Unit – 1

Chapter Tour
Concept of Entrepreneur. Intrapreneur, Entrepreneurship and Manager. Difference
between Entrepreneur and Intrapreneur, Entrepreneur and Entrepreneurship.
Attributes and Characteristics of successful entrepreneurs. Functions of an
Entrepreneur, Classification of Entrepreneurs.

Role of Entrepreneur in Indian Economy, Developing entrepreneurial culture, Factors

influencing Entrepreneurship Growth - Economic, Non-Economic Factors, For profit or
Not for profit entrepreneurs, Constraints for the Growth of Entrepreneurial Culture,

Entrepreneurship as a career, Entrepreneurship as a style of management, Emerging

Models of Corporate Entrepreneurship, India’s start up revolution–Trends,
Imperatives, benefits; the players involved in the ecosystem, Business Incubators-Rural
entrepreneurship, social entrepreneurship, women entrepreneurs,

Cases of Tata, Birlas, Kirloskar and new generation entrepreneurs in India

 Unit – 1
Concept &

Definition Entrepreneur:

“An Entrepreneur is a person who creates his own business i.e.,

a person who organizes, operates and assumes the risk of a
business venture.”

“An entrepreneur is a person who perceives a need and then

brings together manpower, material and capital required to meet
that need.”
 Unit – 1
Concept &
Definitions Entrepreneurship:

“Entrepreneurship is a composite skill that is a mixture of many

qualities and traits such as imagination, risk taking, ability to
harness factors of production i.e., land, labour, technology and
various intangible factors.”

“Entrepreneurship is creation of value by people working

together to implement an Idea through the application of drive
and a willingness to take risk.”
 Unit – 1
Concept &
Entrepreneurship as per Economists and Management Gurus:
Adam Smith, father of Political Economy, suggests Entrepreneur
has a role of an industrialist. They have unusual foresight to recognize
potential demand of goods and services.

Joseph Schumpeter, an economist, described Entrepreneur as

person who innovates, raises money, collects inputs organizes talent,
provides leadership and sets the organisation.

Peter Drucker, the management guru, describes entrepreneur as

one who always searches for change, responds to it and exploits it as an
opportunity.
 Unit – 1
Concept &

Leading Entrepreneurs
 Unit – 1
Concept &

Five Elements of Entrepreneurship:

 Creativity & Innovation

 Ability to apply Creativity
 Drive and Passion
 Focus on creating Value
 Risk Takers
 Unit – 1
Concept &
Entrepreneurship as Career Option:
Broadly we have two career options:
1. Wages or Salaried
2. Self / Entrepreneurial Employment.

Areas of W age/Salary E ntrepreneurial

Distinction Employment Employment
Nature Self Satiating (satisfaction) Self Generating
Scope Limited Unlimited
Orientation Routine type, Dependent, Creative, Innovative,
Status Quo Independent Decisions
Contribution Consumes National Wealth Generates National Wealth
Earning Fixed (Subsistence) Growing (Generating Surplus)
 Unit – 1
Concept &

Just for reference : Do not write

Income Generation, Self Employment and

Entrepreneurship are often used interchangeably.
While in literal terms these may lead to common
objective of self enunciation & involvement however
referring to their nature one can conclude that “all
entrepreneurs are self Employed & Income
Generating persons but all Self employed & income
generating persons may not be entrepreneurs.”

Entrepreneurship refers to identification of

Innovative Ideas & setting up of a new venture.
 Unit – 1
Concept &

The Making of an Entrepreneur: (Just for reference, not as notes)

The following questions once answered will determine the fitness for
entrepreneurial life:

1. Can you tolerate a high level of Risk?

2. Are you an overachiever?
3. Are you a self-starter?
4. Would you describe yourself as a good decision maker?
5. Are you willing to put your personal funds at Risk?
6. Do you have the commitment required to build a business in the face of
long hours and modest odds of success?
 Unit – 1
Concept &

The Making of an Entrepreneur: (Just for reference, not as notes)

Well, these questions may not touch the technicalities of any

business however it does give an opportunity to a person to evaluate
his emotional quotient with respect to starting up a venture.

“Ideas are important, but rarely are they as

important as personal background, motivation and
attitude.”

Think about it …
 Unit – 1
Concept &
Entrepreneurship and Economic Development;

1. Creates Employment Opportunity

2. Focus on Regional Development
3. Contributes to National Income
4. Contributes to Balance of Payment (Exports & Imports)
5. Creating Innovation
6. Ensuring Better standard of Living
7. Enhancing Production Evolution Process
8. Supporting Welfare amenities
 Unit – 1
Concept &
Definitions
The Entrepreneurs may get be divided into a few categories :

1. Based on Functional Characteristics - Innovative, Adoptive, Fabian

(extreme followers, Low risk takers)

2. Based on Types of Business: Business, Trading, Retail, Service, Agricultural

3. Based on Use of Technology: Technical and Non Technical

4. Growth Oriented

5. As area & Gender: Male / Female, Urban / Rural

6. Level of Motivation: Pure & Induced

7. As per Capital Ownership: Private, State and Joint

8. As per Entrepreneurial Activity: Novice, Serial, Portfolio

 Unit –
Entrepreneurial Competencies
Competencies:

Competency is composed of Knowledge, Abilities, Performance and Skills of

individuals.

Competency in the words of Spencer & Spencer is an underlying

characteristic of an individual that is causally related to criterion referenced
effective and superior performance in a job or situation.

Entrepreneurial Skills:
1. Creativity
2. Problem Solving
3. Decision Making Skills
4. Communication Skills
5. Leadership Quality
 Unit – 1

Situation Assessment and Analysis:

1. Paresh and Ramesh are final year B.com students eager to start their own
enterprise to make more money

2. Their choice is the Building Construction Business as career opportunity.

They assume that the business may have occasional down turn but it does
have a potential of high margin (as high as 100%)

3. They stay in Nasik and they feel the venue to be appropriate for the business
as it has good connectivity with cities like Mumbai and Pune .

