Entrepreneurship is the process of creating something new and valuable, by investing time and

effort, accepting risk and gaining a reward for the risk and effort invested.
A person who sets up a business or businesses, taking on financial risks in the hope of profit2
Adam Smith
The entrepreneur as an individual who forms an organization for commercial purpose. He/She is
proprietary capitalist, a supplier of capital and at the same time a manager who intervenes
between the labor and the consumer.
Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist7
Different types of entrepreneurs:

On the basis of nature Clarence Danhof classified entrepreneurs into four
categories. These are
1. Innovative entrepreneurs: An innovative entrepreneur in one, who introduces
new goods, inaugurates new method of production, discovers new market and
recognizes the enterprise. It is important to note that such entrepreneurs can work
only when a certain level of development is already achieved and people look
forward to change and improvement.
2. Imitative entrepreneurs: These types of entrepreneurs creatively imitate the
innovative technical achievement made by another firm. Imitative entrepreneurs are
suitable for underdeveloped countries as it is hard for them to bear the high cost of
innovation.
3. Fabian entrepreneurs: Fabian entrepreneurs are characterized by very great
caution and skepticism to experiment any change in their enterprises. They usually
do not take any new challenge. They imitate only when it becomes perfectly clear
that failure to do not so would result in a loss of the relative position in the
enterprise.
4. Drone entrepreneurs: They are characterized by a refusal to adopt any change
even at cost of severely reduction of profit.
Some other types of entrepreneurs:

(i) Solo operators: These are the entrepreneurs who essentially work
alone and if needed at all employ a few employees. In the beginning most of the
entrepreneurs start their enterprises like them.
(ii) Active partners: Active partners are those entrepreneurs who start or
carry on an enterprise as a joint venture. It is important that all of them actively
participate in the operations of the business.
(iii) Innovators: Such entrepreneurs with their competence and creativity
innovate new products. Their basic interest lies in research and innovative activities.
(iv) Buyers entrepreneurs: These are the entrepreneurs who do not like to
bear much risk. They do not take the risk of production but take the risk of
marketing a product i.e. wholesaler and retailer.
(v) Life timers: These entrepreneurs believe business as an integral part
of their life. These entrepreneurs actually inherit their family business i.e. goldsmith,
potter etc.
(vi) Challengers: These are the entrepreneurs who initiate business
because of the challenges it presents. They believe that No risk, No gain. When
one challenge seems to be met, they begin to look for new challenges.
Beside these, there are Govt. and Non-govt. entrepreneurs.
An Economic Theory: Mark Casson, in his book the Entrepreneur- An
Economic theory, presented a functional definition of the entrepreneur and
considered why the entrepreneurial function is so valuable. He emphasized that
the demand for entrepreneurship stems from the need to adjust to change, and
that the supply of entrepreneurship is limited firstly, by the scarcity of the
requisite personal qualities, and secondly, by the difficulty of identifying them
when they are available. He suggested that there are four main qualities which
are crucial for a successful entrepreneur of which one imagination is almost
entirely i9nnate. The other three qualities may be enhanced. The problems
encountered in screening for these qualities, and in enhancing the ones that are
deficient. Have a number of important implications for the development of a
successful entrepreneurial career.
Leibensteins X-efficiency Theory
This theory, originally developed for another purpose, has recently been applied
to analyse the role of the entrepreneur . Basically, X-efficiency is the degree of
inefficiency in the use of resources within the firm it measures the extent to
which the firm fails to realize its productive potential. For a given set of
inputs, productive potentials is identified with the point on Neo classical
production frontiers. X-efficiency arises either because the firms resources
are used in the wrong way or because they are wasted, that is, not used at all.
Leibenstein identifies two main roles for the entrepreneur. The first role is input
completion,which involves making available inputs that improve the efficiency
of existing production methods or facilitate the introduction of new ones. The
role of the entrepreneur is to improve the flow of information in the market. The
second role, gap filling, is closely asking to the arbitrage function emphasized
by Kirzner. Leibenstein provides a very vivid description of gap filling,
visualizing the economy as a netmade up of nodes and pathways
Dynamic Entrepreneurship Innovation Theory
A dynamic theory of entrepreneurship was first advocated by Schumpeter (1949)
who considered entrepreneurship as the catalyst that disrupts the stationary
circular flow of the economy and thereby initiates and sustains the process of
development. Embarking upon new combinations of the factors of production
which he succinctly terms innovation the entrepreneur activates the economy
to a new level of development. The concept of innovation and its corollary
development embraces five functions: (1) introduction of a new good, (2)
introduction of a new method of production, (3) opening of a new market, (4)
conquest of a new source of supply of raw materials and (5) carrying out of a
new organization of any i ndustry . Schumpeter represent synthesis of different
notions of entrepreneurship. His concept of innovation included the elements of
risk taking, superintendence and co-ordination. However, Schumpeter stressed
the fact the these attributes unaccompanied by the ability to innovate would not
be sufficient toaccount for entrepreneurship.
Harvard School Theory According to the Harvard School (Code 1949)
entrepreneurship comprises any purposeful activity that initiate, maintain or
develop a profit -oriented business in interaction with the internal situation of
the business or with the economic, political and social circumstances
surrounding the business. This approach emphasized two types of activities: the
organization or coordination activity, and the sensitivity to the environmental
characteristics that affect decision-making. Another exposition of the Harvard
tradition is that of Leibenstein (1968) who emphasized activities such as
searching and evaluating economic opportunities, mobilizing resources
necessary for the production process, connecting different markets and creating
or expanding the firm. Despite its stress on the human factor in the production
system, the Harvard tradition never explicitly challenged the equilibrium-
obsessed orthodox economic theory. This was challenged by the neo-Austrian
School who argued that disequilibria, rather than equilibrium, was the likely
scenario and as such, entrepreneurs operate under fairly uncertain
circumstances. The essence of entrepreneurship consists in the alertness of
market participants to profit opportunities. A typical entrepreneur according to
Kizner (1979) is the arbitrageur the person who discovers opportunity at low
prices and sells the same items at high prices because of inter-temporal and
interspatial demands
.Theory of High Achievement McClelland identified two characteristics of
entrepreneurship, namely, doing things in a new and better wary and decision-
making under uncertainty. He stressed the need for achievement or
achievement orientation as the most directly relevant factor for explaining
economic behaviour. This motive is defined as the tendency to strive for
successes in situations involving anevaluation of ones performance in relation
to some standard of excellence. People having highneed for achievement are
more likely to succeed as entrepreneurs. McClelland explains theentrepreneurs
interest in profits in terms of a need for achievement. People with
highachievement (N-Ach) are not influenced by money rewards as compared to
people with lowachievement. The latter type are prepared to work harder for
money or such other external orsuch other external incentives. On the contrary,
profit is merely a measure of success andcompetency for people with high
achievement need.
Theory of ChangeYoung conducted the Thematic Appreciation Test (TAT) on a
group o entrepreneurs. The testrevealed the tendency to describe the situation as
a problem to be solved, and awareness ofpragmatic effort required, confidence
in their own ability to solve the problem and a tendency totake the viewpoint of
each individual in turn and analysis the situation as he might see it
beforesuggesting an outcome.Youngs theory is a theory of change based on
societys incorporation of reacti ve subgroups. Agroup becomes reactive when
the following three conditions coincide: (i) When a group experiences low
status recognition; (ii) When denied of access to important social networks; and
(iii) When the group has better institutional resources than other groups in the
society at the same level.
Theory of ProfitKnight identifies the entrepreneur as a recipient of pure profit.
Pure profit, according to him, withregard to the entrepreneur, is bearing the
costs of uncertainty. He identifies uncertaint y with asituation where the
probabilities of alternative outcomes cannot be determined either by a
priorireasoning or by statistical inference. A priori reasoning is simply
irrelevant to economic situationinvolving a unique event.Knight argues that
business uncertainty can be reduced through consolidation. Consolidation isto
uncertainty what insurance is to risk; it is a method of reducing total
uncertainty by poolingindividual instances. The elasticity of the supply of self -
confidence is the single most importantdeterminant of the level of profit and the
number of entrepreneurs.
