Your own boss: Many graduates prefer to be self-employed rather than seek a job

Entrepreneurship is the practice of starting new organisations or revitalising mature organisations, particularly new businesses, generally in response to identified opportunities. It is often a risk, as a vast majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organisation that is being started. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating job opportunities. Many “high-profile” entrepreneurial ventures seek venture capital or equity funding in order to raise capital to build the business.

The entrepreneurial bug seems to have bit a number of people, who’ve taken the mid-career plunge. Budding entrepreneurs realised that “being your own boss” was a primary driver but not as important as the opportunity to “take a concept to the market quickly”. They decide what hours to work, and when to take vacations. To start your own venture, you should have a strong desire to be self-employed, combined with good ideas, careful planning, and hard work, which can lead to a very engaging and profitable endeavour.

What do I have to do?

Generally, businesses experience four stages: start-up, growth, maturity, and decline. Start-ups are businesses that have recently come into existence. Before revenues are generated, businesses in the start-up stage generally require a large investment of time, effort, energy, and money to create a stable customer base, buy inventory, and engage in other business activities. The start-up stage is generally characterised by innovation, high risk, and low profit margins.

Mature firms have achieved a certain amount of recognition along with a brand. Contacts are well established, sales require less effort, the business produces a reliable stream of cash, and borrowing becomes easier. At this point, intensive marketing may be needed to increase or maintain market position, and some product innovation also occurs. Profit margins tend to stabilise.

Basically, three separate categories of entities exist: partnerships, corporations, and limited liability companies. Each category has its own advantages, disadvantages, and special rules.

It is also possible to operate your business as a sole proprietorship without organising a separate business entity.

How much money your business needs, what kind of financing is needed for (start-up, expansion, new development), as well as how your business is organised, its size, and its stage in the business life cycle (start-up, growth phase, mature) are just a few of the things that will decide how you raise your capital. You may be able to raise money for the business from your savings or borrow against a retirement plan, life insurance policy, credit card, or the equity in your home.

As a sole proprietor, you handle all business matters — from producing and marketing goods or services to fixing problems in the office. This is when you need to hire professionals, which should increase your revenue enough to pay the employee’s salary and benefits, plus add to your profits.

What should I study?

Career requirements for an entrepreneur vary widely. For example, an entrepreneur can get into a fast food franchise with little or no training.

Conversely, an entrepreneur in the biomedical sector may require at least a PhD in the field with an executive MBA. Basically, you should have completed your graduation in any discipline and develop domain knowledge of your field of interest. An MBA is an added advantage. Entrepreneurship brings together innovation, creativity, technology, insight and leadership with the more traditional discipline-led skills of business — such as marketing, finance, accounting, economics, management, law and operations.

What next?

Being an entrepreneur offers the key advantage of creating a good career for yourself as opposed to attempting to compete with a large number of skilled individuals with impressive credentials. Most graduates do not seek salaried positions but choose to become self-employed prior to, or directly after, graduating. They can start their own ventures in lifestyle, educational services, retailing and merchandising, food and beverage, non-profit and public services, marketing, sales, customer service, marketing research, and aspects of marketing communications such as advertising and media as well as finance, banking, and information technology.

Entrepreneurship graduates can also work as analysts for investment banks or venture capitalists; as management consultants or recruiters; or business development professionals in an established firm.

Most new entrepreneurs help the local economy. A few — through their innovations — contribute to society as a whole. One example is Steve Jobs, who co-founded Apple in 1976, and ignited the subsequent revolution in desktop computers. Dhirubhai Ambani, JRD Tata, Kiran Majumdar Shaw, Azim Premji and Narayana Murthy are a few well known entrepreneurs in India. Indian entrepreneurs are making waves all over the world, they have flourished under globalisation. Indian firms are making acquisitions abroad and spreading their tentacles to various corners of the world.

In every state, the Industrial Development Corporation or its equivalent, the Small Scale Industries Development Corporation, directorate of industry and state finance corporations (SFC) are resource centres for would-be entrepreneurs. SFCs and institutions like Small Industries Development Bank of India (SIDBI) extend long-term loans for projects while the commercial banks and regional rural banks provide the working capital.

Where to study

• Narsee Monjee Institute of Management Studies, Mumbai.

• Centre for Entrepreneurship & Innovation, IIM Calcutta.

• EMPI Business School, Delhi.

• Institute of Management, Nirma University of Science and Technology, Ahmedabad.

• Xavier Institute of Management & Entrepreneurship (XIME), Bangalore.

• National Institute for Entrepreneurship and Small Business Development (NIESBUD), New Delhi.

• ASEED and Entrepreneurship Development Institute of India (EDII), New Delhi.