Entrepreneur

Competencies
Competencies
Competency is composed of knowledge, skills,
abilities, traits and other characteristics for successful
job performance.
An entrepreneur is expected to interact with these
environmental forces which require him to be highly
competent in different dimensions like intellectual,
attitudinal, behavioral, technical, and managerial
aspects.
Need for Entrepreneur
Competencies
Entrepreneurial competencies are the skills necessary
for an entrepreneur to venture into an enterprise
Organize and manage an enterprise competently to
realize the goal for which the enterprise is established.
COMPONENTS OF ENTREPRENEURIAL COMPETENCIES
ATTITUDINAL COMPETENCY ATTRIBUTES
An attitude is a hypothetical construct that represents
an individual’s degree of like or dislike for something.
Attitudes are generally positive or negative views of a
person, place, thing, or event.
 Attitudes are judgments of an individual.
Behaviour in a given situation can be viewed as a
function of the individual’s attitude towards the
situation.
Self Confidence
Self-confidence is an essential trait in an entrepreneur
because he is regularly called upon to perform tasks
and make decisions that require great amounts of
faith and belief in himself to achieve the
predetermined goals.
Self Esteem
Self-esteem of an entrepreneur represents his ability to
develop healthy confidence and respect for himself.
Dealing with Failures
Entrepreneurship is about getting up whenever the
business fails, and learning from that failure. An
entrepreneur believes that failure is part of the
entrepreneurial process, and often without it, success
would not be possible.
Tolerance for Ambiguity
In the entrepreneurial process tolerance for ambiguity
refers to the ability of an entrepreneur to perceive
ambiguous situation as desirable, challenging, and
interesting.
Concern for high quality
 An entrepreneur has a concern for high quality of his
products and services to meet or surpass existing
standards of excellence in a faster, better and cheaply
way.
Locus of Control (LOC)
Locus of control is the system of belief of an individual
who perceives the outcome of an event as being either
within or beyond his personal control.
Entrepreneurs tend to believe in their own ability to
control the outcomes to their efforts by influencing the
existing environment, rather than leave everything to
luck.
 Behavioral
BEHAVIORAL competency
COMPETENCY ATTRIBUTES of
an entrepreneur refers to
the underlying charecteristics having casual
relationship with effective or superior performances in
the process of carrying on his business activities.
Initiatives
Initiative of an entrepreneur refers to his behavior with
a preference for taking action on different
responsibilities or assignments.
Sees and Acting on Opportunities
Sees and acting on opportunities refers to the unique
entrepreneurial behaviour which helps him to be alert
to information and ability to process it in order to
identify and recognize the potential business
opportunities even before his competitor.
Persistence
Persistence of an entrepreneur denotes the ability
which keeps him constantly motivated even when he is
confronted by obstacles and willing to keep trying
when things go wrong.
Assertiveness
Assertiveness of an entrepreneur is about his rights or
point of view without either aggressively threatening
the rights of others (assuming a position of
dominance) or submissively permitting others to
ignore.
Need for achievement
Successful entrepreneurs are characterised by a need
for achievement which motivates them to take up
responsibilities for finding solutions to problems.
Need for autonomy
 The need for autonomy of an entrepreneur is
characterized by a drive to control and influence
others, a need to win arguments, a need to persuade
and prevail.
Risk-taking
Entrepreneurs are essentially persons who take
decisions under uncertainty and therefore they are
willing to bear risk.
Innovation
Innovation refers to characteristic of an individual
who has interest and desire to seek changes in
techniques and ready to introduce such changes into
his operations
Creativity
An entrepreneur is said to be creative when he is able
to identify a gap in the market and think up a product
or service to meet that gap.
Creativity of an entrepreneur also implies the ability to
do old thinks in a new way or able to give new
solutions.
MANAGERIAL COMPETENCY ATTRIBUTES
Managerial Competency of an entrepreneur is the
ability to direct his staff and define the expected
outcomes clearly and finally to get the things done at
the best and cheapest ways and means.
Information seeking
An entrepreneur has an urge to look for the required
information in order to make an informed decision, for
example, selecting, starting and successfully managing
the desired business
Systematic planning
An entrepreneur is expected to have systematic
planning which will help him to prepare an action plan
for every area of operation in order to achieve the pre
determined goals.
Problem solving
Problem solving refers to the application of
appropriate knowledge and skills in order to solve a
problem arising while carrying on the business.
Persuasion
Persuasion in entrepreneurship refers to the ability of
entrepreneurs to link, convince and influence other
individuals, groups, agencies, creditors, debtors,
customers and even competitors in order to create a
contact and maintain good rapport.
Goal setting & Perseverance
Goal setting refers to the ability of an entrepreneur to
set clear and specific goals and objectives.
 Successful entrepreneurs are able to achieve great
things only by overcoming the obstacles that stand in
their way.
Therefore they need to have perseverance which
implies commitment, hard work, and patience,
endurance apart from being able to bear difficulties
calmly and without complaint.
Communication Skill
Communication skill refers to the ability of an
entrepreneur to transfer ideas, plans,
policies and programmes to employees, debtors,
creditors, customers and everyone who
is connected with the business in order to inform,
influence and to express his feelings.