3. Theory of Adjustment of PriceFor Kirzner, the adjustment of price is the
main role of the entrepreneur. If the wrong priceprevails in the market; then an
opportunity for profit is created somewhere in the market if afrustrated buyer or
seller is willing, respectively, to pay a higher price or accept a lower one.Then,
again if different prices prevail in the same market, there is scope for profitable
arbitragebetween the two segments of the market.According to Kirzner,
alertness to disequilibria is the distinguishing characterization of
anentrepreneur. Alertness enables some individuals to intervene in the market
by changing theprice while other individuals simply respond by changing their
buying and selling plans in lieu ofthe new price.Kirzner further maintains that
the primary role of economic theory is to explain behaviour interms of
purposeful human action. And to consider to what extent purposeful human
actions caninteract to produce unexpected outcomes. To pursue the analysis of
entrepreneurship furtherwould be to go beyond the limits of the agenda of this
piece. Anyone who believes that theentrepreneurs is predictable has an
incentive to himself intervene in the market process, and sobecome an
entrepreneur.To Kirzner, this provides a satisfactory basis for asserting the
inherent unpredictability of theentrepreneur. It suggests that no predictor can be
anything but an entrepreneur, and so makes apredictive theory of
entrepreneurship impossible.
Theory of Market Equilibrium Hayeks main contribution to entrepreneurial
theory is to point out that the absence ofentrepreneurs in Neo-classical
economics is intimately associated with the assumption of marketequilibrium.
According to Hayek, the equilibrium postulate is equivalent to a postulate of
full information; not full information in the sense of a complete information
theory about every conceivable thing, but full information in the sense that no
further information is needed in or derto modify anyones decisions. For him,
the empirical content of economics related to the process of adjustment towards
anequilibrium. This process involves the acquisition and communication of
knowledge. Hevisualizes a world in which there is continuous process of
discovery. Market help people tocommunicate their discoveries to others and
learn of discoveries, thereby moving towards a saleof equilibrium.
Theory of Personal Resourcefulness
The root of entrepreneurial process can be traced to the initiative taken by some
individuals to gobeyond the existing way of life. The emphasis is on initiative
rather than reaction, althoughevents in the environment may have provided the
trigger for the person to express initiative. Thisaspect seems to have been
subsumed within innovation which has been studied more as thechange or
newness associated with the term rather proactive ness. This tendency to
takeinitiative has been approached from different directions at various stages in
the development oftheory in entrepreneurship. For instance, By grave and Hofer
(1991) talk of the importance ofhuman volition, Carland et al. (1984) define an
entrepreneur as one who establishes anorganization, or Schumpeter (1949)
talks of the agent who consciously disturbs the stationaryprocess to take it in a
new direction. They all reflect on the primacy of individual initiative.Studies of
entrepreneurial traits related to this aspect of behaviour, such as internal focus
ofcontrol (Brochaus. 1982), capability to take personal risks (Gasse. 1985) and
positive approachto work and problems, without excessive fear of failure,
seeming from strong belief in favourablefuture (Kuratko & Hodgetts, 1989)
all lend to a strong sense of personal resourcefulness(Kanungo & Misra, 1992)
through which entrepreneurs take up and deal with non-routine tasksand
situations. Hence, personal resourcefulness in the context of this paper is the
belief in onesown capability for initiating actions directed towards creation and
growth of enterprises. Such
4. initiating process requires cognitively mediated self regulations of internal
feelings andemotions, thought and actions as suggested by Kanungo and Misra
(1992).
Theory of Cultural ValesThe key elements in Thomas Cochrans theory are
cultural values, role expectations and socialsanctions. In his theory on the
process of economic development, entrepreneurs are not seen asbeing deviant or
super normal individuals but rather as representing societys modal
personality.This modal personality is modal by prevailing child-rearing
practices and schooling common to agiven culture. The performance of a
businessman, according to him, will generally the influencedby three factors:
(1) his own attitude towards his occupation; (2) the role expectations held by
thesanctioning groups; and (3) the operational requirements of the job. The
determinants for the firsttwo factors are the societys values. Changes over time
in such variables as population,technology, and institutional drift will impinge
on the role structure by creating new operationalneeds.Development in any walk
of life has always depended, to some degree, on individual qualities
ofentrepreneurship. The success of planned efforts made by some countries in
developing localentrepreneurs demolished the contention that an entrepreneur is
a rare character; thatentrepreneurship is not restricted to those who are gifted
with certain qualities at birth. It can alsobe developed. It sia precisely this
conviction that has led to careful studies on entrepreneurshipfrom economical
psychological and socio-logical perspectives, as well as steps to identify
anddevelop entrepreneurship. As observed, every theorist has looked at the
entrepreneur andentrepreneurship on the basis of his perception, and therefore,
can, at best, provide only a limitedview of entrepreneurial phenomenon. No
view is right or wrong, or more or less; in fact, thevarious factors which cause
the emergence of entrepreneurship are integral and not additive.They are
interlocking, mutually dependent and usually reinforcing.Factors Influencing
EntrepreneurshipPeter Heydemann, the Science Counsellor in the U.S Embassy
here seems much impressed withthe role the small business play in the process
of innovation in the U.S. economy. He explainedhow incubators ar e used
successfully in the United States to encourage small entrepreneurs.The problem
is how best to
CLASSIFICATION OF ENTREPRENEURS
I. According to the Type of Business Entrepreneurs are found in various
types of business coronations of varying size. We may broadly classify them as
follows:
Business Entrepreneur: Business entrepreneurs are individuals who conceive
an idea for a new product or service and-then creates a business to materialize
their idea into reality. They tap both production and marketing resources in
their search to develop a new business opportunity. They may set up a .big
establishment or a small business unit. They are called small business
entrepreneurs when found in small business units such as printing press, textile
processing house, advertising agency; readymade garments, or confectionery. In
a majority of cases, entrepreneurs are found in small trading and manufacturing
business and entrepreneurship flourishes when the size of the business is small.
Trading Entrepreneur: Trading entrepreneur is one who undertakes
trading activities and is not concerned with the manufacturing work. He
identifies potential markets, stimulates demand for his product line and
creates a desire and interest among buyers to go in for his product. He is
engaged in both domestic and overseas trade. Britain, due to geographical
limitations, has developed trade through trading entrepreneurs. These
entrepreneurs demonstrate their ability in pushing many ideas ahead to
promote their business.
Industrial Entrepreneur: Industrial entrepreneur is essentially a
manufacturer, who identifies the potential needs of customers and tailors a
product or service to meet the marketing needs. He is a product- oriented man
who starts in an industrial unit because of the possibility of making some new
product. The entrepreneur has the ability to convert economic resources and
technology into a considerably profitable venture. He is found in industrial units
as the electronic industry, textile units, machine tools or videocassette tape
factory and the like.

Corporate Entrepreneur:
Corporate entrepreneur is a person .who demonstrates his innovative skill in
organizing and managing corporate undertaking. A corporate undertaking is a
form of business organization, which is registered under some statute or Act,
which gives it a separate legal entity. A trust registered under the Trust Act, or
companies registered under the Companies Act are example of corporate
undertakings. A corporate entrepreneur is thus an individual who plans,
develops and manages a corporate body. Agricultural Entrepreneur:
Agricultural entrepreneurs are those entrepreneurs who undertake agricultural
activities as raising and marketing of crops, fertilisers and other inputs of
agriculture. They are motivated to raise agriculture through mechanization,
irrigation and application of technologies for dry land agriculture products.
They cover a broad spectrum of the agricultural sector and include its allied
occupations.
II. According to the Technology use The application of new technology in various
succors of the national economy is essential for the future growth of business.
We may broadly classify these. entrepreneurs on the basis of the use of
technology as follows:
Technical Entrepreneur: A technical entrepreneur is essentially compared to
a craftsman. He develops improved quality of goods because of his
craftsmanship. He concentrates more on production than marketing. On not
much sales generation by and does not do various sales promotional techniques.
He demonstrates his innovative capabilities in matter of production of goods
and rendering of services. The greatest strength, which the technical
entrepreneur has, is his skill in production techniques.
Non-technical Entrepreneur: Non-technical entrepreneurs are those who are
not concerned with the technical aspects of the product in which they deal. They
are concerned only with developing alternative marketing and distribution
strategies to promote their business. Professional Entrepreneur: Professional
entrepreneur is a person who is interested in establishing a business, but does
not have interest in managing or operating it once it is established. A
professional
entrepreneur sells out the running business and starts another venture with the
sales proceeds. Such an entrepreneur is dynamic and he conceives new ideas to
develop alternative projects.
III. According to the Entrepreneur and Motivation Motivation is the force
that influences the efforts of the entrepreneur to achieve his objectives. An
entrepreneur is motivated to achieve or prove his excellence in job
performance. He is also motivated to influence others by demonstrating his
business acumen.
