhancing the knowledge and skills of entrepreneurs with help of various training programme. Entrepreneurship development process can take place through formal and informal learning system.
- Formal Learning System In the formal learning system, training programmes are conducted to bring about awareness, knowledge and skill related to entrepreneurship.
- Informal Learning System It is a spontaneous process of learning through conversation, exploration and enlargement of the experience.
Steps of Starting a Business
- Business Idea The first step while starting a business is to come up with an idea. A business idea is based on (a) Interest of individual, (b) Market need
- Getting Money and material Second steps of starting business is the use of idea to start on a small scale with some morky. It helps in buying basic material.
- Understanding Customer Need Once entrepreneur starts selling, he/she will find out the likes and wants and also dislikes of customers.
- Improving Product/Service He she can use this knowledge of what your customer likes and does not likes to improve their product.
Glossary:
- An entrepreneur is a person, who is self-employed, is willing to take a calculated risk and brings a new idea to start a business.
- Entrepreneurship means organising, developing and managing a business venture alongwith any of its risks in order to make profit.
- Wage employment consists of employer and employee.
- Generally, business activities are of three types, viz, product business, service business and hybrid business.
- There are mainly two types of product based business, i.e. manufacturing business and trade business.
- Entrepreneurship development process can take place through formal learning system and informal learning system.
- There are mainly four steps for starting a business, viz, business idea, getting money and material, understanding customer need and improving product and services.
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