Class 11

Business Studies
Rajesh Gidwani
9824590506
Chapter 8
Small Business
&
Entrepre neurship
 SMALL BUSINESS
Small scale industries contribute significantly to
the development process and acts as a vital link in
industrialization in terms of production,
employment and exports for economic prosperity
by widening the entrepreneurial base and use of
local raw materials and indigenous skills
Types of S m a l l
Business
 Types of Small Business
Business enterprises are classified as
Manufacturing Enterprises, Service Enterprises,
Village Industries and Cottage Industries

Among these manufacturing and service enterprises are

again subdivided into Micro, Small and Medium Enterprises
 Types of Small Business
The definition used by the Government of India to
describe small industries is based on the investment in
plant and machinery

The Micro, Small and Medium Enterprises Development

(MSMED) Act 2006 has been passed by the Government of
India to address the issues of small enterprises
 Types of Small Business
Investment in Plant and Machinery

Types of Business Manufacturin

g Services Enterprises
Enterprises
Not exceeding Rs. 1 Not exceeding Rs.
Micro Enterprise
cr. 10 Lakhs

More than Rs. 1cr. but

More than 10 lacs but not
Small Enterprise not exceeding Rs.10
exceeding 2 crores
crores

More than 10 crores but More than 2 crores but

Medium Enterprise not exceeding 50 not exceeding 5
crores crores
 Village
In d u s tries
 Village Industries
They are located in rural area which produces any
goods, renders any service with or without the use
of power and in which the fixed capital investment
per head or artisan or worker is specified by the
central government from time to time
 Cottage
In d u s tries
 Cottage Industries
They are also known as Rural Industries or
Traditional Industries

They are not defined by capital investment criteria but on

the basis of it’s characteristics
 Characteristics of Cottage Industries
• Organised by individuals with private resources.
• Normally use family labour and locally available
talent.

• Simple equipments are used.

 Characteristics of Cottage Industries

• Small capital investment.

• Produce simple products, normally in their own
premises.

• Production of goods using indigenous technology.

 Role of
Small Business
in Rural India
Small business organizations play an
important role in the socio economic
development of the country
 Role of Small Business in Rural India
1. Multiple sources of income for family
 Role of Small Business in Rural India
2. Self employment opportunities
Small business provides self employment
opportunities in commerce, manufacturing and
service segments
 Role of Small Business in Rural India
3. Promotion of agro industries
Small business helps to promote agro based
rural industries
 Role of Small Business in Rural India
4. Employment Opportunities
It provides employment opportunities for
artisans and the weaker sections of society
 Role of Small Business in Rural India
5. Migration of rural people has been stopped
Migration of rural people to urban areas in search of
employment has been stopped
 Role of Small Business in Rural India
6. To over come poverty
Helped to solve the problem of poverty and
unemployment
 Role of Small Business in Rural India
7. Equality of income
Helped to reduce the income inequalities up to a
certain extent
 Role of Small Business in Rural India
8. Industrial growth
Accelerated industrial growth of the country
Role of Small Business in Rural India
1. Multiple sources of income for family
2. Self employment opportunities
3. Promotion of agro industries
4. Employment Opportunities
5. Migration of rural people has been stopped
6. To over come poverty
7. Equality of income
8. Industrial growth
Government Assistance
to Small Industries

and Small Business Units

 Govt. Assistance to Small Business

3. National Small Industries Corporation (NSIC)

 Govt. Assistance to Small Business
National Small Industries Corporation
● Set up in the year 1955 to promote and foster the growth of SSIs in
India.
● Supply of indigenous and imported machines on hire purchase
basis.
● Supply of raw materials – locally and imported.
● Support in export of products.
● Monitoring and advisory services.
● Providing latest technology.
● Awareness on technological upgradation.
● Development of software technology parks and technology transfer
centres.
Govt. Assistance to Small Business
6. District Industries Centres (DICs)
 Govt. Assistance to Small Business
District Industries Centres
● Established in 1978
● To support small entrepreneurs at district level.
● Provides all facilities and support to set up small and village industries.
● Identification of suitable schemes for entrepreneurs by Central and State
Govts.
● Preparation of feasibility reports on each industry.
● Arrangement of credit facilities and equipments.
● Arrangement of raw materials.
● To impart training for artisans, entrepreneurs etc.
 Govt. Assistance to Small Business
1. National Bank for Agriculture and Rural Development
(NABARD)
2. Rural Small Business Development Centre (RSBDC)