Pure Entrepreneur- A pure entrepreneur is an individual who is motivated by
psychological and economic rewards. He undertakes an entrepreneurial activity
for his personal satisfaction in work, ego or status.
Induced Entrepreneur- Induced entrepreneur is one who is induced to take up
an entrepreneurial task due to the policy measures of the government that
provides assistance, Incentives, concessions and necessary overhead, facilities
to start a venture. Most of the induced entrepreneurs enter business due to
financial, technical and several other facilities provided to them by the state
agencies to promote entrepreneurship. A person with a sound project is
provided package assistance to his project. Today, import restriction and
allocation to production quotas to mall units have induced many people to start
a small-scale industry. Motivated Entrepreneur New entrepreneurs are
motivated by the desire for self-fulfillment. They come into being because of the
possibility of making and marketing some new product for the use of
consumers. If the product is developed to a saleable stage, the entrepreneur is
further motivated by reward in terms of profit.
Spontaneous Entrepreneur- These entrepreneurs start their business their by
Entrepreneur. They are persons with initiative, boldness and confidence in
their_- ability, which activate, them, underage entrepreneurial activity. Such
entrepreneurs have a strong conviction and confidence in their inborn ability.
IV. According to the Growth and Entrepreneurs The development of a new
venture has a greater chance of success. The entrepreneurs a new and open field
of business. The customers approval to the new product gives them
psychological satisfaction and enormous profit. The industrial units are
identified as units of high growth, medium growth and low growth industries
and as such we have Growth Entrepreneur and Super-Growth Entrepreneur.
Growth Entrepreneur: Growth entrepreneurs are those who necessarily take
up a high growth industry, which has substantial growth prospects.
Super-Growth Entrepreneur: Super-growth entrepreneurs are those who have
shown enormous growth of performance in their venture. The growth
performance is identified by the liquidity of funds, profitability and gearing.
V. According to the Entrepreneur and Stages of Development
Entrepreneurs may also be classified as the first generation entrepreneur,
modern entrepreneur and classical entrepreneur depending upon the stage of
development. They are explained below:
First-Generation Entrepreneur: A first-generation entrepreneur is one who
starts an. industrial unit by innovative skill. He is essentially an innovator,
combining different technologies to produce a marketable product or service. .
Modern Entrepreneur: A modern entrepreneur is one who undertakes those
ventures, which go well along with the changing demand in the market. They
undertake those ventures, which suit the current marketing needs.
Classical Entrepreneur: A classical entrepreneur is one who is concerned with
the customers and marketing needs through the development of a self-
supporting venture. He is a stereotype entrepreneur whose aim is to maximise
his economic returns at a level consistent with the survival of the firm with or
without an element of growth.
VI. Others Innovating entrepreneurship is characterized by aggressive
assemblage in information and analysis of results, deriving from a novel
combination of factors. Men / women in this group
are generally aggressive in experimentation who exhibit cleverness in putting
attractive possibilities into practice. One need not invent but convert even old
established products or services by changing their utility, their value, and their
economic characteristics into something new, attractive and utilitarian. Therein
lies the key to their phenomenal success. Such an entrepreneur is one who sees
the opportunity for introducing a new technique of production process or a new
commodity or a new market or a new service or even the reorganization of an
existing enterprise.

Creativity and innovation.
IV. TECHNIQUES FOR DEVELOPMENT OF CREATIVITY AND INNOVATION Value of entrepreneur is
recognized by the concepts such as creativity and innovation. Schumpeter believes that
entrepreneur can only be a person who is different from others. Therefore, entrepreneur is an
individual who is extremely talented, capable to introduce novelty, prepare creative ideas,
initiate and use changes. It was believed earlier that entrepreneurs were born, so an individual
who had a good intuition could conduct such work. However, the situation is slightly different
today. Namely, today's entrepreneurs grow into professionals who rely more on their knowledge,
gained by education, and intellectual abilities they have. There are three types of skills that
potential entrepreneurs must master before they enter the business project: technical, human
and conceptual [8]. It is
believed that by mastering these skills, entrepreneurship can be learned like any other
profession. Therefore, entrepreneurs are not born, but created. Some entrepreneurs are less,
some more talented to carry out entrepreneurial activities, and therefore the techniques for
stimulating creativity and innovation have been formulated. According to [12], there are six
methods of stimulating creativity and innovation: (1) Brainstorming - means the emergence of
new idea, suddenly, all at once. Group members suggest as many ideas as possible, on the basis
of which the potential solution to the problem is defined.
(2) Brainwriting - means presenting the problem to the group, where individuals write down
ideas for solving the problem and then change their sheets and discuss ideas.
(3) Method of Creative Orientation - is a method which includes: bionics as a skill that is based on
the application of knowledge on living systems for solving social problems; searching for
solutions according to heuristic principles, starting from the existing product where possible
changes in such product are examined; searching of examination area starting from observation
of the current situation from another angle.
(4) Method of Creative Confrontation - is a method which includes: classic synectics, synectics
conference, visual synectics, analysis by stimulating words, BBB method, Force-Fit game, Tilmag
method, method of integration of adjacent fields, semantic intuition, forced connection, catalog
technique.
(5) Method of Systematic Structuring - is a method which includes: morphological box, specifying
the list of attributes, showing problem fields, sequential morphology, decision tree, process
analysis. These methods try to encourage intellectual and rational thinking of people. (6) Method
of Systematic Specification of Problem - is a method which includes: progressive abstraction,
epistemological analysis, K-J method, N-M method, hypothesis matrix, relevance tree.
According to [7], techniques for stimulating creative ideas and innovations are the following: (1)
Brainstorming - develops ideas about the problem within a limited period of time, along with
spontaneous contributions of participants;
(2) Reverse Brainstorming - is based on finding shortcomings of an idea;
Creative problem solving Creativity training usually includes some training in techniques which
promote divergent thinking .
The Creative Problem Solving (CPS) program, sometimes called the Parnes-Osborn model was
developed by Parnes and colleagues. It consists of six stages of creative problem solving: mess
finding, problem finding; idea finding; solution finding and action planning.
Most researchers agree that ongoing creativity requires more than individual idea generation.
The idea selection process, idea evaluation and implementation are critical to success
commonly used in studies of innovation in firms. Other variations include idea combination,
idea aggregation, idea selection and transformation of the everyday. A review of creative
problem solving training in the workplace indicates that training in creative problem solving
enhances organizational performance
rough
1. UNDERSTANDING ENTREPRENEURSHIP CHAPTER 1 ENTREPRENEURSHIP
2. Chapter Objectives To understand the evolution of the term entrepreneur To study the
reasons for the current growth in entrepreneurship To list various reasons driving a person to
starting a business To explore the characteristics and skills of successful entrepreneurs To
classify different types of entrepreneurs To look at the reasons for entrepreneurial failure
3. The Entrepreneur entreprende , which means to undertake Webster dictionary one who
organizes, manages and assumes the risks of a business or enterprise Richard Cantillion an
entrepreneur is someone who takes the risk of running an enterprise by paying a certain price
for securing and using resources to make a product and reselling the product for an uncertain
price.
4. Joseph Schumpeter - an innovator playing the role of a dynamic businessman adding
material growth to economic development Timmons - Entrepreneurship is the process of
creating or seizing an opportunity and pursuing it regardless of the resources currently
controlled
5. Reasons for Growth of Entrepreneurship Industry Structure New technologies Deregulation
and privatization Formation of new business communities Increasing demand for variety
Government incentives and subsidies Increasing flow of information
6. Easier access to resources Entrepreneurial education Return on innovation Entrepreneur as
a Hero Self-employment is highly valued Rising dissatisfaction at job Acceptance of ex-
entrepreneurs in the job market
7. Gurubhai and Dhirubhai Both start their career from the gulf Both come to Mumbai to deal in
synthetic yarn Gurus battle against an anglicized scion of an established business family
seems to mirror Ambanis spat with Nusli Wadia. Gurus success in getting people to invest in
his IPO is similar to what happened in Ambanis case. Mithun Chakraborty plays a newspaper
owner in the film and his character resembles Ramnath Goenka. The virulent attacks of the
newspaper on Guru are similar to what is alleged of Indian Express and Reliance in real life.
