This page contains the entrepreneurship class 11 cbse book chapter/unit Entrepreneurship: Concept and Functions notes where in the questions/answers/solutions for this chapter/unit 1 are covered.
Very Short Answers
Question Q.1.(i)
Q.1.(i) What is an enterprise?
Answer Q.1.(i)
An enterprise is a business organisation that provides goods/services, creates jobs, and supports economic development.
Question Q.1.(ii)
Q.1.(ii) Who is an Entrepreneur?
Answer Q.1.(ii)
An entrepreneur is a person who starts and owns an enterprise, is innovative, and converts situations into opportunities.
Question Q.1.(iii)
Q.1.(iii) Who plays the role of an entrepreneur in a socialist country?
Answer Q.1.(iii)
In a socialist country, the state (Government) plays the role of the entrepreneur for economic development.
Short Answers
Question Q.2.(i)
Q.2.(i) Explain any two advantages of being an Entrepreneur?
Answer Q.2.(i)
Two advantages are Independence and Originality. Independence means the entrepreneur can be their own boss and take important decisions personally. Originality means they can offer a new product/service and create value in the market by doing something different.
Question Q.2.(ii)
Q.2.(ii) Explain any two disadvantages of being an Entrepreneur?
Answer Q.2.(ii)
Two disadvantages are Salary insecurity and unpredictable work schedule. A person who starts a business may have to give up the security of a regular pay cheque. Also, the work schedule is not fixed; emergencies can come anytime, and late working hours may become normal.
Question Q.2.(iii)
Q.2.(iii) Differentiate between entrepreneur and entrepreneurship.
Answer Q.2.(iii)
Basis
Entrepreneur
Entrepreneurship
Meaning
A person who starts an enterprise and works to create something new.
A process / set of activities performed to identify opportunities and create value.
Role
The actor / subject(who does the work).
The act / action(what is done).
Focus
Bears risks, organises resources, and innovates.
Identifies opportunities and marshals resources for long-term gains.
Outcome link
Leads to formation of an enterprise.
Process through which the enterprise is created.
Long Answers
Question Q.3.(i)
Q.3.(i) Describe entrepreneurial functions of an entrepreneur?
Answer Q.3.(i)
The entrepreneurial functions mainly include Innovation, Risk-taking, and Organisation building.
Innovation is the basic function where the entrepreneur introduces new combinations like a new product, new market, or new sources of raw material. They bring something new in economic activity and exploit profitable opportunities.
Risk-taking means taking responsibility for possible loss due to future uncertainties. The entrepreneur reduces uncertainty by planning investment, diversification, and expansion, and still remains willing to take risk.
Organisation building means bringing together factors of production and managing them properly to minimise losses and reduce costs. The entrepreneur also decides the line of business and capital to employ.
Question Q.3.(ii)
Q.3.(ii) What is the need of entrepreneurship in an economy?
Answer Q.3.(ii)
The main need for entrepreneurship in a country is economic development. In capitalist countries, private entrepreneurs play a major role; in socialist countries the government acts as entrepreneur; and in a mixed economy like India, both government and private entrepreneurs are important.
Entrepreneurship is also needed because it is like the life-line of a nation, and no country can progress without it. It becomes a yardstick to measure development.
It provides innovation by giving new ideas, imagination and vision, and by finding new technology, products and markets.
It also supports inclusive growth, increased profits through cost reduction, employment opportunities, and social benefits like better standard of living and optimum use of scarce resources.
Question Q.3.(iii)
Q.3.(iii) Mehak wants to start a textile unit near Gurgaon. Discuss the commercial functions which she will require to plan and perform for the same.
Answer Q.3.(iii)
To run a textile unit, Mehak will need to plan the commercial functions:Production, Finance, Marketing, Personnel and Accounting.
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Production: She must convert resources into goods (textile items). Production is the creation of goods and services and includes manufacturing and related activities.