3. National Small Industries Corporation (NSIC)

4. Rural and Women Entrepreneurship Development (RWED)

5. Scheme of Fund for Regeneration of Traditional Industries

(SFURTI)
6. District Industries Centres (DICs)
Entrepreneurship
Development
 Entrepreneurship Development
Entrepreneurship is the process of setting up of one’s own
business
The person who sets up the business is entrepreneur and
the outcome of the process (business unit) is called
enterprise

The word entrepreneur is derived from the French verb

entreprende, which means to undertake.
 Entrepreneurship Development
“Entrepreneur is a person who organizes the business,
undertakes the risk and enjoys the profit”

– Richard Cantillon_French Economist

 Entrepreneurship Development
An entrepreneur is basically a businessman and he brings
together the factors of production such as land, labour and
capital and organizes it
 Entrepreneurship Development
An entrepreneur is more than a businessman, if a
businessman brings some innovation to his activities and
eyes on value addition to his products or services, he is
called an entrepreneur

All entrepreneurs are businessmen, but all businessmen

are not entrepreneurs
 Entrepreneurship Development
Entrepreneurship is the purposeful activity of an
individual or a group of associated individuals,
undertaken to initiate, maintain or organize profit
oriented business unit for production or distribution
of economic goods and services
Characteristics of
Entrepreneurship
 Characteristics of Entrepreneurship
1. Systematic activity
Entrepreneurship is a systematic, step by step and
purposeful activity

It requires skill, knowledge and competency which can be

acquired, learnt and developed through education,
training, observation and experience
We can say the entrepreneurs are made but not born
 Characteristics of Entrepreneurship
2. Lawful and purposeful activity
The aim of entrepreneurship is to run a lawful
business
 Characteristics of Entrepreneurship
3. Innovation and Creativity
Entrepreneur brings innovation and creativity to the
business
 Characteristics of Entrepreneurship
4. Organizes production
The entrepreneur brings the idea of business and
the factors of production, thus he organizes the
production activities
 Characteristics of Entrepreneurship
5. Risk taking
The entrepreneur takes all the risks in the
business as he brings all the factors of
production including capital
 Characteristics of Entrepreneurship

1. Systematic activity
2. Lawful and purposeful activity
3. Innovation and Creativity
4. Organizes production
5. Risk taking
Start-up India
Scheme
 Startup India Scheme
Startup India Scheme is an important initiative by
Govt. of India to promote a strong ecosystem for
nurturing innovation and startup (new enterprises)
in the country
 Startup India Scheme
As per the notification of the Ministry of Commerce and
Industry, a startup means:
1. An entity incorporated or registered in India.
2. Not older than 5 years.
3. Annual turnover does not exceed Rs.25 crores in any
preceding year.
4. Working towards innovation, development or
commercialisation of products or services with the support of
technology or Intellectual Property Rights (IPR) and Patents.
 Popular Startup India Scheme
Paytm, Flipcart, Snapdeal, Swiggy, Bigbasket,
Byju’s App, Ola Cabs, Make My Trips, ShopClues,
OYO Rooms, Zomato, Redbus, Uber Eats etc.
Start-up India
Action Point
 Startup India – Action Point
1. Simplification and hand-holding
Formalities simplified and extended support to the
startup ventures
 Startup India – Action Point
2. Startup India Hub
To create a single point contact for the entire startup
system and to enable knowledge exchange and
access to funding
 Startup India – Action Point
3. Legal support and fast tracking Patent
Examination
To give protection for patents, trademark and
designs of innovative startups through SIPP
(Startups Intellectual Property Protections)
 Startup India – Action Point
4. Easy Exit
In the event of failure and wind up of operations,
they can reallocate capital and resources towards
more productive avenues