8. Impact of Entrepreneurial Firms Job Creation Economic growth New Technology Serving
small markets
9. Why Start a Business? Control The idea Flexibility Money
10. Pros & Cons You are the boss All profits are yours There will be great variety in roles and
tasks Increases self confidence Work can be very satisfying Success will give you immense
satisfaction You are alone All decisions are yours All losses are yours Work may not be
satisfying You will need to put in long hours Lack of success will effect self esteem Exiting the
business is difficult Pressures will affect social and family life
11. Entrepreneurial Characteristics Timmons: commitment and determination; leadership;
opportunity obsession; tolerance of risk, ambiguity and uncertainty; creativity, self-reliance and
ability to adapt; and motivation to excel.
12. Bianchi being an offspring of self-employed parents; being fired from more than one job;
being an immigrant or a child of immigrants; previous employment in a firm with more than 100
people; being the oldest child in the family; and being a college graduate.
13. Entrepreneurial Skills Creativity and Opportunity Evaluation Real-time Strategy and
Decision Making Comfort with Change and Chaos Teamwork Evangelism, Selling, Negotiation,
and Motivation through Influence and Persuasion Oral and Written Communication Basics of
Start-Up Finance, Accounting and Law
14. Entrepreneurial Attitudes Comfortable with lifestyle changes Willingness to break / bend /
stretch laws Patience to start small Prepared to make enemies Comfort with confrontations
Dealing with failure Willingness to learn
15. Entrepreneurial Motivation Entrepreneurial Motivation Personal Characteristics Personal
Goals IDEA Environment Entrepreneurial Activity Expectations Outcomes Match
16. Types of Entrepreneurs Based on Timing of Venture Creation: Early starters Experienced
Mature Based on Socio-cultural Variables: 1st generation entrepreneurs From Business families
Minority entrepreneurs Women Entrepreneurs
17. Based on Entrepreneurial Activity: Novice Serial Portfolio
18. Reasons for Entrepreneurial Failure Lack of experienced management Few trained or
experienced human resource Poor financial management Rapid growth Lack of business
linkages Weak marketing efforts Lack of information Incorrect pricing Improper inventory control
Short term outlook
19. Thank you
20. Chapter Objectives To understand the importance of the business idea To explain the
significance of a new business idea To formulate a pre-selection process to precede the
search for a business idea To list the possible source of business ideas To describe the process
of researching a business idea To develop a comprehensive framework for evaluating business
ideas
21. Warren Buffer says, Todays successful companies live and die according to the quality of
their ideas. Peter Drucker, Innovation is the specific instrument of entrepreneurs, the means
by which they exploit change as an opportunity for a different business
22. First Mover Advantages Technological leadership: can also lead to Cost advantages
Economies of scale Obtain and secure scarce resources before crowding Impose switching
costs on buyers Disadvantages Reveal underlying business concept Others can try different
resource combinations Investments in resolving problems: others can benefit from learnings
Inertia makes it difficult to abandon strategy no longer effective
23. Pre-selection Uncover your personal traits Knowledge and Experience Goals and
aspirations Technical knowledge Domain knowledge Contacts
24. Sources of Business Ideas Past work experience Hobbies and interests Strengths and
abilities Friends and family Distribution channels Travel Books and magazines Current trends
Research organizations The web
25. Brainstorming Some of the important rules are as follows: Focus on quantity. Postpone
criticism. Build on others ideas. Encourage crazy ideas. Work with a deadline.
26. Preliminary Research Cost structure Market structure Technology HR issues Government
regulations
27. Mind Maps
28. Five Questions Framework Q1. Which is the market segment being targeted? Q2. What is
the business model? Q3. How big is your market? Q4. How can you protect your business? Q5.
What are you getting out of it?
29. Porters Five Forces
30. SWOT Analysis STRENGTH WEAKNESS OPPORTUNITY THREAT
31. Thank You
32. INTELLECTUAL PROPERTY CHAPTER 3 ENTREPRENEURSHIP
33. Chapter Objectives To understand the importance of intellectual property in modern
business To explain the laws protecting trademarks, patents, designs, copyrights and other
intellectual property To describe the procedure for registration of trademarks, patents, etc. To
develop a strategy for building and protecting intellectual property To comprehend the
significance of trade secrets and other confidential information
34. IP Laws in India IP laws in India cover the following: Trademarks Copyright Patents
Geographical indication of goods Designs Others including Semiconductor layout designs,
plants and farmer rights and biological diversity.
35. Interesting Trademarks numbers can be trademarks like in the case of 501 tea and 555
cigarettes symbols like those of Mercedes Benz or apple computers letters like in 3M, IBM, NIIT
Orange cellphone service has successfully managed to include the colour orange as its
trademark. sound like MGMs roar of the lion can also be a trademark Sumitomo tyres has
registered a rose like smell as its trademark
36. Assignment of Trademarks Trademark search Application for registration Receipt and
examination Acceptance, advertisement and opposition Cancellation
37. Particulars of Application The class of goods for which the mark is sought. Classes can be
textiles, food and confectionery, machine tools, etc. Definition of goods which is sought to be
registered Details of the applicant including name, age, occupation, address and nationality
Whether the trademark is in use or is proposed to be used. If in use, applicant must specify by
whom and for what period.
38. Infringement of Trademarks The allegedly infringing mark must be either identical or
deceptively similar to the registered trademark; The goods / services in relation to which the
allegedly infringing mark is used must be specifically covered by the registration of the
registered trademark; The use of the allegedly infringing mark must be in the course of trade;
and The use must be in such a manner as to render the use likely to be taken as being used as
a trademark.
39. Copyright Copyright confers protection to: Literary works Dramatic works Musical work
Artistic works Cinematographic films and sound recordings
40. Dimensions of Copyrights Idea Expression Originality Fixation Fair use
41. Creators can prohibit others to: reproduce the work in any form, such as print, sound .video,
etc record the work in a compact discs, cassettes, etc broadcast it in any form translate it to
other languages use the work for a public performance, like a stage drama or musical
performance
42. Patents The following are criteria for patentability: Novelty Utility Inventive step
43. The following are not patentable: Inventions which are frivolous or contrary to established
natural laws Inventions, the primary use of which, are contrary to morality or can cause harm to
humans or the environment The mere discovery of a scientific principle without manifesting it in
a product Discovery of a new use of an existing substance A new method of agriculture A
business method A manufacturing process
44. Patent Filing process Filing application Publication of the application First examination
report Grant Post-grant opposition
45. Assigning Use of Patent A patent holder may assign a patent to a 3 rd party. Their
agreement will have the following elements: The term of the agreement The territorial exclusivity
of the rights Financial terms including payments of fixed and variable amounts to the patent
holder Specification of production capacities to be set up and marketing budget to be committed
Commitments from the patent holder regarding performance of the invention Any other
provisions which may be deemed necessary
46. Geographical Indication of Goods The GI should pertain to a defined territory A given quality
or reputation should be attributable to goods originating from that region Registration of a GI
confers the right to use the GI in relation to goods for which GI is registered Also, right to obtain
relief in case of infringement Rights under GI Act, cannot be assigned, transferred or
transmitted.
47. Designs Criteria for registration: The design has to be original Designs are registered only
when they can be applied to an article An article, in turn, is defined as any article of
manufacture and any substance, artificial or natural, and includes any part of an article capable
of being made and sold separately. The elements of design must be capable of existence
separate from the article on which they have been applied. The design must be of a distinctive
nature and must appeal to people.
48. The following designs will not qualify for protection under the Design Act: Methods or
principles of construction Features dictated by function A mechanical device A trademark
Designs which can be construed as immoral
49. Other IP Laws The Protection of Plant and Varieties and Farmer Rights Act, 2001 The
Biological Diversity Act, 2002 Semiconductor Integrated Circuits Layout Act, 2000
50. Non Disclosure Agreement NDA should have the following elements: An NDA should define
what information is confidential. Agreements should have clauses on restrictions on disclosure,
copy and use of information Restrictions on use of information when in employment and upon
termination of employment. Requirements relating to return of confidential documents and
paperwork upon termination of association Specification of penal clauses like withholding
salary, imposing fines, etc Addition of non-compete clause in an NDA prevents employees and
vendors from setting up competing businesses or helping competitors. Care should be also
taken to ensure that employees do not violate the rights of third parties.
51. Protecting Trade Secrets Employees should be made to realize their responsibility to protect
confidential material. Employees should be educated to identify confidential material Data and
information which is confidential should be marked as such. Access to sensitive material or
sensitive areas of the workplace should be restricted on a need to know basis Interactions and
disclosure to third parties should be channeled through specified responsible employees When
leaving an organization, an employee should be reminded of his obligations with respect to
confidential information through an exit interview.