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Finance: She will continuously need money from setup to expansion. She must analyse sources of finance and arrange funds whenever required.
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Marketing: She must ensure movement of goods from producer to consumer and satisfy customer wants. She must place the company strategically in the market.
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Personnel: Hiring, developing, compensating staff and maintaining working conditions and welfare measures.
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Accounting: Systematic recording of transactions so she knows the financial position of the enterprise.
Question Q.3.(iv)
Q.3.(iv) Explain any four managerial functions of an entrepreneur?
Answer Q.3.(iv)
Four managerial functions are:
1.
Planning: It decides the course of action—what to do, when, how and who will do it. It is the basic managerial function for achieving objectives.
2.
Organising: The entrepreneur arranges and coordinates resources and people, and guides/directs activities of production factors to achieve goals.
3.
Staffing: It includes manpower planning, recruitment, selection, placement, training, promotion, appraisal and deciding remuneration.
4.
Controlling: It ensures policies are implemented and performance matches standards; if not, corrective action is taken after comparing actual performance with standards.
Question Q.3.(v)
Q.3.(v) Explain any four promotional functions of an entrepreneur?
Answer Q.3.(v)
Four promotional functions are:
1.
Discovery of an idea: The entrepreneur visualises opportunities and develops the idea with experts before moving ahead.
2.
Detailed investigation: The entrepreneur estimates demand and checks availability of finance, power, labour, raw materials and machinery using proper analysis.
3.
Assembling the requirements: After deciding the project is practical, the entrepreneur gathers resources, selects site, finalises plant and machinery, and contacts suppliers.
4.
Financing the proposition: The entrepreneur estimates financial requirements and decides sources of funds (shares, debentures, loans, etc.).
Very Long Answers
Question Q.4.(i)
Q.4.(i) Describe the process of entrepreneurship?
Answer Q.4.(i)
Most enterprises follow a process to create an enterprise. The main steps are:
1.
Self-discovery: The entrepreneur learns what they enjoy doing, checks strengths and weaknesses, and relates experience to possible opportunities.
2.
Identifying opportunities: They look for needs, wants, problems, or challenges that are not yet properly solved.
3.
Generating and evaluating ideas: Using creativity and past experience, they create new ways to solve the problem and choose the best idea.
4.
Planning: They research and identify resources needed to make the venture viable, prepare a written business plan and marketing strategies.
5.
Raising start-up capital: They use the plan to attract investors/partners; sometimes prototypes or test marketing is done.
6.
Start-up: They launch the venture, build customers and adjust plans as required.
7.
Growth: The business grows by following strategic plans and adapting to new circumstances.
8.
Harvest: They sell the business and take rewards; many move on to new ventures and challenges.
Question Q.4.(ii)
Q.4.(ii) What is the need of entrepreneurship in an economy? Give at least six benefits.
Answer Q.4.(ii)
Entrepreneurship is needed mainly for economic development, and it supports a country in multiple ways.
At least six benefits are:
1.
Life-line of a nation: Countries cannot progress without entrepreneurship; it measures development.
2.
Provides innovation: Entrepreneurs bring new ideas, imagination and vision, and find new technology/products/markets.
3.
Inclusive growth / change of growth: Entrepreneurs mould enterprises to suit changing environments and even alter the environment for success.
4.
Increased profits: By reducing costs, entrepreneurship helps profits and future growth opportunities.
5.
Employment opportunities: Entrepreneurial activities create maximum employment potential and more job opportunities.
6.
Social benefits: Raises standard of living with good quality goods/services at low cost, makes optimum use of scarce resources, and promotes peace and prosperity.
HOTS: (Higher Order Thinking)
Question Q.5.(i)
Q.5.(i) Differentiate between Entrepreneurial functions and Managerial functions of an Entrepreneur?
Answer Q.5.(i)
Basis
Entrepreneurial Functions
Managerial Functions
Main idea
Creating value through innovation,risk-taking, and organisation building.
