The entrepreneurial decision process Deciding to become an entrepreneur by leaving present activity. Millions of ventures are formed despite recession, inflation, high interest rates, and lack of infrastructure, economic uncertainty and high probability of failure. The entrepreneurial decision process, which entails a movement, from something to something-a movement from present lifestyle to forming a new enterprise.

Decision for a potential entrepreneur: Changes from present lifestyle ---Form new enterpriseWork environment DesirableDisruption (disorder) 1. culture 2. subculture 3. family 4. teachers 5. peers Possible1. government2. background3. marketing4.financing 5. role models

CHANGE FROM PRESENT LIFESTYLE: The decision to leave a career is not an easy one. It requires great deal of energy and courage.

(a) WORK ENVIRONMENT: The two environment have been particularly good for new enterprises are R & D and Marketing because R&D helps in new product idea and processes development. And marketing helps in understanding the unfilled wants and needs of customers. They frequently leave their present job to start new enterprises.

(b) DISRUPTION: It is a negative force with stronger incentive as compare to present job and to leave a present lifestyle and to create something new. A number of companies are formed by people who have retired, who have been fired or who are relocated. A study in united state (US) reveals that new business listing in yellow pages increased by 12% during a lay off period . Another example a student not promoted after receiving an MBA degree may become frustrated and decide to leave and start a new company.

FORMING NEW ENTERPRISES : It depends on desirability and possibility of new venture formation.

(a) DESIRABLITY OF NEW VENTURE FORMATION: aspects of situation that make it desirable to start a new company. Results from an individual ,culture, sub culture, family, teacher, and peers. E.g. the American culture places a high value on being ones own boss and making his own wealth, therefore in USA there is a high rate of company formation in USA. Similarly encouragement to form a company may comes from teachers who can influence individuals to regard entrepreneurship as desired career path. Studies within subculture (such as silicon valley), USA reveal that a high percentage of founders of companies had parents who valued independence, these subculture encourage entrepreneurship and company formation activities.

(b) PSSIBLITY OF NEW VENTURE FORMATION: Factors like government, background, marketing, financing helps and encourages the formation of new enterprise.

Government: Prime Minister Self Employment Scheme.Chief Ministers Youth Self Employment Scheme.

Background: Formal Education like MBA.

Marketing: An understanding of market needs and demands plays important role in forming a new company.

Finance: Readily availability of finance and risk capital availability encourages entrepreneurship.

Types of start-ups: 1. Lifestyle firm: A small venture that supports the owners and usually does not grow due to objectives of entrepreneur limited money to R & D. After several years it grows to 30-40 employees & $ 2 million annual revenue.

2. Foundation company: A type of company formed from research and development that usually does not go public can grow in 5 to 10 years from 40 to 400 employees and from $10 million to $ 20 million revenue.

3. The high potential venture: A venture that has high growth potential and therefore receives great investor interest. It may start like Foundation company but may receive high growth rate. After 5 to 10 years it can have 500 employees with $ 20 million to $ 30 million annual revenue. These are also called as Gazelles.