4. They have decided the name to be NIRMAN Builders

5. Their parents will provide initial finance of Rs 5 Lacs each (total 10 lacs)

6. They do not have Experience still they feel confident as they believe that they
can hire expert resources for the job.

Discuss the pros and cons of the business Idea.

 Unit – 1
Factor Affecting Entrepreneurial
Entrepreneurial Traits:

Entrepreneurial Traits are the characteristics of the

Entrepreneurship. These are the desired attributes in an
entrepreneur.

 Innovative and creative

Risk taker
Decision Maker
Accepting Challenges
Problem Solver
Motivated and Optimist
 Unit – 1
Factor Affecting Entrepreneurial
Economic & Non Economic Factors Affecting the Growth of
Entrepreneurship Development:

1. Economic Factors
(Lack of Adequate overhead facilities like Power, Irrigation etc.., Non
availability of Capital, Skilled Labourers, Risk assessment)

2. Social & Cultural Factors

3. Personality Factors

4. Psychological Factors (Theory of Need assessment)

5. Political Factors
 Unit –

Entrepreneurship Development Programmes (EDP):

EDPs are the sessions that equips the desiring candidates to imbibe the essence
of Entrepreneurial features.

EDP may be defined as a programme designed to help an individual in

strengthening his entrepreneurial motives and acquiring skills & capabilities
necessary for playing the Entrepreneurial role effectively.

The major objectives behind EDPs are:

 Strengthen the Entrepreneurial Qualities in individuals
 Support the National Economy
 Detailing the pros & cons of the Entrepreneurial ventures
 Spread knowledge of Government plans and compliance
 To encourage budding Entrepreneurs to avail new business opportunities
 Unit –

Entrepreneurial Training:

The EDPs normally pass through following three important phases:

 Pre-training phase – (Planning the Training, gauging the needs,

contracting with the Govt. Authorities like DIC etc.)

 Training phase - (Conducting the Training, Scheduling the Demo Sessions,

ensuring the timeliness)

 Post-training or follow-up phase – (Providing Directions & Support)

 Unit –

Managers Vs. Entrepreneurs

 Unit –

Managers Vs. Entrepreneurs: Cont…

 Unit –

Managers Vs. Entrepreneurs: Cont…

 Unit – 1
Steps of entrepreneurial
The Early Career Dilemmas of an Entrepreneur

The Entrepreneurs may experience several sorts of Dilemmas:

 Personal Dilemma: Self Finances, concern on early success,

Managing Stress, Family Life

 Business Dilemma: Resource Management, Client Satisfaction

 Mid Career Dilemma: Business Growth, hiring middle & high level
management professionals

 Late Career Dilemma: Retirement, Succession Planning

 Unit – 1
Steps of entrepreneurial
Defining Survival and Success

Success has various facets. It may differ from Venture to Venture. However in
this modern world of operations & immense competitive era, Success primarily
relates to survival.

Survival appears positively related to firm’s size (whether defined by turnover,

assets or employee numbers) and the length of time that a business has been
operating.

Survival Strategies:
Cashflow Management
Sales Orientation
Financial Budgeting
System Orientation
Continuous Feasibility Analysis
 Unit – 1
Steps of entrepreneurial
Defining Survival and Success: Cont…

Entrepreneurial Success may be attributed to following aspects:

 Competitive Advantage
 Strategic Intent (Vision, Mission & Objectives)
 Business Discipline & Focus
 Financial Management
 Determination & Confidence
 Social Skills
 Unit – 1
Steps of entrepreneurial
Entrepreneurship as a Style of Management

 Entrepreneurship as a Style of Management is characterized by the focus for

change, focus for opportunity and Organisation wide management.

 Leadership, Power and Motivation are the essential aspects of Management

that an Entrepreneur need to manage the venture.

 Entrepreneurs inevitably find themselves in leadership roles.

 The entrepreneur must make a successful transition to the role of CEO &
transform into a leader.

 Leaders mobilize others to get extraordinary things done in organizations and

they create a climate in which people turn challenging opportunities into
remarkable successes. This exactly what an Entrepreneur is meant for, hence
we say Entrepreneurs are Leaders.
 Unit –

Entrepreneurship as a Style of Management: Cont…

The following practices of Management can be instituted by the Entrepreneurs

to achieve success in their respective ventures:

Team Work & Spirit

Feedback Mechanism
Job Delegation
Training & Development for Employees
Focus on Productivity
Enhance Job Satisfaction
 Unit –
Steps of entrepreneurial process
Entrepreneurial Process

Deciding

Recognizing Developing

Moving
Managing
 Unit –

Social Entrepreneurship
 Unit –

Women Entrepreneurship
 Unit –

Rural Entrepreneurship
 Unit –

Emerging Models of
Corporate
Entrepreneurship
 Unit –

India’s Start up Trends

& Significance
 Unit –

Thank You
 Unit – 2
Theories of

Theory of High Achievement by

McClelland, Innovation Theory by

Schumpeter,

X- Efficiency Theory by

Leibenstein, Theory of Profit by

Knight,

Theory of Social change by Everett Hagen

 Unit – 2
Theories of
Theories of Entrepreneurship:

David C. McClelland : Theory of High Achievement

McClelland is a well known behavioral Scientist of USA.

According to him achievement motivation can be developed through
training and experience.

As per McClelland, a person acquires three types of needs as a

result of one’s life experience. These three needs are:

o Need for affiliation

o Need for Power
o Need for Achievement
 Unit – 2
Theories of
David C. McClelland : Theory of High Achievement cont

McClelland suggested that in case of Entrepreneur the high

need for achievement is found as the dominating factor. In his
view the people with high need for achievement are characterized
by the following:

o They set Moderate, realistic and attainable goals for them

o Prefer situations in which they can find solutions to problems

o They are inclined to concrete feedback on their performance

o They look for challenging tasks

o They have need for achievement for attaining personal

accomplishment
 Unit – 2
Theories of
David C. McClelland : Theory of High Achievement cont

The need for achievement plays an important role in making

an entrepreneur as successful . McClelland conducted his
experiment with groups of businessmen in three countries i.e.,
Malawi, India and Ecuador.