Managing day-to-day work through planning, organising, staffing, directing, controlling, etc.
Nature of work
More creative and opportunity-focused(new combinations, new markets).
More administrative and execution-focused(getting tasks done effectively).
Risk involvement
Directly includes assuming risk under uncertainty.
Focuses more on achieving goals efficiently; risk is controlled using systems/standards.
Example functions
Innovation, Risk-taking, Organisation building.
Planning, Organising, Staffing, Directing, Co-ordination, Controlling, etc.
Question Q.5.(ii)
Q.5.(ii) “Innovation is the hallmark of Entrepreneurship”. Why is “innovation” referred as the basic function of an entrepreneur?
Answer Q.5.(ii)
Innovation is called the basic function because an entrepreneur is mainly an innovator. Innovation means introducing new combinations like a new product, a new market, or new sources of raw materials.
When the entrepreneur introduces something new in economic activity, they create value and stand out from routine businesses. They also foresee a profitable opportunity and try to exploit it, which helps the enterprise grow and also supports economic development.
Question Q.5.(iii)
Q.5.(iii) “Entrepreneurs, in their drive and pursuit to create something new, at times, results in causing major loss to the Nation‟s natural res ources. Shouldn‟t they be discouraged? Justify giving reasons for your answers.
Answer Q.5.(iii)
Entrepreneurs should not be discouraged completely, but they should be guided and made responsible. The entrepreneur often looks for opportunities, and sometimes ideas may involve using natural resources.
However, entrepreneurship also gives social benefits and promotes peace and prosperity by using scarce resources optimally. So, instead of discouraging all entrepreneurship, the focus should be on encouraging innovation that is sustainable—using resources carefully, reducing wastage, and choosing responsible methods of production. This way, the nation gets development without harming resources unnecessarily.
Question Q.5.(iv)
Q.5.(iv) Starting a venture is not an easy task. A series of activities needs to be planned and undertaken to create an enterprise. Discuss them briefly.
Answer Q.5.(iv)
A venture is created through a clear process of entrepreneurship:self-discovery,identifying opportunities,generating and evaluating ideas,planning,raising start-up capital,start-up,growth, and harvest.
These steps are important because the entrepreneur must understand themselves, find real market needs, select the best idea, and prepare a business plan. After that, arranging funds and launching the venture are key. Then, the enterprise grows by adapting to changes and following strategic plans, and finally the entrepreneur may harvest rewards by selling or moving to a new venture.
Question Q.5.(v)
Q.5.(v) Why are Entrepreneurs called „agents of progress‟ for a nation? What role do they play in the Nation‟s development?
Answer Q.5.(v)
Entrepreneurs are called agents of progress because economic growth depends on innovation, and innovation depends on the number and quality of entrepreneurs in society.
They help the nation by creating enterprises that generate employment, increase profits through better use of resources, and improve standard of living by providing quality goods and services at the lowest possible cost. They also act as innovators who develop new products, markets and technologies and contribute to inclusive growth.
Application based exercise
Question Q.6.(i)
Q.6.(i) Shivi, a dropout from 10th std is forced by her mother to start working as a domestic help. Shivi agrees on the condition to do only „cooking‟ in 2-3 houses. One family turns out to be Punjabi, other Gujrati and the third one is Rajasthani. She cooked their kind of food for an year and to everyone‟s surprise, she expressed her desire to open up a small eating joint of her own. All alone, determined, she finally opens „Apna Bhoj‟, a small eating joint with her savings and it became a hot spot because of the fusion food platter being offered. Do you think Shivi is an entrepreneur? Give reasons for your answers.
Answer Q.6.(i)
Yes, Shivi shows many qualities of an entrepreneur. An entrepreneur is someone who perceives opportunity, organises resources, and exploits it. Shivi learned different cuisines (Punjabi, Gujarati, Rajasthani) and identified an opportunity to create something new—fusion food platter. This is innovation because she offered a unique combination to customers.