52. FAMILY BUSINESS CHAPTER 4 ENTREPRENEURSHIP
53. Chapter Objectives Define a family business Discuss the history of family business in India
Discuss the roles and responsibilities of the founder List the characteristics of able successors
Describe the roles, rights and responsibilities of family members in a family business Explain
the role of non-family managers Describe the issues in succession in a family business List the
best practices in managing family business, from across the world. Entrepreneurship
54. What is a Family Business High percentage of share capital owned by a family either jointly
or individually. Family members employed in the highest decision making posts Expression of
intention to maintain family involvement in the future. A number of generations of the same
family involved in management or ownership Direct descendants of the founders have
management or ownership control
55. Advantages of a Family Biz There is a long term orientation as the continuity of the firm is of
great concern to the older generations. The family culture is a source of great pride for family
and non-family employees alike. The family firm functions in a less bureaucratic manner and it
is not impersonal in dealing with employees and customers. Family firms have shown greater
willingness to weather the bad times by ploughing back profits. It is structured to impart training
to younger members of the family.
56. Disadvantages They may have a confusing structure where the role of many family
members is not clearly defined. The style of functioning may be autocratic or patriarchal. Many
of the younger generation may not be worthy of their position and role in the organization There
can be very strenuous succession battles Sometimes family members can selfishly drain the
finances from the company.
57. Roles of the Founder Starting the business Building the organization Providing guidance
and direction to employees and family members Constructively involving family members in
business Planning for succession
58. The Next Generation They know the business well. Ideally, they like or even love the nature
of the business They know themselves and their strengths and weaknesses They have had the
necessary outside experience and education They want to lead and serve They are guided
responsibly by the previous generation, advisors and the board They have good interpersonal
relationships particularly with other family members in business
59. The Next Generation They can count on competent non-family managers to complement
their own skills They have controlling ownership either directly or through allies They have
earned the respect of employees, suppliers, customers and other family members Their skills
and abilities fit the strategic needs of the company They respect the past and focus their
energies and resources on the future of the business and the family
60. Stepping Up A new entrant should have a track record that gives legitimacy to his ideas and
his claims. It pays to consult the older generation while making the plan. Suggest a step by step
approach. If the plan is still not acceptable, accept that there may be something wrong with the
plan.
61. Retaining Non-family Managers Discuss career paths in the company and clearly state if top
positions are not open for them. Offer compensation and benefits that are at par with the others
in the industry. Involve non-family managers in top level decision making by getting them to be
part of decision making teams with other owner-managers. Set targets and use performance
measures to build motivation. Achievement of targets provides significant motivation.
62. Retaining Non-family Managers Emphasise the contribution of non-family managers in
company meetings. Treat family members like employees at work. It helps build a healthy
atmosphere. Involve non-family managers in succession planning. Some senior non-family
managers can be used as bridge heads to smoothen the succession from one generation to
another. Periodically assess the motivation level of non-family managers and the working
relationship between family members and non-family managers.
63. Succession Planning Choose a successor Grooming the successor Planning Early entry
Late entry
64. Advantages of Early Entry The successor becomes familiar with the nature of the business
Gets a chance to develop relationships with other employees Gets to know other business
associates Skills specifically required for the business can be acquired and developed Good
performance during employment will lead to credibility with employees and other stakeholders
65. Advantages of Late Entry Success outside the firm establishes credibility Best practices
from other firms are brought into the family business Business perspective of the successor is
broad The successors competence is judged with greater objectivity.
66. Best Practices in Family Biz Communication Independence Shared Vision Documentation
Conflict resolution
67. DOING BUSINESS IN INDIA CHAPTER 5 ENTREPRENEURSHIP
68. Problems Bureaucracy Corruption Labour Local Sentiments Gray Market Social Capital
69. Chapter Objectives To understand the ground realities of doing business in India To identify
the socio-cultural issues facing an Indian entrepreneur To list the various forms of business
ownership available in India To understand some of the major laws and regulations governing
conduct of business in India
70. Bureaucracy Characteristics of ideal bureaucracy: Official business is conducted on a
continuous basis Official business is conducted according to written rules Roles and
responsibilities are defined within a hierarchy, with rights of supervision and appeal Official and
private business and income is strictly separate
71. Factors Working Against Corruption There is greater transparency in procedures to be seen
across government departments. The right to information act (RTI) has significantly changed the
situation Lately the media too has played an active and visible role
72. Measures Against Gray Markets Manufacturers may drastically reduced prices to narrow the
gap in prices in local and overseas markets. Warranties may not be extended to products not
purchased through the regular channels. Some high tech solutions have also been devised like
the use of DVD regional codes to protect movies and other digital content.
73. Social Capital Negative consequences of Pehchaan: Exclusion of meritorious outsiders
Excessive claims on group members Restrictions on individual freedom Norms aimed at
downward leveling
74. Types of Ownership Sole Proprietorship Partnership Company Limited Liability Partnership
Small Company One Person Company
75. Taxes, etc Income tax Sales tax Excise Service tax Profession tax
76. Features of VAT Input tax credit even on capital goods Credit is carried forward for 2 yrs
and then it is refunded in case it cannot be offset Uniform rates throughout the country Self
assessment of possible tax liability is allowed Audit In case of excess payment, refund is made
within 60/90 days Interest can be claimed on delayed payments
77. Paying VAT Sell after stock transfer Be careful of bogus stock transfer Collect Forms C D F
& H on time Advise your dealer to be registered Use input tax credit on capital goods
Encourage dealers to get registered Ensure that purchase and sales registers and stock- books
are maintained Claim interest for delayed payment
78. Central Excise Find out if the product is excisable Find out its classification Find out its rate
of duty Pay the tax File returns
79. Paying Excise Bill directly to the buyer Advice all distributors and dealers of your products to
be registered Avail of SSI concession if your unit is eligible Know your product properly. There
may be an opportunity for reclassifying your product in a lower rate slab. Avail of all
concessions under CENVAT Let the customer pay separately for add-ons like transport and
warehousing expenses so it does not get included in calculating the total excise liability
80. Other Regulations Company law Labour law Import Export Pollution control
81. ENTREPRENEURIAL SUPPORT CHAPTER 6 ENTREPRENEURSHIP Entrepreneurship
82. Chapter Objectives Discuss various sources of support for the entrepreneur List policies
from all over, that help entrepreneurs Discuss how to evaluate these policies Describe the
benefits of a business incubator Explain the intricacies of incubator management Define a
business cluster Discuss identification and development of clusters Entrepreneurship
83. Entrepreneurial Support Support in the form of progressive policies which help
entrepreneurial ventures. Incubators which are set up to provide support to new firms in the
early stages. Business clusters which are made up of firms in the same industry in close
proximity to one another.
84. Aims of Policies Entrepreneurship education: Entrepreneurial skills: Access to debt:
Stimulating Innovation: Access to equity: Simplifying administrative burden: Access to markets:
Encourage weaker sections:
85. Evaluating Policies Take up of policy Opinion of beneficiaries Comparing performance
86. Incubators Benefits from an incubator Access to shared flexible spaces Shared offices
services Providing a business consulting network Networking Facilitating access to capital
87. Incubator Management There should be an incubator manager and a team of professionals
The incubator should set clear guidelines for eligibility. An incubator should have clear cut
guidelines for an admission process. A contract should be signed by the incubator and the
entrepreneur laying down all the terms and conditions. Clear guidelines for the entrepreneurs
exit should also be laid out The long term financial viability of the incubator will depend on its
business model.
88. Revenue Streams for Incubators A fixed rental to cover the cost of basic infrastructure A
usage based charge for services like conference room, copier, etc. A success fee which can be
in the form of an equity stake in the new venture.
89. Exiting an Incubator The entrepreneur should exit: After a fixed period When the start up
receives substantial funding When it achieves a certain level of profitability In case of
irresolvable disputes
90. Some of the successfully incubated companies from SINE, the incubator at IIT, Bombay
Herald Logic Pvt. Ltd. Voyager2 Infotech Myzus Technologies eInfinitus Powai Labs Pvt. Ltd.
Seclore Technology Pvt. Ltd Eisodus Networks Pvt. Ltd. Quantum Phynance Pvt. Ltd.