Technical knowledge
An entrepreneur needs to address the rapid technical
changes in the industry. Higher
levels of technology must be introduced in the
production methods in order to achieve
productivity demands.
Social skill
Social skill of entrepreneurs include social perception
(the ability to perceive others
accurately), expressiveness (the ability to express
feelings and reactions clearly and
openly), impression management (skill in making
favorable first impressions on others),
and social adaptability (proficiency in adapting one’s
actions to current social contexts) in
the process of managing his business.
Other Competencies
Opportunity competencies : Competencies related to recognizing and developing
market opportunities through various means .
Relationship competencies : Competencies related to person-to-person or individual-
to-group-based interactions, e.g., building a context of cooperation and trust, using
contacts and connections, persuasive ability, communication and interpersonal
skill .
Conceptual competencies : Competencies related to different conceptual abilities,
which are reflected in the behaviors of the entrepreneur, e.g., decision skills,
absorbing and understanding complex information, and risk-taking, and
innovativeness .
Organizing competencies : Competencies related to the organization of different
internal external human, physical, financial and technological resources, including
team-building, leading employees, training, and controlling
Strategic competencies : Competencies related to setting, evaluating and
implementing the strategies of the firm.
Commitment competencies : Competencies that drive the entrepreneur to move
ahead with the business.
Government Support to Entrepreneurs
An entrepreneur requires a continuous flow of funds not
only for setting up of his/ her business, but also for
successful operation as well as regular up gradation/
modernization of the industrial unit.
To meet this requirement, the Government (both at the
Central and State level) has been undertaking several
steps like setting up of banks and financial institutions;
formulating various policies and schemes, etc. All such
measures are specifically focused towards the promotion
and development of small and medium enterprises.
The government of India has been taking active steps to promote
entrepreneurship in various industry & service sectors. It has
declared several policy measures and is implementing schemes and
programmes to enhance the global competitiveness of small
enterprises across the country.
The Ministry of Micro, Small and Medium Enterprises is the nodal
Ministry for formulation of policies, programmes and schemes,
their implementation and related co- ordination, for the promotion
and development of small scale industries in India. The role of the
Ministry is to assist the States in their efforts for the growth of the
small scale sector, by enhancing their competitiveness in an
increasingly liberalized economy. It is assisted by an attached office
and two public sector enterprise, namely:
Micro, Small and Medium Enterprises Development
Organization (MSME-DO)
National Small Industries Corporation Ltd (NSIC)
Khadi and Village Industries Commission (KVIC)
Coir Board
Micro, Small and Medium Enterprises- Development
Organization (MSME-DO). It is the apex body for assisting
the Government in formulating, coordinating,
implementing and monitoring policies and programmes
for micro, small and medium enterprises (MSMEs) in the
country. MSME-DO provides a comprehensive range of
common facilities, technology support services, marketing
assistance, entrepreneurial development support, etc.
Coir Board :- is a statutory body, established under the
Coir Industry Act, 1953, for the promotion and
development of coir industry in India as well as for
uplifting the living conditions of the workers engaged in
this industry.
National Small Industries Corporation Ltd (NSIC) :-
was established by the Government with a view to
promoting, aiding and fostering the growth of micro,
small and medium enterprises in the country, with a
focus on commercial aspect of their operations. It
implements several schemes to help the MSMEs in the
areas of raw material procurement, product
marketing, credit rating, acquisition of technologies,
adoption of improved management practices, etc.
Khadi and Village Industries Commission (KVIC) :-
established under the Khadi and Village Industries
Commission Act, 1956, as a statutory organisation
engaged in promotion and development of khadi and
village industries for providing employment
opportunities in the rural areas
Role of Government to support
Entrepreneurship
(a) To provide information on regulations, standards,
taxation, customs duties, marketing issues;
(b) To advise on business planning, marketing and
accountancy, quality control and assurance;
(c) To create incubator units providing the space and
infrastructure for business beginners and innovative
companies, and helping them to solve technological
problems, and to search for know-how and promote
innovation; and
(d) To help in looking for partners, in order to
stimulate entrepreneurship and improve the business
environment for small enterprise.
Trainings
There are a number of Government organizations as
well as NGOs who conduct EDPs and MDPs. These
EDPs and MDPs and are conducted by MSME's,
NIESBUD, NSIC, IIE, NISIET, Entrepreneurship
Development Institutes and other state government
developmental agencies.
Marketing Assistance
There are Governmental and non-governmental
specialized agencies which provide marketing
assistance. Besides promotion of MSME products
through exhibitions, NSIC directly market the MSME
produce in the domestic and overseas market.
NSIC also manages a single point registration scheme
for manufacturers for Govt. purchase.
Units registered under this scheme get the benefits of
free tender documents and exemption from earnest
money deposit and performance guarantee.
Promotional Schemes
Government accords the highest preference to
development of MSME by framing and implementing
suitable policies and promotional schemes.