She also showed independence by starting her own small eating joint with her savings and taking personal responsibility.
Even though she was a dropout, she took risk(income uncertainty and business challenges) which is part of risk-taking under uncertainty.
So, based on innovation, risk-taking and starting an enterprise, Shivi can be considered an entrepreneur.
Question Q.6.(ii)
Q.6.(ii) Karan, a rural boy, identifies the potential of Organic Farming in the village. He meets the zonal agricultural officer, who, looking at the determination of this 20 years old, helps him arrange and procure multiple resources required for his farm land. Then Karan takes a loan of Rs. 50,000/- from SBI as his seed money of Rs. 10,000/- is not enough to cater the requirement. Karan ties up with a nearby city‟s vegetable shop owner to sell his yield. His hard work pays and the organic vegetables are a hit. This organic vegetable producer exhibits to be a good entrepreneur with good entrepreneurial skills. Do you agree? Justify giving reasons for your answers.
Answer Q.6.(ii)
Yes, I agree. Karan identified a market opportunity—organic vegetables—and then arranged resources with support from the agricultural officer. This matches the idea that an entrepreneur organises resources needed for exploiting an opportunity.
He also arranged start-up capital by taking a loan because his seed money was not enough. Raising and arranging finance is important in starting a venture.
He showed risk-taking because farming income depends on uncertain conditions, and still he invested money and effort.
Finally, he planned marketing by tying up with a vegetable shop owner to sell the yield, which links to the commercial function of marketing(movement of goods from producer to consumer).
Therefore, Karan demonstrates good entrepreneurial skills.
Activities
Question Q.7.(i)
Q.7.(i) Innovation: “Cherry shoe polish originally started with a wax tin, then they came up with an idea of liquid shoe polish, and then a shoe shiner with sponge and finally a shoe shiner with a brush‖. List 5 such similar examples which have marked their place for innovation.
Answer Q.7.(i)
1.
Mobile phone: keypad → touchscreen → smartphones
2.
Torch: bulb torch → LED torch → rechargeable emergency light
3.
Pen: fountain pen → ball pen → gel pen
4.
Television: black & white → colour TV → smart TV
5.
Cooking stove: chulha → gas stove → induction cooktop
Question Q.7.(ii)
Q.7.(ii) Creativity: “Multani Mitti, one of the most easily and reasonably available product is used by many cosmetic companies in the beautification products, just by modifying them into creative packaging and sold at high price‖. Survey and list the reasons f or buying the packed multani mitti instead of loose multani mitti, which is much cheaper. Also list any 5 items which fall in the same category.
Answer Q.7.(ii)
Reasons (survey-style points):
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Better hygiene and sealed packing
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Brand trust and quality consistency
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Easy to carry and store (no mess)
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Added features like fragrance/variants or usage instructions
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Attractive packaging (good for gifting / convenience)
5 similar items:
1.
Packed turmeric powder vs loose haldi
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Branded salt vs loose salt
3.
Packaged spices (chilli powder) vs loose spices
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Bottled drinking water vs local loose water
5.
Packaged face packs/ubtan vs loose homemade powders
Question Q.7.(iii)
Q.7.(iii) List 10 people from whom you buy any product or service, for example, newspaper vendor, milk vendor, a grocer etc. Who do you think is an entrepreneur, if not, why?
Answer Q.7.(iii)
Example list: newspaper vendor, milk vendor, grocer, vegetable seller, fruit seller, tailor, cobbler, barber, electrician, tuition teacher.
Many of them can be treated as entrepreneurs because they take business risk at their own level; however, they may not always be highly innovative.
Those who add something new (home delivery, new service, better quality, unique offerings) show stronger entrepreneurship.
Question Q.7.(iv)
Q.7.(iv) Monopoly: ―Amul Butter, utterly butterly delicious….”, is one of the leading brands of butter since years. Many companies made butters like Britann ia, Mother Dairy, Parag in UP, Saras in Rajasthan, Aarey in Maharashtra, Vadilal etc. but they could not compete with Amul Butter, which is a leading brand. Survey and list the reasons for the success of Amul and failure of others.