91. Business Clusters A geographical concentration of industries that gain performance
advantages through co-location Well developed and intense links with suppliers Formal and
informal business networks Shared supporting infrastructure like buildings and road connections
A certain level of cooperation in spite of a high degree of rivalry and competition
92. International Clusters Auto industry in Detroit Paris for high fashion Antwerp for diamonds
Hollywood for movie production 5th Avenue in New York for Advertising Hsinchu in Taiwan for
high technology Entrepreneurship
93. Indian Clusters IT firms in Bangalore Diamond polishing in Surat Textiles in Tirupur Seafood
processing in Kochi Call Centres in Gurgaon / NCR Jute mills in Kolkata
94. Benefits of Clusters Michael Porter: productivity of the companies in the cluster increases
there is increased scope for innovation in the sector new businesses are encouraged to come
up
95. Types of Clusters A vertically-integrated cluster is made up of businesses linked through
intense buyer-seller relationships. A horizontally-integrated cluster is made up of businesses
which share a common market for their end products, use a common technological base or
common skilled workforce, or require similar raw materials. Entrepreneurship
96. Cluster Development Supplier buyer relationships can be forged by collecting and
distributing information about potential industry linkages. Common infrastructure can be
supported by external agencies. Especially in the case of industries heavily dependant on
specialized skills, providing skills training and education is a good means of supporting a
cluster. Industries in a cluster can be aided by providing marketing channels.
97. BUYING A BUSINESS CHAPTER 7 ENTREPRENEURSHIP
98. Chapter Objectives To list the benefits of buying an existing business To list the
disadvantages of buying an existing business To discuss the possible sources of information
about a business for sale To describe a step by step process of buying a business To tabulate
the factors to be investigated before a purchase To understand various methods of valuing a
business To discuss the major mistakes made in buying a business To understand the concept
of franchising To list the benefits of being a franchisee To discuss the factors important in
evaluating a franchise opportunity To describe the elements of a franchise agreement
Entrepreneurship
99. Advantages of Buying a Business Buying an existing business will enable you to go around
a lot of problems likely to crop up in opening a business. The existing business would have
already got some licenses and government approvals which would be otherwise difficult to get.
Land is scarce and it is difficult to find an appropriate location. An existing business is likely to
come bundled with the land. The plant and machinery have already been bought and have been
installed and tested. Employees are experienced. A supplier base has already been
established. Entrepreneurship
100. Advantages of Buying a Business There is a readymade market. A distribution network has
been set up and money and effort has already been invested in establishing a rapport with
retailers and wholesalers. Goodwill and reputation would have been built up. Cash flow is going
to start immediately. Banks may be more willing to lend to a business with running operations,
an established customer base and a steady cash flow. It might be cheaper than setting up new
operations. The former owner may be persuaded to guide you in the early days. This free
advice may prove to be invaluable. Entrepreneurship
101. Disadvantages The industry as a whole is not doing well and the situation is not likely to
improve in the near future. The owner may not have been truthful about the business. The
equipment could be old and outdated. The location is bad or is likely to become bad. Employees
may be unproductive or incapable of meeting the standards required of them. Entrepreneurship
102. Disadvantages Any bad reputation that the business had acquired amongst suppliers,
distributors and other people in the industry is likely to pass on to you. The previous owner may
have got into some unfavourable long term contractual obligations The inventory lying in stores
could be obsolete or unfit for use. If the companys products have not been received well by the
market it will be harder to gain market share than it would have been for a new product.
Entrepreneurship
103. Buying a Business Preliminary information collection Site visit Scrutiny Additional
information collection Negotiation Transition
104. Getting Information The industry Accountants, lawyers Bankers Advertisements Others
105. Scrutiny Financial statements Other statutory documentation Valuation of capital
equipment Inventory Licenses and permits Contracts with customers and suppliers Debt and
accounts payable Accounts receivable Reputation of the firm
106. Valuation Value of assets Book value Replacement value Market value Return on
investment Payback period Discounted cash flow
107. Negotiations Elements other than cash: Combination of stock and cash Accounts
receivable Lease; with option to buy Non-compete clause
108. Common Mistakes While Buying Scrutunise claims Risk vs returns Valuation of
receivables Antagonising the seller
109. McDonalds Arguably the most successful franchise chain Operates 30,000 outlets in over
100 countries Became a success after Ray Croc bought it from the McDonald Brothers
110. Franchising
111. Advantages of a Franchise By taking a franchise, you get a proven system of operation.
The franchisor allows you the use of an established brand name. The franchisees can also use
professionally designed point of sale advertising materials, packaging material, posters and
print and TV ads. This brand recognition is driven by national and regional advertising
programmes. The franchisor will often train the franchisee and the franchisees employees
before letting a new franchisee start the business.
112. Advantages of a Franchise Ongoing product development and research is another
advantage of being with a franchise chain. Large companies can gain from economies of scale
but that would not be possible for individual entrepreneurs. The cost of starting up the franchise
operations and the ongoing operating costs are very well documented by the franchisor and the
details are shared with all prospective franchisees. A franchisor can add value by putting a
quality program in place. The franchisor often does market research to find out if the market is
big enough to support an outlet.
113. Choosing a Franchisor It is good to get into an industry that is growing and shows signs of
sustaining a rate of high growth over the next few years. It is also important to take into account,
the performance of the franchisors products in the market. It is better to choose a franchisor,
which has been in this business for a long time. It is disadvantageous to become one of the
initial franchisees in a chain. The reputation of the franchisor counts for a lot.
114. Choosing a Franchisor The franchisors relationship with other franchisees is also a very
important factor to consider. Take a close look at the profitability indicated in the figures shared
by the franchisor. Some of the assumptions made while arriving at those figures may need to be
changed. It might need a good amount of investigation to come up with accurate estimates of
the success rate of franchisees.
115. The Franchise Agreement The size and location of space needed The franchise fee
including down payment and continuing royalties Refundable deposits A franchisees allotted
territory The range of products and services which are offered by the franchisor
116. The Franchise Agreement Training and who pays for it Advertising and who pays for it Any
other assistance No-compete clauses Dispute resolution and legal recourse
117. ENTREPRENEURIAL FINANCE CHAPTER 8 ENTREPRENEURSHIP
118. Chapter Objectives To list the various sources of debt finance To understand the process
of securing debt finance To discuss the importance of collateral security To tabulate the lending
strategies of banks To discuss the characteristics of venture capital To understand the structure
of venture funds To list the various roles within a venture fund To understand how venture
capitalists get compensated for their efforts To describe a step by step screening process
followed by venture funds while making an investment To list the elements of a termsheet To
understand the current scenario of VC funding in India
119. Disadvantages of Equity Finance Dilution of shareholding Increased 3rd party governance
Increased external controls Increased commitment to stated strategy
120. Sources of Debt State Finance Corporations NBFC Banks
121. Securing Debt Drawing up the business plan. Identifying sources of debt finance.
Presenting the proposal to the bank. If the manager is considering your proposal favourably,
you will have to go for further talks Once the two parties have broadly agreed, details have to be
worked out. Entrepreneurship
122. Principles of Good Lending Purpose Safety Profitability Other considerations
123. Security Collateral Inside Outside Personal guarantee Maturity Covenants Menu pricing
124. Lending Strategies Financial statements Relationship lending Length of relationship
Breadth of relationship Degree of trust Credit scoring
125. Venture Capital Venture capital is characterized by: Financing of new and potentially high
growth companies Investments primarily in the form of equity participation Assistance in the
early days of the enterprise Adding value to the company through active participation, even
joining the management on occasions Willingness to take on higher risk Expectation of higher
rewards A long-term outlook regarding the investment Entrepreneurship
126. Roles in a Venture Fund General partner Investor Venture partner Entrepreneur-in-
residence Others
127. Screening by VCs Get rid of scamsters Major broad concerns Growth and industry
considerations Monetising value
128. Important Considerations The entrepreneurial team Personal or individual characteristics
Experience of the individual Ease of exit Via IPO Sale to PE, etc
129. The Termsheet Amount and terms of investment Dividend policy Composition of the board
of directors Reporting Liquidity (exit) plans Rights of sale Warranties Matters requiring venture
capitalist approval Entrepreneurship
130. Problems Facing VCs in India Large established firms with strong growth figures look like a
very attractive proposition. Investments in public listed firms are giving returns in excess of 30%,
at far lesser perceived risk Small firms in India are informationally opaque. Indian entrepreneurs
are perceived as lacking in marketing and management skills. Indian entrepreneurs are more
reluctant to give up controls than their western counterparts. VCs face an exit challenge as the
capital markets in India are still shallow Brand India is strong only in some manpower driven
services sectors like IT and ITES. Entrepreneurship
131. Sectors Favored by VCs IT and IT-enabled services Software Products Wireless and
telecom Banking and financial services Divestments in public sector units Media and
entertainment Biotechnology Pharma and diagnostics High technology Manufacturing Retail
132. MAKING A BUSINESS PLAN CHAPTER 9 ENTREPRENEURSHIP
133. Chapter Objectives To understand how a business plan is divided into sections To list the
uses of a business plan To lay out the steps involved in writing a business plan To list out data
required in drawing up a business plan To discuss about the various types of business plan To
understand the significance of an executive summary To understand the structure and
composition of various sections of a business plan To list the various appendices and exhibits
needed in a business plan
134. Uses of a Business Plan Equity funding Bank finance Alliances Recruitment Clarify the
business Others
135. Kinds of Business Plans Summary Plan Executive summary Full Business Plan
Operational Business Plan The oral presentation
136. Steps in Writing a Business Plan Define purpose Collect Information Put it down The rough
draft. Financial analysis Finishing Review
137. Data Required Company details Documents relating to formation Shareholding details
Permits and registrations Management Organization chart Details of key employees
Consultants and advisors Compensation and other employee agreements Industry and
Competitors Market statistics from secondary sources Reports on trends, etc Competitor data
Customer surveys
138. Data Required Operations Product specifications Contracts and purchase orders for raw
materials Competitive advantages Details of Intellectual Property (Patent, license, and
trademarks) Regulatory approvals Industry standards as per regulations Plant layout and
operations plan Research and development plans Marketing and Sales Marketing plan Advance
orders, if any Marketing materials Financial Information Data on fixed and variable costs to be
incurred Financial forecasts
139. Key Sections of a Business Plan Executive summary The company The management
team The industry and the market Operations The marketing plan Financial plan Risks and
contingencies Appendices
140. Executive Summary The executive summary is probably the most important section of the
business plan. It is basically the whole business plan condensed into a few pages The main
objective of the executive summary is to entice the reader to go through the entire plan.