In India during 1964 he carried out his famous experiment in

the name of “Kakinada Experiment” in an Industrial town in
Andhra Pradesh.

The observation was recorded for couple of years. A total of 52

candidates clubbed into 3 groups from business and Industrial
community were selected for the training programme.

Objective of the programme:

To improve imagination power of trainees and enable them to

introspect their motivation.
 Unit – 2
Theories of
David C. McClelland : Theory of High Achievement … cont….

Experiment and Its Impact:

As per the training programme :

o The individuals strived to attain concrete and regular feedback

o The participants sought models of achievement to emulate

o The participants thought of success and accordingly set plans and

goals

o The participants were encouraged to think and talk to themselves in

a positive manner.
 Unit – 2
Theories of
David C. McClelland : Theory of High Achievement … cont….

Experiment and Its Impact: cont…

The observations were very encouraging .

o People who attended the programme performed better as against the

people who didn’t attend the programme.

o The training programme positively influenced the entrepreneurial

behavior of the participants.

o Also the study concluded with the observation that the younger
generation can reap the benefits at a larger scale.
 Unit – 2
Theories of
Elements of Entrepreneurial Behaviour: Suggested by David McClelland

1. Self Analysis
2. Personal Efficacy
3. Culture & Values
4. Risk Taking Behaviour
5. Technology Back up
 Unit – 2
Theories of
entrepreneurship

Schumpeter, who believed that an entrepreneur can earn economic profits

by introducing successful innovations. In other words, innovation theory of
profit posits that the main function of an entrepreneur is to
introduce innovations and the profit in the form of reward is given for his
performance.

The theory was advanced by one famous scholar, Schumpeter, in

1991. Schumpeter believes that creativity or innovation is the key factor in
any entrepreneur's field of specialization. ... He believed that creativity
was necessary if an entrepreneur was to accumulate a lot of profits in a
heavily competitive market
 Unit – 2
Theories of
entrepreneurship
According to Schumpeter, the creative process of economic development can be
divided into the three distinguishable stages of
• Invention,
• Innovation(commercialization) and
• Imitation.

Schumpeter viewed innovation along with knowledge as the main catalysts of

successful entrepreneurship. He believed that creativity was necessary if an
entrepreneur was to accumulate a lot of profits in a heavily competitive
market. The concept of innovation and its corollary development embraces
five functions:
 Introduction of a new good
 Introduction of a new method of production
 Opening of a new market
 Conquest of a new source of supply of raw materials and
 Carrying out of a new organization of any industry
 Unit – 2
Theories of
entrepreneurship

Features of Schumpeter Theory

 High degree of risk and uncertainty in Schumpeterian World

 Highly motivated and talented individual
 Profit is merely an part of objectives of entrepreneurs
 Progress under capitalism is much slower than actually it is
 It is leadership rather than ownership which matters.
 Unit – 2
Theories of
entrepreneurship

The x-efficiency theory is a theory developed by Harvey Leibenstein

(†1994). Generally spoken, x- inefficiency means the difference between
the optimal efficient behavior of business in theory and the observed
behavior in practice.

X-efficiency is the degree of efficiency maintained by individuals and firms

under conditions of imperfect competition. ... However, x-efficiency theory
asserts that under conditions of less-than-perfect competition, inefficiency
may persist.

For example, a state-owned firm may be more concerned about the

political implications of making people redundant than getting rid of
surplus workers. A firm may continue to source raw materials from a
high-cost supplier rather than look for cheaper raw materials
 Unit – 2
Theories of
entrepreneurship

Leibenstein regards entrepreneurship as a creative response to X-

efficiency. Other people’s lack of effort and the consequent inefficiency of
the organizations that employ them, create opportunities for
entrepreneurs. Entrepreneurial activities pose a competitive threat to
inefficient organizations.

Leibenstein identifies two main roles for entrepreneurs.

The first role is the ‘input completion’ involves making available inputs
which improve efficiency of existing production methods or facilitates the
introduction of new ones.

The second role ‘gap filling’

 Unit – 2
Theories of
Theory of Profit by Knight :

The Knight’s Theory of Profit was proposed by Frank. H. Knight, who

believed profit as a reward for uncertainty-bearing, not to risk bearing.
Simply, profit is the residual return to the entrepreneur for bearing the
uncertainty in business.

Knight had made a clear distinction between the risk and uncertainty. The
risk can be classified as a calculable and non-calculable risk.

The calculable risks are those whose probability of occurrence can be

anticipated through a statistical data.

While the non-calculable risks are those whose probability of occurrence

cannot be determined.
 Unit – 2
Theories of
Criticism of the knight’s theory of profit :

The major criticism of the knight’s theory of profit is, the total profit of an
entrepreneur cannot be completely attributed to uncertainty alone.

There are several functions that also contribute to the total profit such as
innovation, bargaining, coordination of business activities, etc.
 Unit – 2
Theories of
entrepreneurship

Everett E.Hagen's Theory in Hagen's theory of social change, he

propounded how a traditional society becomes one in which continuing
technical progress takes place.

The theory explores the following features which presumes the

entrepreneur’s creativity as the key element of social transformation and
economic growth.

1. Product of social change and political change; According to Hagen ,

most of the economic theories of underdevelopment are inadequate.

2. Rejection of followers Syndrome; Hagen rejected the idea that

the solution to economic development lies in imitating western technology
So the followers syndrome on the part of the entrepreneur is discouraged.
 Unit – 2
Theories of
entrepreneurship

3. Historical shift as a factor of initiating change; Hagen in his book

”How Economic Growth Begins” depicts historical shift as the crucial force
which has brought about social change, technological progress thereby
leading to the emergence of entrepreneurial class for different castes and
communities.