Besides providing developed land and sheds to the

entrepreneurs on actual cost basis with appropriate
infrastructure, special schemes have been designed for
specific purposes like quality upgradation, common
facilities, entrepreneurship development and
consultancy services at nominal charges.
Concession on Excise Duty
MSME units with a turnover of Rs. 1 crore or less per
year have been exempted from payment of Excise
Duty. Moreover there is a general scheme of excise
exemption for MSME brought out by the Ministry of
Finance which covers most of the items. Under this,
units having turnover of less than Rs. 3 crore are
eligible for concessional rate of Excise Duty.
Moreover, there is an exemption from Excise Duty for
MSME units producing branded goods in rural areas
Credit Facility to MSME
Credit to micro, small and medium scale sector has been covered
under priority sector lending by banks.
Small Industries Development Bank of India (SIDBI) has been
established as the apex institution for financing the MSME.
Specific schemes have been designed for implementation
through SIDBI, SFCs, Scheduled Banks, SIDCs and NSIC etc.
Loans upto Rs. 5 lakhs are made available by the banks without
insisting on collaterals.
Further Credit Guarantee Fund for micro, small and medium
enterprises has been set up to provide guarantee for loans to
MSME up to Rs. 25 lakhs extended by Commercial Banks and
some Regional Rural Bank.
 All the State Governments provide technical and other support services to
Policies and Schemes for Promotion of MSME Implemented by State Governments