141. The Company History Current Status Future
142. The Management Team Technical and professional qualifications Quality of work
experience Experience in the relevant sector Reputation in the business community Evidence of
moral integrity Financial capacity Networking with other vital people in the industry
143. The Industry and the market An industry is a collection of sellers A market is a collection of
buyers Concentrate on the relevant segments Competition
144. Operations Gantt chart outline setup Technology Raw material strategy Production
planning Quality HR policy
145. Marketing Target Segments Branding Product Packaging Pricing Distribution Promotion
146. Finance Funds sought Projected financial statements Costing details Break even and
payback analysis
147. Risks and Contingencies Identify major threats and risks Outline strategies for countering
them
148. Appendices Copy of documents pertaining to incorporation or formalisation of partnership.
CVs of the entrepreneur/s and of key employees Copies of various permits or permissions
granted. Copies of papers pertaining to sale or lease of land for the business Copies of
documentation of proprietary intellectual property Graphical representation of schedule
including milestones and dates Photographs of location Factory or plant layout Graphical
representation of production process
149. Appendices Findings of market survey conducted Photograph of product or prototype
Storyboards or mock-ups of advertisements Projected balance sheets Projected profit and loss
accounts Projected cash flow statements Sensitivity analysis of P&L a/c Break even analysis
Financial ratios
150. MANAGING OPERATIONS CHAPTER 10 ENTREPRENEURSHIP
151. Chapter Objectives To understand the importance or correct purchasing in a venture To list
the activities involved in purchasing To tabulate the elements of a purchase policy To discuss
the ways to evaluate suppliers To discuss the best practices in purchasing To list the kinds of
inventory carrying costs To classify different kinds of inventory To understand the importance of
cash management To understand the role of the cash manager To appreciate the challenges
posed by cash flows To understand the principles of receivables management To discuss
managing for disasters To understand the strategies followed by seasonal businesses
152. Purchase Unplanned purchasing can lead to: spending more money than you need to
buying goods that aren't of the proper quality choosing suppliers that don't offer the required
level of customer service Entrepreneurship
153. Role of the Purchase Manager gather orders from various departments make sure the
orders are complete, stay within specified spending parameters select appropriate vendors
order for the goods check condition upon receipt check to make sure the invoice is correct
ensure timely payment of the invoice by forwarding it to the accounting department
communicate effectively with the suppliers on various issues
154. Purchase Policy The purchase policy should address the following issues: Who is
authorized to purchase various goods? How is the budget set for a purchase? How does the
venture hope to ensure competition among vendors? How to ensure quality of received goods?
What will be the payment system? What will be the level of confidentiality between the venture
and vendors? Entrepreneurship
155. Suppliers Evaluate a supplier on: Timely delivery Completeness of orders shipped Quality
of items Price competitiveness Strength of financial condition Ability to service special orders
Quality of customer service Expertise of sales representatives and technical staff Consistency
on above factors
156. Prioritising Purchases Some items need more attention than others, on the basis of: Unit
cost Total cost Time to delivery Quality Criticality
157. Inventory Costs of carrying inventory Interest on the financial investment in inventory. Cost
of insurance covering inventory. Rental or ownership related costs of the store Cost of handling
inventory Obsolescence Pilferage, wastage or deterioration of stock
158. Types of Inventory On the basis of stage in process: Raw Materials Work In Progress
(WIP) Finished goods Goods for resale
159. Types of Inventory On the basis of reason for stock to be held: Buffer stock Safety stock
Overproduction Lot delay stock Demand fluctuation stock Line balance stock
160. Cash Management The efficient utilization of current assets and current liabilities
throughout each phase of the business cycle. The systematic planning, management and
monitoring of the companys collections and disbursements. The collection, management and
dissemination of information to enable effective use of available funds.
161. Good Vs Bad Cash Management Increasing the possibility that your business never runs
out of cash. Eliminating the constant worry associated with not knowing your current and future
cash position Improved relationships with your vendors as a result of good payment practices.
The ability to foresee cash flow problems long before they actually happen. Suppliers are going
to be dissatisfied with late paymentsand that will lead to higher prices, late deliveries or quality
problems. If you are unable to meet salary obligations on payday, employees are going to be
worried about the financial stability of the firm. If your cash problems are a result of tardy
collections, customers will stand to gain a lot by not paying up and taking their business
elsewhere.
162. Cash Manager Role of the cash manager: Efficiently collecting cash inflows Concentrating
collected funds Controlling the timing of cash outflows Forecasting the cash position Securing
adequate sources of short-term funds Optimizing use of any temporary cash surpluses
Gathering timely information Implementing the systems necessary to monitor, manage and
control the cash position Ensuring the internal and external transfer of financial data between
departments or with the bank.
163. Cash Problems As a result of business growth, cash can be: Mismatched Irregular
Unpredictable
164. Collecting Accounts Receivable Investigate new customers. Supply against written orders.
Sign on a legal contract. Maintain close contact with customers. Get and repeat positive
feedback. Send invoice ASAP.
165. Collecting Accounts Receivable Contact before sending invoice. Keep a close watch on
customers fortunes. Immediately contact on any delayed payment. Be firm Allow a customer to
graduate in his credit ratings with you.
166. Managing During Disasters Identify risks Reduce risks Plan Train Getting back to business
167. Seasonal Businesses Seasonal businesses try to cut costs during the off season. The
easiest way to do that is to cut down operations is seasons of low demand. By design some
seasonal businesses have low installed capacities but create additional capacities for the
season. E.g. restaurants putting in additional seats during a festive occasion are common sight
in all major cities.
168. Many businesses which close down during the off season depend on temporary labour and
sometimes even the infrastructure is leased for a short time only. Clothes exhibitions that spring
up in temporary shamianas (tent) are also another familiar sight in all cities.
169. The off season is a very good time to carry out routine maintenance and repair work. In
case the business is doing very well, the off season is a good time to plan and execute
expansion plans. In case the goods can be stocked, the fallow time in the off season can be use
to smoothen out the production schedule. So the entire year can be used to plan out production,
which is ultimately sol within a short time.
170. HUMAN RESOURCE MANAGEMENT CHAPTER 11 ENTREPRENEURSHIP
171. Chapter Objectives To discuss the process of hiring an employee To describe the interview
process To discuss the induction process To understand the ways of motivating employees To
discuss the important aspects of salary and perks To list the ways of providing training to
employees To understand the process of firing an employee
172. Job Description Elements of a job description Details of the job responsibilities The
qualifications desired The kind of experience the candidate should possess Salaries and other
benefits to be given Career path
173. Hiring People you know personally can be good employees. A referral is the next best
thing to knowing the candidate personally.