Hagen’s creative personality is the admixture of Schumpeter’s innovation

and McClelland’s fails to give policy measures for backward countries
which are striving for economic development, as he identifies status
withdrawal as the casual factor in the emergence of creative personality.
 Unit – 2
Theories of

Thank You
 Unit –
Entrepreneurship Development
Entrepreneurial Competencies, Developing Competencies.

Concept of entrepreneurship development, Entrepreneur Training and developing,

Role of Entrepreneur Development Programs (EDP),

Role of DIC, SISI , EDII , NIESBUD, NEDB, EDP - Objectives – contents – methods -
execution. Role of Mentors.

Innovation and Entrepreneurship, Design Thinking Process. Role of consultancy

organizations in promoting Entrepreneurs,

Problems and difficulties of Entrepreneurs - Marketing Finance, Human Resource,

Production;

Research - external problems, Mobility of Entrepreneurs, Entrepreneurial change,

occupational mobility - factors in mobility.
 Unit – 3
Entrepreneurial
Competencies:

Competency is composed of Knowledge, Abilities, Performance and Skills of

individuals.

Competency in the words of Spencer & Spencer is an underlying

characteristic of an individual that is causally related to criterion referenced
effective and superior performance in a job or situation.

Entrepreneurial Skills:
1. Creativity
2. Problem Solving
3. Decision Making Skills
4. Communication Skills
5. Leadership Quality
 Unit – 3
Entrepreneurial

How to Develop Competencies

 Unit – 3
Entrepreneurial
Elements of Entrepreneurial Behaviour / Gaining Competencies: Suggested by
David McClelland

1. Self Analysis

2. Personal Efficacy

3. Culture & Values

4. Risk Taking Behaviour

5. Technology Back up
 Unit –

Entrepreneurship Development Programmes (EDP):

EDPs are the sessions that equips the desiring candidates to imbibe the essence
of Entrepreneurial features.

EDP may be defined as a programme designed to help an individual in

strengthening his entrepreneurial motives and acquiring skills & capabilities
necessary for playing the Entrepreneurial role effectively.

The major objectives behind EDPs are:

 Strengthen the Entrepreneurial Qualities in individuals
 Support the National Economy
 Detailing the pros & cons of the Entrepreneurial ventures
 Spread knowledge of Government plans and compliance
 To encourage budding Entrepreneurs to avail new business opportunities
 Unit –

Entrepreneurial Training:

The EDPs normally pass through following three important phases:

 Pre-training phase – (Planning the Training, gauging the needs,

contracting with the Govt. Authorities like DIC etc.)

 Training phase - (Conducting the Training, Scheduling the Demo Sessions,

ensuring the timeliness)

 Post-training or follow-up phase – (Providing Directions & Support)

 Unit – 3
Role of Support
Key Functions of the Agencies in Entrepreneurial Development:
Following are the key functions of the Agencies constituted by the
government:
 Assistance with respect to starting up the project (feasibility reports
assistance, credit facility etc.)

 Impart training to budding entrepreneurs and create awareness around

opportunities for new ventures

 Consultancy services and potential surveys for the opportunities

 Organising research & development camps, conferences etc.

 To facilitate expansion projects through viability guidance

 Identification of the entrepreneurial barriers and providing resolutions

 Unit – 3
Role of Support
DIC – District Industrial Center:

DIC is the institution at the district level which provides all the services
and support facilities to the entrepreneurs for setting up small scale
industries.

Functions:
o Identification of suitable and feasible schemes.
o Preparation of Feasibility reports
o Arrangement for credit facilities
o Assistance with machinery and equipments
o Provision for raw materials and extension services
o Assisting and guiding the entrepreneurs in exporting through the
proposed export cell.
o Recommending the industries to states and Central Government’s
for awards.
 Unit – 3
Role of Support
EDII – Entrepreneurship Development Institute of India:

The EDII was set up in 1983 as an autonomous institution

sponsored by the IDBI, IFCI, ICICI and SBI with the active support of
Gujarat Government.

Objective:
 To impart training and education to budding entrepreneurs and
develop the skills general managerial functions

 To create opportunities for self employment

 To augment the supply of Trainers-motivators for entrepreneurship

development

 Collaboration with the Indian and International companies to achieve

its objectives.
 Unit – 3
Role of Support
SISI – Small Industries Services Institute

SISI was established with the motive of providing growth to the small,
tiny and village enterprises in terms of output, employment and exports.

Small and Medium Enterprises (SME) sector is one of the fastest

growing industries and many of the countries have established SME
Development Agency (SMEDA) to monitor the progress of small scale
industries. In case of India, SISI is also referred as Small Industries
Development Organisation (SIDO) which was estd. in the year 1954.

SIDO is also known as the office of Development Commissioner (SSI),

under the department of small scale , Agro and Rural Industries Ministry
of India, New Delhi.
 Unit – 3
Role of Support

SISI – Small Industries Services Institute

Functions: They provide:

 Economic consultancy and EDP consultancy

 Trade and Market information

 Project profiles

 State and District Industrial Potential Survey

 Modernization and in plant studies & work shop facilities

 Unit – 3
Role of Support
NIESBUD – National Institute of Entrepreneurship and Small Business
Development

The NIESBUD was estd. in 1983 by the ministry of Industry (now

ministry of SSI) government of India as an apex body for coordinating and
overseeing the activities of various institutions/agencies engaged in
Entrepreneurship development particularly in the area of small industry
and small business.

Functions:

o To evolve standardized materials and processes for selection, training

, support and sustenance of entrepreneurs (potential and existing).

o To serve as an apex national level resource institute for accelerating

the process of entrepreneurship development ensuring its impact
across the country.
 Unit – 3
Role of Support
NIESBUD – National Institute of Entrepreneurship and Small Business
Development

Functions:

o To offer consultancy nationally / internationally for promotion of

entrepreneurship and small business development. Also affiliating
institutions / organisations in carrying out the training activities and
EDPs.

o To train trainers, promoters and consultants in various areas of

entrepreneurship development .

o To provide vital information and support to trainers, promoters and

entrepreneurs by organising research and documentation relevant to
entrepreneurship development.
 Unit – 3
Role of Support

NEDB – National Entrepreneurship Development Board

NEBD was established with the objective of promoting

entrepreneurship for encouraging self employment in small scale
industries and small business.