small units through their Directorates of Industries, and District Industries

Centres. Although the details of the scheme vary from state to state, the
following are the common areas of support.
(i) Development and management of industrial estates
(ii) Suspension/deferment of Sales Tax
(iii) Power subsidies
(iv) Capital investment subsidies for new units set up in a particular district
(v) Seed Capital/Margin Money Assistance Scheme
(vi) Priority in allotment of power connection, water connection.
(vii) Consultancy and technical support
Government of India runs a scheme for giving National Awards to micro,
small and medium scale entrepreneurs providing quality products in 11
selected industry groups of consumer interest. The winners are given
trophy, certificate and a cash price of Rs. 25000/- each.
District Industries Center
The concept of District Industries Center came during
the year 1977, when Government of India announced
the new Industrial policy on 23.12.1977.
It laid special stress on the development and
promotion of small scale, village and cottage
industries.
In each district, one agency was created to deal with all
requirements of small and village industries.
Up to1991, 422 DICs were in operation in the country,
almost one for each district. These DICs have assisted
more than 1.5 lakh unit generating employment for
more than 10.3 lakh persons.
Till March 31st 1998, 422district industries
centres(DICs) have been set up covering 431 districts of
country leaving out the metropolitan cities and some
new districts.
Objective of DIC
 To develop entrepreneur skills of people.
To motivate for self employment.
To providing all the necessary facility in one roof.
To reduce regional imbalance of development.
To Cheek in migration
Functions of DIC
Infrastructure Assistance to Entrepreneurs.
Recommendation for loans from financial Institutions &
banks.
Implementation of Incentives Scheme
Inspection and recommendation of Investment
Employment Generation Programmes
Special Component Plan (SCP) and Tribal Sub Plan
(TSP)Implementation and Monitoring of Special
Component Plan (SCP) and Tribal Sub Plan (TSP) schemes
to provide assistance to the SC and ST;
Entrepreneurship development and Awareness
SISI : Small Industries Service Institute
 The small Industries Service Institute (SISI) are the
field offices of Small Industries Development
Organisation (SIDO), Ministry of Small Scale
Industries, Govt. of India, set up for the promotion
and development of Small Scale Industries in the State
in the early fifties.
 This Institute provides support / services to the State
Government as well as co-ordinates various activities at
the state level for promotion and development of small
scale industries.
Functions of SISI
To assist existing and prospective entrepreneurs through technical and managerial
counseling such as help in selecting the appropriate machinery and equipment,
adoption of recognized standards of testing, quality performance etc;
Conducting EDPs all over the country;
To advise the Central and State governments on policy matters relating to small
industry development;
To assist in testing of raw materials and products of SSIs, their inspection and
quality control;
To provide market information to the SISI’s;
To recommend SSI’s for financial assistance from financial institutions;
To enlist entrepreneurs for partition in Government stores purchase programme;
Conduct economic and technical surveys and prepare techno-economic feasible
reports for selected areas and industries.
Identify the potential for ancillary development through sub-contract exchanges;
Organize seminars, Workshops and Industries Clinics for the benefit of
entrepreneurs.
EDII
The Entrepreneurship Development Institute of India
(EDI), an autonomous body and not-for-profit
institution, set up in 1983, is sponsored by apex
financial institutions, namely the IDBI Bank Ltd, IFCI
Ltd. ICICI Ltd and State Bank of India (SBI). The
Institute is registered under the Societies Registration
Act 1860 and the Public Trust Act 1950.
EDI, an autonomous institution set up in 1983 as a
pioneering institute for Entrepreneurship Development
and Training in India and around the globe.
The driving values at the Institute are innovation,
experimentation, risk-taking, inclusiveness, thinking
out of the box and to offer need based & socially
relevant solutions.
EDI conducts several training programmes – both
national and international, implements projects for
the state governments, central government and
international organisations, and offers two unique Post
Graduate Programmes under its Centre for
Entrepreneurship Education & Research.
NEISBUD
The National Institute for Entrepreneurship and Small
Business Development is a premier organisation of Ministry
of Micro, Small and Medium Enterprises engaged in
training, consultancy, research, etc. in order to promote
entrepreneurship.
The major activities of the Institute are Training of Trainers,
Management Development Programme, Entrepreneurship-
cum-Skill Development Programme, Entrepreneurship
Development Programme and Cluster Intervention.
The Institute has trained more than 2.98 lakh trainees
including 3,000 persons from more than 125 countries till
31st July, 2014
Objectives of NEISBUD
NIESBUD is an apex body established by Ministry of Micro, Small & Medium Enterprises,
Government of India.
The Objectives are as follows:-
To evolve standardised materials and processes for selection, training, support and sustenance of
entrepreneurs, potential and existing.
To help/support and affiliate institutions/organisations in carrying out training and other
entrepreneurship development related activities.
To serve as an apex national level resource institute for accelerating the process of entrepreneurship
development ensuring its impact across the country and among all strata of the society.
To provide vital information and support to trainers,promoters and entrepreneurs by organising
research and documentation activities relevant to entrepreneurship development
To train trainers, promoters and consultants in various areas of entrepreneurship development
To offer consultancy nationally/internationally for promotion of entrepreneurship and small business
development.
To provide national/international forums for interaction and exchange of experiences helpful for
policy formulation and modification at various levels.
To share international experience and expertise in entrepreneurship development.
To share experience and expertise in entrepreneurship development across national frontiers.
NEDB
Objectives :
The main objective of the National Entrepreneurship Development Board (NEDB) Scheme is
promotion of entrepreneurship for encouraging self-employment in small scale industries and small
business.
The scheme covers the following activities :-
(i) To identify and remove entry barriers for potential entrepreneurs (first generation and new
entrepreneurs) including study on entrepreneurship development.
(ii) To focus on existing entrepreneurs in micro, tiny and small sector and identify and remove constraints
to survivals, growth and continuously improve performance.
(iii) To facilitate the consolidation, growth and diversification of existing entrepreneurial venture in all
possible ways.
(iv) To support skill upgradation and renewal of learning processes among practising entrepreneurs and
managers of micro, tiny, small and medium enterprises.
(v) To sensitise to support agencies in the area of entrepreneurship about the current requirement of
growth.
(vi) To act as catalyst to institutionalise entrepreneurship development by supporting and strengthening
state level institutions for entrepreneurship development as most entrepreneurship related activities
take place at the grass root level and removing various constraints to their effective functioning.
(vii) Setting up of incubators by entrepreneurship development institutions and other organisations
devoted to the promotion of entrepreneurship development.
Sources of finance
Long Term: The sources of long-term finance refer to the
institutions or agencies from, or through
which finance for a long period can be procured.
(a) Capital Market
(b) Special Financial Institutions
(c) Mutual Funds
(d) Leasing Companies
(e) Foreign Sources
(f) Retained Earnings