Thus the entrepreneurs can easily exit from the

business if required
 Startup India – Action Point
5. Incubator setup
The government envisages setting up of incubators
across the country in PPP mode (Private Public
Partnership)
 Startup India – Action Point
6. Tax exemption
The profit of startup initiatives are exempted from
Income Tax for a period of 3 years
 Startup India – Action Point
1. Simplification and hand-holding

2. Startup India Hub

3. Legal support

4. Easy Exit

5. Incubator setup

6. Tax exemption
Ways to Fund
Startup
 Ways to Fund Startup
1. Boot Strapping
Self financing by the promoters from their personal
savings and resources
 Ways to Fund Startup
2. Crowd Funding
Pooling resources by a group of people for a
common goal especially through internet platforms
 Ways to Fund Startup
3. Angel Investment
Angel investors are the individuals with surplus cash
who have keen interest to invest in startups

They also offer mentoring or advice along with capital

 Ways to Fund Startup
4. Venture Capital
Venture capitalists provide professionally managed
funds to companies and startups that have huge
potential

It is also called risk capital as it is invested in new ventures

Eg: Accel Partners, Blume Ventures etc.
 Ways to Fund Startup
5. Business Incubators and Accelerators
Incubators provide funds for startups in the early
stage of its business, whereas accelerators help the
startups to run or to take a giant leap in business

Eg: Angel Prime, Khosla Labs, Startup Village etc.

 Ways to Fund Startup
6. Microfinance and NBFCs
Microfinance is a category of financial services targeted at
individuals and small business who lack access to conventional
banking or who have not qualified for a bank loan

Eg: BSS Microfinance P Ltd. , Asirvad Microfinance Pvt. Ltd. etc.

 NBFCs
Non Banking Financial Companies are registered
under Indian Companies Act and they perform
lending functions to public but they cannot accept
demand deposits

Eg: Mahindra & Mahindra Financial Services Ltd.,

Muthoot Finance Ltd., Bajaj Finance Ltd. etc.
 Ways to Fund Startup
1. Boot Strapping
2. Crowd Funding
3. Angel Investment
4. Venture Capital
5. Business Incubators and Accelerators
6. Microfinance and NBFCs
 Intellectual
Property Rights
(IPR)
 Intellectual Property Rights (IPR)
Intellectual Property is a category of property that
includes intangible creations of human intellect

The most prominent types of intellectual properties are

trade secrets, copyrights, patents, trademarks etc.
 Intellectual Property Rights (IPR)

All inventions begin with an idea

Once the idea becomes an actual product, that idea
is treated as an intellectual property
 Intellectual Property Rights (IPR)
The legal rights conferred on such products (idea) are
called IPR

Once it is allotted to a person by the Govt. authority, he/she

can rent, give or sell it to others
 Intellectual Property Rights (IPR)
Intellectual property is divided into two categories:

1. Industrial properties
Trademarks, industrial designs etc.

2. Copyrights
Literary and artistic works such as novels,
poems, plays, films music, photographs,
drawings, paintings, sculptures,
architectural designs etc.
 Types of
Intellectual Properties
 Types of IPs
1. Copy Right
It is the right to “not copy” conferred upon the
creators of literary, artistic, musical, sound
recording, films etc.
 Types of IPs
2. Trademark
Any word, name, or symbol that gives an identity to
goods or service made by an individual, company,
organization etc.

To register the trademark you can visit

www.ipindia.nic.in
 Types of IPs
3. Geographical Indication
GI is an identification which identifies agricultural,
natural or manufactured products originating from a
definite geographical territory

Eg: Banaras Brocades, Kashmiri Pashmina Woolen

Shawl, Nagpur Orange etc.
 Types of IPs
4. Patent
It is an exclusive right granted by the government to
prevent others from making, using, offering for sale,
selling or importing the invention

For an invention to be patentable, it must be new, non-

obvious (not easily discoverable) and having an industrial
application