Criteria of Performance Entrepreneur

Criteria of Performance Entrepreneur

The following main criteria can be employed to comment on the performance of entrepreneurs:

  1. Financial Results
  2. Gestation Period
  3. Capacity Utilization
  4. Expansion and Diversification
  5. Value Addition
  6. Other Factors

Financial Results

Judgment about the financial health of the enterprise can be made on the basis of various yardsticks, like return on capital employed, net profit over the sales, etc.

Gestation Period

It represents the time gap between the registration and commencement of commercial production. A gestation period of two or three years is regarded as satisfactory by financial institutions. Projects can be delayed due to various reasons like delays in governmental approval, assistance from financial institutions, manpower availability problems, and problems with collaborators.

Capacity Utilization

It depends upon the demand for fished products and the availability of various factors of production like funds, raw materials, power labor, etc. Break-even occurs for the majority of entrepreneurs at 60 percent of installed capacity. Approximately 50 percent of entrepreneurs were operating at 80 % of installed capacity.

Expansion and Diversification

Expansion refers to the increased production of the same product whereas diversification implies production of new types of products. Depending upon the demand and availability of resources firms can opt for expansion or diversification.

Value Addition

It refers to the gross value of output minus the value of raw materials and other inputs used in the production. The more value addition more efficient is the entrepreneur.

Other Factors

Various other factors can be used to examine entrepreneurial effectiveness. These can be employment generation and rural development. Sales turnover, export promotion import substitution, etc., can be some of these factors.


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