Short Term :
Capital Market
Capital market refers to the organisation and the mechanism
through which the companies, other institutions and the
government raise long-term funds.
1. Equity Capital (Issue of Ordinary Shares)

 The company sells shares in the business to raise money

 Dividends may be paid to the shareholders out of the profits each

year
 No interest has to be paid on the money raised
 Each new shareholder has a say in the running of the company
Special Financial Institution(SFI) for long term
loans
The loan and interest is paid back in equal instalments
over the length of the loan
A number of special financial institutions have been
set up by the central and state governments to provide
long-term finance to the business organisations and
subscribe to their share and debentures
Industrial Finance Corporation of India (IFCI),
Industrial Investment Bank of India (IIBI),Industrial
Credit and Investment Corporation of India (ICICI),
Industrial Development Bank of India (IDBI),
Infrastructure Development Finance Company Ltd.
(IDFC),Small Industries Development Bank of India
(SIDBI)etc
Leasing
 A firm agrees with a financial institution to pay an agreed sum
of money each month in eturn for the use of an asset
 The firm never owns the asset
 The firm may end up paying more in the long term than the
asset is worth
 Leasing facility is usually provided through the mediation of
leasing companies who buys plant and machineries from
manufacturers and rent it for specified time period.
 For this purpose a proper lease agreement is made between the
lessor (leasing company) and lessee (the company hiring the
asset).
Foreign Sources
Foreign Sources also play an important part in
meeting the long-term financial needs of the business
in India. These usually take the form of (1) external
borrowings; (2)foreign investments and; (3) deposits
from NRIs.