Functions:

 To identify and remove entry barriers for potential entrepreneurs (first

generation and new entrepreneurs) including study on
entrepreneurship development.

 To focus on existing entrepreneurs in micro, tiny and small sector and

identify & remove constraints to survival, growth and continuously
improve performance .
 Unit – 3
Role of Support

Functions:

 To facilitate the consolidation, growth and diversification of existing

entrepreneurial venture in all possible ways.

 To support skill up gradation and renewal of learning processes among

practicing entrepreneurs and managers of micro, tiny, small and
medium enterprises.

 Setting up incubators by the entrepreneurship development institutions

and other organisations devoted to the promotion of entrepreneurship
development.
 Unit – 3
R ole of Support Institutions
Directorates of Industries

 The Directorate of Industries is the executive agency for

the Promotion & Development of the village and small
industries sector.

 It acts under the overall guidance of SIDOs.

 It’s functions are of both Regulatory & Developmental in

nature. The directorate of industries has a network of district
industrial centre's (DICs) at the – District Level, Industrial
Officers at the Sub – Divisional Level & Extension
Officers at the Block Level functioning under its Control.
 Unit – 3
Role of Support
State Financial Corporations:

The SFC Act was passed in 1951. SFC provides financial

assistance to medium and small scale industries.

Government of India felt the need of improvement of the states

through infrastructural development. SFC diversified further and
1978 onwards it started assisting the large sized industries as
well.

Objective:
While the scope of financing was extended till the large sized
industries yet the major objective of SFC is to provide financial
assistance to medium and small scale industries who are engaged
in regional development.
 Unit – 3
Role of Support
State Financial Corporations:

Functions:

The major function of SFC include ensuring Loans and advances

to a subscription of debentures, of industrial concerns repayable
within twenty years.

Acting as Guarantor to the Industrial concerns with respect to

the due payments for the purchase of capital goods.

Criticism:
Inadequate Resources
High rate of Interest
Uncertain performance
 Unit – 3
Role of Support

Commercial Banks:

As a result of the Bank nationalization in 1969, Industrial sector

got a very important wing of borrowed funds through bank
credits and loans.

Objectives:

Commercial banks in co-ordination with the state financial

authorities involve itself in project appraisal. As a principle the
Commercial banks sanction the working capital requirements of
the firms at least three months before the commencement of the
production.
 Unit – 3
Role of Support
Commercial Banks:

Functions:

Commercial banks provide term loans to the industrial sector.

 Subscribe to the shares and debentures of the firms.

 Commercial banks have been permitted to hold the investments

in the Private corporate sector to an extent of 50%.
 Unit – 3
Role of Support

Innovation and Entrepreneurship

 Unit –

Design Thinking Process

Design thinking is a process for creative problem solving. Design
thinking has a human-centered core. It encourages organizations
to focus on the people they're creating for, which leads to
better products, services, and internal processes.

Design Thinking is a design methodology that provides a solution-

based approach to solving problems. Strategy builders tend to use
a six-stage process to organize their fact finding and decision
making:
(1) Empathy,
(2) Define,
(3) Ideate,
(4) Prototype,
(5) Test,
(6) Launch.
 Unit –

Role of consultancy organizations

in promoting Entrepreneurs
 Unit –

Problems and difficulties of Entrepreneurs - Marketing

Finance, Human Resource, Production:

Marketing Finance

Human Resource Production

 Unit – 3
Role of Support

Research - external problems,

Mobility of Entrepreneurs,
Entrepreneurial change,
Occupational mobility - factors in
mobility.
 Unit – 3
Role of Support

Research - External problems

 Unit – 3
Role of Support
Mobility of Entrepreneurs:

Entrepreneurial Mobility means movement of entrepreneurs

from one location to another and similarly from one occupation to
another, which affect the pace and pattern of entrepreneurship
development.

Occupational Mobility - means movement or changes in

occupation.
 Unit – 3
Role of Support
Factors affecting the Mobility of Entrepreneurs:

This mobility depends upon some factors like

1. Availability of raw material,
2. Infrastructure and labour,
3. Nearness to market,
4. Financial & Other Resources,
5. Knowledge,
6. Experience,
7. Socio – Cultural
8. Political situation
 Unit – 1

Thank You
 Unit – 4
Role of Central Government and State Government in promoting
Entrepreneurship

Introduction to various incentives, subsidies and

grants, Export Oriented Units, Fiscal and Tax concessions

available,

Women Entrepreneurs - Role, Problems and Prospects, Reasons for low women
Entrepreneurs,

Assistance Programme for Small Scale Units – Institutional Framework – Role of

SSI Sector in the Economy –

SSI Units – Failure, Causes and Preventive Measures – Turnaround

Strategies. Future of Entrepreneurship Development and Government,

Start Up India,

Make in India
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship

Introduction to various incentives, subsidies and grants :

An incentive is a motivational factor which induces a person to work hard or

to do his work more efficiently.

Many incentives are provided both by the Central and State Governments to
promote the growth of small-scale industries and also to protect them from
the onslaught of the large-scale sector.
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Introduction to various incentives, subsidies and grants :
Among the various incentives given to small-scale industries the following
deserve special mention:
• Reservation
• Preference in Government purchases
• Price preference
• Supply of raw materials
• Tax Relief
• RBI’s credit guarantee scheme
• Financial assistance
• Technical consultancy services
• Machinery on hire purchase basis
• Transport subsidy
• Training facilities
• Marketing assistance
• District Industries Centres (DICs)
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship

Export Oriented Units:

The Export Oriented Units (EOUs) scheme, introduced in early 1981, is
complementary to the SEZ scheme. The main objectives of the EOU scheme is
to increase exports, earn foreign exchange to the country, transfer of latest
technologies stimulate direct foreign investment and to generate additional
employment.

Initially, EOUs were mainly concentrated in

 Textiles and Yarn,
 Food Processing,
 Electronics,
 Chemicals,
 Plastics,
 Granites
 Minerals/Ores.
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Export Oriented Units:

EOU has extended it area of work which includes functions like

 Manufacturing,
 Servicing,
 Development of software,
 Trading,
 Repair, remaking, reconditioning, re-engineering including making of
gold/silver/platinum jewellery and articles thereof,
 Agriculture including agro-processing, aquaculture, animal husbandry, bio-
technology, floriculture, poultry, sericulture
 Granites & Mining
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Start Up India:
The Startup India campaign was launched in 2016 in order to increase
entrepreneurship in the country. Through this campaign, various aspects of
running a startup, such as bank financing, tax exemptions, simplifying the
process of registering the business and other benefits were targeted, in order
to make running a business more appealing to India’s youth.

Start Up Eligibility:
 A company that has been incorporated for less than 7 years qualifies
as a startup (Biotechnology – 10 Years)
 The annual turnover not be more than Rs 25 crores
 Innovative Developments – IPR & Technology Support
 New Incorporation required, not a split company
 Certification from the Inter-Ministerial Board setup
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Start Up India:

Under the Startup India program, eligible businesses can enjoy the following
tax exemptions:

 3 year tax holiday in a block of 7 years

 Exemption from tax on long-term capital gains
 Tax exemptions on investments above the fair market value
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship

Women Entrepreneurs - Role, Problems

and Prospects, Reasons for low
women
Entrepreneurs
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Women Entrepreneurs :

According to Government of India,

“An Enterprise owned and controlled by a Women having a

minimum financial interest of 51% of capital and giving at
least 51% of the employment generated by the enterprise to
Women is considered as Women Entrepreneurship.”

This definition went through refinement and post the

establishment of the Small & Tiny Enterprises Policy 1991
the stipulation of the percentage of Women Employed
in
the Enterprise was dropped.
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Promoting Women Entrepreneurs In India:

1. Small Industrial Development bank of

India (SIDBI)
2. Commercial Banks
3. Mahila Arthik Vikas Mandal (MAVIN)
4. Women Associations
5. Mahila Udyog Nidhi
6. Indira Mahila Yojna (IMY)
7. Women’s Development
Corporations (WDCs)
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Low Turn out of Women Entrepreneurs :

Key Reasons for Low turnout of women

entrepreneurs are as following:

1. Financial Constraints
2. Family ties
3. Social Attitude towards women
4. Low Mobility
5. Lack of Education
6. Low need for achievement
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
List of Women Entrepreneurs :

Role models in every sphere is very important. Every

successful person has the potential to become a role model for
others. Following are the examples of a few leading women
Entrepreneurs and Business Owners who are role models for
various budding Women Entrepreneurs:
1. Akhila Srinivasan, Managing Director,
Shriram Investments Ltd
2. Ekta Kapoor, Creative Director, Balaji Telefilms
3. Jyoti Naik, President, Lijjat Papad
4. Kiran Mazumdar-Shaw, Chairman and Managing
Director, Biocon
5. Ranjana Kumar, Chairman, NABARD
6. Ritu Kumar, Fashion Designer
 Unit-4: Role of Central Government and State Government in promoting
Entrepreneurship
Suggested areas for Women Entrepreneurship and Business
Food products manufacturing  Communication centres with
telecom, fax, browsing and Xeroxing
facilities.
Food processing and preservation.

Catering services and fast food centres.  Readymade garments, embroidering

and fashion designing.

Interior decoration.  Retail selling through different

methods.
DTP and Book binding.
 Art and painting works on commercial
decorations.
Maintenance of Dairy, Poultry and their
products.
 Diagnostic lab & pathology clinics.
Maintenance of house-hold appliances.
 Floral decorations.
Stationeries retailing.
 Jewellery
Manufacturing of note books and pads.
 Beauty centres
Packing & packaging
 Running old-age homes
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
SSI Units – Failure, Causes and Preventive Measures :

These are the few potential reasons why SSI fail:

1. Lack of adequate research

2. Unrealistic expectations
3. Lack of financial durability
4. Lack of Competitive edge
5. Excessive Caution
6. Lack of proper Vision and Mission
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship

Future of Entrepreneurship Development

and Government
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Make In India:

The Make in India program has been built on layers of collaborative effort.
There has been from Union Ministers, Secretaries to the Government of
India, state governments, industry leaders, and various knowledge partners.

The “Make in India” initiative is based on four pillars, which have been
identified to give boost to entrepreneurship in India, not only in
manufacturing but also other sectors.
1. New Processes
2. New Infrastructure
3. New Sectors
4. New Mindset

https://www.pmindia.gov.in/
 Unit – 4
Role of Central Government and State Government in
promoting Entrepreneurship
Advantages of Make in India:

 Develop Job Opportunity

 Ameliorate the Vicinity
 Expand GDP
 Fortify the Rupee
 Increase in Brand Value
 Up-gradation of Technology
 Ease of Business
 Availability of Young Minds
Thank You
 Unit – 5
ENTERPRISE

Creating Entrepreneurial Venture, Entrepreneurship Development Cycle,

Business Planning Process, The business plan as an entrepreneurial tool, Elements of

Business Plan, Objectives,

Market Analysis, Development of product / idea - Resources, Capabilities, and

strategies, identifying attributes of strategic resources, Opportunity Analysis,
innovator or imitator, SWOT analysis, Internal and External Environment
Analysis,

Industry Analysis, Embryonic Companies and Spin off’s, Porter’s five forces
model, Identifying the right Business Model Canvas, Seven Domains of John
Mullins, Opportunities in Emerging/Transition/Decline industries,
Opportunities at the bottom of the pyramid, Opportunities in social sector,
Opportunities arising out of digitization, Marketing, Finance, Organization &
Management

Ownership - Franchising, networking and alliances, Buying an existing business,

Critical risk contingencies of the proposal, Scheduling and milestones.
 Unit – 5
ENTERPRISE
Stages for starting New Venture:

To be a successful Entrepreneur it is necessary to have the

foresight and ability of sensing opportunities. These
opportunities lead to successful business venture.

Following are the key steps of starting new venture:

1. Scanning the Environment

2. Product Development and Selection

3. Project Report Preparation

4. Project Appraisal

5. Resourcing (implementation stage)

 Unit – 5
ENTERPRISE
Stages for starting New Venture: cont…

1. Scanning the Environment

 Personal Informal Sources: Family, Friends

 Personal Formal Sources: Banks, Institutions

 Impersonal Written Sources: Magazines, Reports

 Impersonal Oral Sources: Conferences, Word-of-mouth,

Interviews
 Unit – 5
ENTERPRISE
Stages for starting New Venture: cont…

2. Product Development and Selection

Environment scanning assists in generating possible options for

new venture. It’s time to choose the best possible option.
Following can be the ways of selection and development of new
product:

Solving People’s problem, Product Improvement, waste

management, Extending Market Research, Skills up gradation,

New ventures supporting the above points:

One shop leading to departmental stores, Hobbies converted into
profession, Typing Skills converted into typing school
 Unit – 5
ENTERPRISE
Stages for starting New Venture: cont…

3. Project Report Preparation

 Introduction of the Project proposal and Why this project

 (Attach) All relevant document for Unit (team) – Proprietorship,
Partnership..
 Brief Introduction of the promoters
 Product Details
 Marketing Strategy & Competition
 Manufacturing Process
 Plant Layout Plan
 Man Power requirements and the duties
 Total Cost and Means of Finance
 Financial Calculations (BEP, Credit terms etc..)
 Project Implementation Schedule
 AOD– Any other Details
 Unit – 5
ENTERPRISE
Stages for starting New Venture: cont…

4. Project Appraisal

 Technical Appraisal
 Financial Appraisal
 Economic Appraisal
 Management Appraisal
 Operational Appraisal
 Organisational Appraisal
 Unit – 5
ENTERPRISE
Stages for starting New Venture: cont…

5. Resourcing:

This is the implementation stage comprising of all essential works

required to set up the business venture – Procurement of land,
construction of the layout, installation of machinery, Obtaining
licenses and getting the registration at state and national authorities.

Categories of Resources:

o Physical Resources
o Technical Resources
o Financial Resources
o Human Resources
o Marketing Resources
 Unit – 5
ENTERPRISE

Entrepreneurial Development Cycle

Support
StimulAtion
SustAinAbility
EDC
 Unit – 5
ENTERPRISE
Business Plan:

Business Plan is like a road map for long-term perspective. It

takes the form of a written document and sets out the important
facts about the business, its history (if relevant), the current
position, the objectives and the business activities to be
undertaken.

Hence it’s vital to create a logical business plan for the

business Idea in hand.

Business plan assists in evaluating an opportunity, arranging

the requisite resources and generating the passion to get going.
 Unit – 5
ENTERPRISE
Business Plan consists of :

 Executive Summary

 Business Overview

 Product Description

 Market Analysis and Marketing Plan

 Operations Plan

 Management Plan

 Financial Plan

 Appendices or Exhibits
 Unit – 5
ENTERPRISE
Executive Summary:

 Brief of Business Idea and proposal

 Market Potential
 Brief of Resource Planning (Financial forecasting and HR)

Business Overview:

 Business Goals and Objectives

 Brief of Product / service offered
 Competitive advantage
 Brief of Legal attributes (Partnership deed/ Proprietorship)

Product Description:

 Product features
 Pricing Model
 Benefits from the product
 Unit – 5
ENTERPRISE

Market Analysis & Marketing Plan:

 Details of the target customers and Market segment

 Brief of Market trends and Buying practices
 Positioning
 Marketing Objectives
 Budget Forecasting
 Distribution Channel

Operations Plan:

 Identification of the processing cost

 Production Model / plant layout
 Brief of Machinery required
 Brief of R&D support expected
 Unit – 5
ENTERPRISE
Management Plan:

 Organization Structure
 SWOT analysis of the management
 Details of the key management personnel to be involved in
decision making

Financial Plan:

 Capital Structure
 Sources of Finance (Current sources and Potential)
 Accounting and Record keeping systems
 Formats / Proforma of the Financial statements
 Unit – 5
ENTERPRISE
Appendices or Exhibits:

 With respect to Business Planning points explained earlier all

related documents need to be attached as appendices:

o Resumes of the Key Management personnel

o Partnership Deed (copy)
o Patents rights (copy, if any)
o Pictures of the Product
o Dealer contract details copy
o Insurance Copy
 Unit –

Market Analysis, Development of product / idea -

Resources, Capabilities, and strategies, identifying
attributes of strategic resources, Opportunity
Analysis, innovator or imitator, SWOT analysis,
Internal and External Environment Analysis,
 Unit –

Market Analysis:

A market analysis is a quantitative and qualitative assessment of a

market. It looks into the size of the market both in volume and in value, the
various customer segments and buying patterns, the competition, and the
economic environment in terms of barriers to entry and regulation.

The purpose of market analysis is to gather data on customers and

potential customers. The collected data aids business decision making. This
therefore reduces the risks involved in making these decisions.
 Unit –

Market Analysis:Process

 Identification of the Purpose for Analysis

 Industry Scanning
 Assess Target Customers
 Competition Assessment
 Relevant Data Collection
 Analysis & recording of Findings
 Action Plan
 Unit : 5
Sources of New Business Ideas:

 Consumers
 Competitors
 Distribution Channels
 Government
 Research and Development

Methods of Generating New Ideas:

 Focus Groups
 Brainstorming Sessions
 Recording Market Observations
 Problem Inventory Analysis
 Unit –

Opportunity Identification: ENVIRONMENTAL SCANNING

Technological Factors

Economic Factors

Political & Legal Factors

Identification and Development of Busin

Socio – Cultural Factors

Demographic Factors

Ecological Factors
 Unit –
Steps in Opportunity Identification

 Opportunity Search (Observing Market Trends)

 Opportunity Analysis (Solving the Problem)

 Opportunity Selection (Finding the Gap post Analysis and

banking upon it(
 Unit –

Industry Analysis, Embryonic Companies and Spin off’s,

Porter’s five forces model, Identifying the right
Business Model Canvas, Seven Domains of John
Mullins, Opportunities in
Emerging/Transition/Decline industries,
Opportunities at the bottom of the pyramid,
Opportunities in social sector, Opportunities arising
out of digitization, Marketing, Finance,
Organization & Management
 Unit –

Industry Analysis:

An industry analysis is a business function completed by business owners

and other individuals to assess the current business environment. This
analysis helps businesses understand various economic pieces of the
marketplace and how these various pieces may be used to gain a competitive
advantage.

An industry analysis is a component of the business plan that provides

statistics about the market potential of your business, product and
services. Include specific information and statistics about growth patterns,
fluctuations related to the economy and income projections made about
the industry.
 Unit –

Industry Analysis: Process

• Overview of the industry.

• Industry trends and growth patterns

• Identify factors that influence the industry.

• Review of the Data Gathered

• Deliberation of Positioning in Industry & future course of action.

 Unit –

Business Model Canvas

The Business Model Canvas (BMC) is a strategic management tool
to quickly and easily define and communicate a business idea or
concept. It is a brief document which works through the
fundamental elements of a business or product, structuring an
idea in a coherent way.

Selecting Right Business Model Canvas

– Defining the purpose of the business.
– Customers and Value Propositions.
– Channels and Customer Relationships.
– Key Resources, Key Activities and Key Partners.
– Cost Structure and Revenue Streams.
– Coordinating
– Designing New Versions.
 Unit –

Five Forces Model – Porter’s Contribution

 Unit –

Five Forces Model – Porter’s Contribution

Threat to New Entrants

 Economies of Scale
 Capital requirement
 Switching costs
 Product differentiation
 Access to the distribution channel
 Government Policies

Rivalry among Competitors

 Competitive Structure
 Demand Conditions
 Exit Barriers
Bargaining power of Buyers
It constitutes the ability of the buyers, individually or
collectively, to force a reduction in the prices of products or services,
demand a higher quality or better service, or to seek more value for
their purchases in any way. Examples: Few buyers in the market,
Largest and only client, ability to start captive supply source.
 Unit –

Five Forces Model – Porter’s Contribution

Bargaining power of suppliers

Suppliers to the firm have a level of bargaining power. It
constitutes of supplier’s ability, individually or collectively, to force an
increase in the price of the products or services, or make the buyers
accept a lower quality of product or level of service.
Example: Few suppliers, Unique products or services, no
substitutes, not a significant buyer in size.

Threat to Substitute products

Example: Tea – Coffee, Alternative modes of Transport,
FAX and courier services, bulb – Tube light – CFL bulbs.
 Unit –

Seven Domain of John Mullins:

1. Market Attractiveness
2. Target segment benefits and Attractiveness
3. Industry attractiveness
4. Competitive & Economic Sustainability
5. Mission, Aspiration and Prosperity for Risk
6. Ability to execute on Critical Success Factor (CSF)
7. Correctedness Up & Down the Value Chain
 Unit –

Bottom of Pyramid :

In Economic Business terms the Bottom of Pyramid (BoP) is the

largest but the poorest socio-economic group. Legendary
Management thinker C. K Prahlad has contributed in this respect
through his Book “The fortune at the Bottom of the Pyramid” co-
authored with Stuart Hart. The tag line associated to the book was
– Eradicating Poverty through profits.

The BoP is a Socio Economic concept that constitutes to be a vast

segment of 2/3rd population of the world. This population is the
poorest and unserved market. Although the mission has obvious
challenges however the effort towards serving this section of the
pyramid benefits the marketers, consumers and society at large.
 Unit –

Characteristics of BoP Consumers:

• Significant Potential for Marketers (untapped market)

• Subsistence / Survival Livelihoods (limited exposure)
• BoP Penalty (No Access to advanced marketing opportunity)
• Potential of Higher orders / Bulk Purchases
• Branding & De-Branding (Brand is considered as premium
commodity, hence de-branding may be required)

The Entrepreneur essentially need to create Demand, ensure

Development of market, prepare & develop good designs, adopt
effective distribution system and connect to consumers with utmost
dignity.
 Unit –

Opportunities arising out of digitization :

Digitalization of business helps to improve the efficiency of its
process, consistency, and quality. It can: Integrate conventional
records or files into a digitalized form, eliminating redundancies and
shortening of communications chain. Improve and facilitate a better
informational exchange.

Benefits:
 Digital presence enhances visibility of Business
 Networking.
 Customer Centric
 Better decision-making.
 It improves efficiency and productivity.
 It encourages innovation.
 It makes communication and teamwork easier.
 It improves working conditions.
 Unit –

Ownership - Franchising, networking and alliances,

Buying an existing business, Critical risk contingencies
of the proposal, Scheduling and milestones.
 Unit – 5
ENTERPRISE

Ownership – Business Forms

• Franchising

• Networking and alliances

• Buying an existing business

 Unit – 5
ENTERPRISE

Critical risk contingencies of the proposal:

While preparing the Business proposal an Entrepreneur has to consider all

the probable risk of the business and the possible solutions.

1. Understanding of Business related Risk (Respective business)

2. Consideration of every section of the proposal as unique project

3. Expert Opinion

4. Timely submission of Proposal to respective Authority

5. Contingency Planning
 Unit – 5
ENTERPRISE

Scheduling and milestones:

Milestones provide a way to more accurately estimate the time it will take
to complete your project, making them essential for precise project
scheduling. They are often used in scheduling methodologies, such as the
Critical Path Method, which can determine major scheduling periods.

The milestone schedule is a summary level schedule that allows the

project team leader to review and identify all of the significant and major
project related milestones that may exist in the course of a project, and can
be proven helpful in making sure that nothing falls behind schedule of off
the radar entirely.
Thank You