Answer Q.7.(iv)
Possible survey points:
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Strong brand recall and consistent taste/quality
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Wide distribution and easy availability
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Effective advertising and trust built over years
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Competitive pricing and value for money
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Strong supply chain and cooperative model support Other brands may fail due to weaker distribution, less consistent quality, and lower brand trust.
Question Q.7.(v)
Q.7.(v) Contact an employer in your locality or family who has set up their own business and interview the proprietor/s. Report the results to the class.
Answer Q.7.(v)
Activity Report (School Submission)
Unit 1 – Entrepreneurship: Concept and Functions
Q.7 (v) Interview an Entrepreneur/Employer
Title: Interview Report of a Local Entrepreneur (Proprietor)
1) Objective of the Activity
The objective of this activity is to contact an employer/entrepreneur who has started their own business,interview the proprietor, and prepare a report to present in class.
2) Details of the Entrepreneur Interviewed
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Name of Proprietor: Mr. Rajesh Kumar
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Type of Business:“FreshBite Snacks & Tea” (small food and beverage shop)
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Location: Near local market area (in my locality)
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Nature of Ownership: Sole proprietorship
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Year of Starting Business: 2021
3) Method of Data Collection
I visited the shop personally and conducted a short interview with the proprietor. I asked him questions related to starting the enterprise, challenges faced, planning, finance, customers, and future goals.
4) Interview Questions and Responses (Summary)
Q1. Why did you start this business?
Answer: He said he started this shop because he wanted independence and did not want to depend only on a fixed salary. He felt there was good demand for quick snacks and tea near the market.
Q2. How did you get the business idea?
Answer: He observed that nearby workers, students, and shoppers needed fast and affordable food, so he decided to provide snacks, tea, and small meals.
Q3. What were the main steps you followed to start the business?
Answer: He first selected a suitable place, then planned the basic menu, arranged utensils and raw materials, and finally started with limited items. Slowly, he added more items based on customer demand.
Q4. How did you arrange money (finance) for the business?
Answer: He used his personal savings and also took a small loan from a local cooperative bank. He said finance is needed not only to start but also for regular purchases like groceries, milk, and vegetables.
Q5. What risks did you face in the beginning?
Answer: He said the main risk was uncertainty of income, because customers may or may not come daily. Another risk was managing costs like rent, electricity, and raw materials.
Q6. What difficulties did you face while running the enterprise?
Answer: He mentioned problems like price rise of raw materials, competition from other shops, and managing customers during peak hours. Sometimes staffing is also an issue when helpers are absent.
Q7. What strategies did you use to attract and retain customers?
Answer: He focused on cleanliness, taste, reasonable pricing, and quick service. He also introduced a few “special items” on weekends, which helped attract more customers.
Q8. How do you manage daily work (managerial part)?
Answer: He plans the daily stock in the morning, purchases required items, manages the staff, and checks sales at night. He also keeps a simple record of expenses and income.
Q9. What are your future plans for growth?
Answer: He wants to expand the shop by adding more seating and introducing a few more breakfast items. He also plans to start home delivery within nearby lanes.
Q10. What advice would you give to students who want to become entrepreneurs?
Answer: He advised students to start small, understand customer needs, control costs, and be ready for hard work. He said patience is important because success does not come immediately.
5) My Learning / Conclusion
From this interview, I learned that an entrepreneur is someone who starts an enterprise, takes risk, plans and manages resources, and works continuously to satisfy customers. Running a business requires both entrepreneurial qualities like identifying opportunities and taking initiative, and managerial functions like planning, organising, staffing, and controlling. Overall, the interview helped me understand entrepreneurship in real life.
6) Student Details (To be filled)
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Name:
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Class/Section: XI
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Roll No.:
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School Name:
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Date: