12th Standard Commerce — Types of Entrepreneurs Online Test

About Types of Entrepreneurs

Easy ~30 min study

Types of Entrepreneurs is the twenty-fourth chapter of the Tamil Nadu State Board Class 12 Commerce book and part of Unit 9, Entrepreneurship Development. It opens with Thirukkural 472 and explains that although entrepreneur is a general term, entrepreneurs are called by different names depending on the function they perform, the business they engage in, the technology they adopt, the area of the venture, its development stage, ownership and motivation.

A single chart sums up the chapter: seven bases of classification and twenty-six types under them. Each type is then described in a short paragraph.

This page gathers the five printed one mark questions, with every keyed answer checked against the lesson, plus additional questions covering every section, each with a short explanation.

What you'll learn

• List the seven bases on which entrepreneurs are classified.
• Distinguish innovating, imitative, fabian and drone entrepreneurs.
• Describe the seven types of entrepreneurs based on type of business.
• Explain technical, non-technical and professional entrepreneurs.
• Compare pure, induced, motivated and spontaneous entrepreneurs.
• Explain classification by development stage, area and ownership.

Before you start

• The concept, characteristics and functions of an entrepreneur from Chapter 23.
• Basic idea of forms of business organisation such as sole trader and company.
• Awareness of Government support for small business.

Types of Entrepreneurs explained

What this lesson covers

Classification according to function

Innovating entrepreneurs introduce something new; imitative entrepreneurs reengineer products from advanced countries for local conditions; fabian entrepreneurs are conservative and risk-averse and adapt to change only as a last resort; drone entrepreneurs never adapt and operate in a niche market.

Classification according to type of business

Business (solo), trading, industrial, corporate (promoter), agricultural, retail and service entrepreneurs. Trading entrepreneurs only buy and sell; industrial entrepreneurs manufacture and add value; corporate entrepreneurs start an entity under company law where ownership and management are separated.

Classification based on technology

Technical entrepreneurs are craftsmen who focus on production; non-technical entrepreneurs market and distribute; professional entrepreneurs start a venture and sell it after take-off.

Motivation and development stage

Pure entrepreneurs act on psychological and economic motives; induced ones respond to Government incentives; motivated ones seek self fulfilment; spontaneous ones follow inborn traits. First generation entrepreneurs are self made, modern ones spot unmet needs, classical ones run family businesses.

Area and ownership

Urban and rural entrepreneurs differ by location; rural ventures get incentives to check migration to cities. Ownership gives private, state and joint entrepreneurship.

Common mistakes to avoid

• Treating fabian and drone entrepreneurs as identical. Fabians adapt as a last resort; drones never adapt.
• Calling the corporate entrepreneur a shareholder or manager. The book calls him or her a promoter.
• Placing professional entrepreneurs under development stage. They belong to classification based on technology.
• Listing manufacturing as a trading activity. Trading entrepreneurs only buy and sell finished goods.
• Confusing induced with motivated entrepreneurs. Induced ones respond to Government incentives; motivated ones seek self fulfilment.
• Mixing up first generation and classical entrepreneurs. Classical ones come from business families; first generation ones have no family background.

Test yourself on these with the practice test, then check the worked reasoning in the solved MCQs.

Frequently asked questions

On what bases are entrepreneurs classified?

The lesson classifies entrepreneurs on seven bases: function, type of business, technology adopted, motivation, development stage, area and ownership. Each base has its own sub-types, giving twenty-six types in the chart.

What is the difference between fabian and drone entrepreneurs?

Both are conservative and follow conventional practices. A fabian entrepreneur adapts to change eventually, as a last resort, when he fears loss or collapse of the enterprise. A drone entrepreneur is totally opposed to change and never adapts, and usually operates in a niche market.

Who is a corporate entrepreneur?

A corporate entrepreneur, also called a promoter, takes the initiative to start an entity in corporate form, completes the formalities under company law, assembles resources and installs a team of experts to manage it daily. In this form ownership and management are separated.

Who are agricultural entrepreneurs?

They raise farm products and market them directly, through co-operatives or brokers, or through tie-ups with large retailers. They use inputs such as labour, fertilizer, insecticide and water. Those raising allied products such as poultry, fish, honey, flowers, silk and prawn are also agricultural entrepreneurs.

Who is a professional entrepreneur?

A professional entrepreneur has rich expertise in starting a venture but no interest in continuing it as manager or owner. He or she sells the venture after its successful take-off and moves on to conceive new projects.

What is an induced entrepreneur?

An induced entrepreneur is drawn into business by entrepreneurship friendly Government policies: loans, subsidies, nominal interest, tax breaks and holidays, training, import of technology, export concessions, and sheds or land at subsidised prices.

What are private, state and joint entrepreneurship?

Ventures started by individuals singly or collectively at their own risk are private entrepreneurship. Trading or industrial ventures started by the Government as a company, corporation, department or board are state entrepreneurship. Ventures owned by both private individuals and the Government are joint entrepreneurship.