174. Other Sources Advertisements in local newspapers Posting on online job sites Accessing
listed resumes Tapping a placement agency
175. Induction Signing of joining papers Narration about the company A tour of the facilities
Early mentoring
176. Motivation Employees seek the following from their jobs: Recognition for good work done
by them Meaningful participation in the ventures endeavours A feeling of belonging and of
sharing in the success of the organization Opportunities for growth in accordance with their
competence and experience Security in their job as long as they perform according to
expectations Monetary reward for performance in their job Benefits relating to medical expenses
and insurance Entrepreneurship
177. Salary How employees measure their salary: The salary is comparable to salaries of
others in similar jobs in other companies within the industry The salary being paid should be
comparable to what the employee is likely to get in some other job. The salary should compare
with salaries of others with similar responsibilities within the company The salary should be
comparable to the salaries of his friends and peers outside the industry
178. Components of a Salary The fixed component Allowances Provident fund Medical
insurance and a life insurance cover. Additionally, a medical reimbursement can be provided for
incidental medical expenses. Annual bonus based on salaries or on performance. Employee
stock option plan (ESOP)
179. Some Perks Work related awards and competitions Recreation room in the office An
annual picnic or excursion Recognising achievements of employees and their family members
in other spheres Employees can be encouraged to attend seminars, workshops and short term
courses.
180. More perks Free or subsidised lunch in the office Discounts to employees on company
products Involving employees in a joint social cause Employees can be allowed to work from
home on selected days Bonus can be given to some or all employees. Gifts like a watch or a
household appliance on some important occasions
181. ENTREPRENEURIAL MARKETING CHAPTER 12 ENTREPRENEURSHIP
182. Chapter Objectives To look at the marketing constraints of entrepreneurial firms To list the
characteristics of entrepreneurial marketing To tabulate market research practices in
entrepreneurial firms To discuss the concepts of segmentation, targeting and positioning and
their relevance to entrepreneurial marketing To understand the process of brand building in
entrepreneurial firms To explore pricing in entrepreneurial marketing To look at the distribution
function in small firms To explore non-traditional advertising in entrepreneurial firms To tabulate
different types of promotional campaigns
183. Characteristics of Entrepreneurial Firms Limited resources Small size Newness
184. Entrepreneurial Marketing Proactive orientation Innovativeness Customer focus
Opportunity focus Risk management Value creation
185. Market Research Field survey Systematic Observation Focus groups Secondary sources
Test marketing
186. Field Survey Low cost field surveys: Convenience sampling Snowball sampling Omnibus
sampling Low-cost surveyors
187. Good Market Research The researcher understands decision alternatives and the
information required The relationship between results and the decision is understood by the
entrepreneur and the researcher The results are communicated well. Poor research design and
poor planning can delay the research or can result in erroneous conclusions. There is no
fudging of data
188. Forecasting Demand Define the total market Divide total demand into distinct market
segments Forecast drivers of demand in each segment Match with own product to come up with
possible sales of own product in that segment Total the forecasted sales in the segments that
can be profitably targeted Conduct sensitivity analysis to understand assumptions
Entrepreneurship
189. Attractiveness of a Segment Is your product able to deliver the value sought by a segment,
better than the competition? Can the segment be easily identified? Is the segment big enough in
terms of potential revenue? How easy is it to reach the segment with the positioning
communication and with the product? Entrepreneurship
190. Branding Strategic brand building Identity-building brand exposure Involve the customer in
the brand building experience Borrow practices from across industries Pilot test novel ideas
Have a brand manager Monitor results Do not outsource
191. According to Aaker, the following are the difficulties in branding: Pressure to compete on
price Proliferation of competitors Fragmentation of media and markets Brand relationships Bias
towards changing strategy Bias against innovation Pressure to invest elsewhere Short term
pressures Entrepreneurship
192. Costs and Pricing Producers costs indicate a floor price Customers cost indicates price
sensitivity Competitors costs indicate their strength
193. Pricing Assess what value customers place on the product. Look for variations in the way
customers value the product. Identify a pricing structure. Consider competitors reactions.
Monitor realised prices. Assess customers emotional response to prices.
194. Pricing Percepts Pricing of a product should work towards maximising present worth The
unit for making decisions and for measuring return is the entire economic life of the product
Pricing begins before production commences and re-pricing continues for the entire life cycle
Different pricing strategies can be used in different segments
195. Price Sensitivity Price sensitivity is less if a third party bears the cost. Sensitivity is high
when the cost of the item is a significant portion of the individuals total expenditure. Price
sensitivity is higher in the case of B2B buyers as the buyer is not end user. When there is no
differentiation between the products available, it becomes easy to compare products in the
category and the price sensitivity of customers increase. Price sensitivity is more when there is
easy access to competing products. Sensitivity decreases when there is a high cost of
switching. When a long term relationship with the seller is not important, price sensitivity is low.
196. Response to a Price Cut Is there a response that would cost less than the preventable
sales loss? If you respond, is competitor willing and able to reestablish the price difference?
Respond Does the value of the markets at risk justify the cost of response? Respond While the
multiple responses required to match a competitor cost less than the preventable sales lose?
Respond Accommodate or ignore Is your position in other markets of risk? Competitive price cut
or low cost product No No No No No Yes Yes Yes Yes Yes
197. Distribution Alternatives Go directly to the consumer Go directly to the retailer: bypass
distributor Use sales agents Participate in establisher channel structure Set up your own
intermediaries
198. Distribution Tasks
199. Buzz Marketing Most recent studies show that word-of-mouth is 10 times more effective
than other media Media is getting fragmented and ad clutter is rising. Companies feel the need
to stand apart Traditional forms of media are rising in cost. A 30 second slot during a cricket
match on a TV channel can cost over seven lakhs. Too many marketers are making conflicting
claims. The common mans trust in ads is coming down. Many new technologies provide the
impetus for the acceleration of buzz marketing. Entrepreneurship
200. Strategies for Buzz Give away valuable products or services Take advantage of others
resources The proper transfer mechanism should be in place Give people a story to tell The
entire self replicating communication should be scalable Utilize existing communication
networks rather than creating new ones Entrepreneurship
201. Promotion Objectives in a promotional campaign: SALES Increase in distribution outlets
Increase in shelf space Increased in-store presence Expand the selling season Increase
purchase frequency Increase usage occasions Increase average transaction size Induce trial
202. Steps in Planning a Promotion Planning a promotional campaign Establish its objectives
Plan on strategies and tactics Establish criteria for success Create back-up plan Review and
test Put controls in place Roll out
203. Types of Promotions Contests Coupons Discounts Continuity Point Of Purchase Sampling
Event Free gift Trade Promotions
204. Training Training of employees can be carried out by the following: Training institutes
Business schools In House training Online
205. Firing Reasons for termination of employment: Indiscipline Impropriety Underperformance
Lay off Resignation
206. Process of Termination An exit interview should be conducted and reasons for the
termination should be honestly discussed. A letter of recommendation should be promptly given
to the exiting employee. All terminal benefits and other payments due should be made promptly.
All documentation citing the reasons for termination should be organized.
207. NEW PRODUCT DEVELOPMENT CHAPTER 13 ENTREPRENEURSHIP
208. Chapter Objectives To understand the importance of having a NPD process To list the
types of new products To study the various stages of the NPD process To understand the
adoption of new products To tabulate the best practices in NPD To look at various ways of
involving customers in the NPD process To list various barriers to NPD To discuss the common
mistakes in NPD Entrepreneurship
209. Types of New Products New-to-the-world products New product lines Additions to a
product line Improvements and revisions of existing products Repositioning Cost reduction
210. Failure Rate of New Products Debugging Stage Expected Product Life Wearout Stage
Time Number of failure
211. The NPD Process Opportunity identification Concept generation Concept evaluation
Technical Development Launch Life Cycle Management
212. Product Testing Alpha testing Beta testing Gamma testing
213. The Adoption Process Awareness Interest Evaluation Trial Adoption
214. Adopter Groups According to Rogers, the adopter groups are: Innovators Early adopters
Early majority Late majority Laggards
215. Entrepreneurship Adopter Categories 21/2% Innovators 131/2% Early adopters 34% Early
majority 34% Late majority 16% Laggards Time of Adoption of Innovation
216. Adoption These five product characteristics influence product adoption: Relative advantage
Compatibility Complexity Divisibility Communicability
217. Communicate with the customer Tap employees for ideas New product team Budgeting
Letting go
218. Involving the Customer Lead user method Mapping the consumption chain
219. Barriers to NPD Shortage of funds Limited scope in some product categories Lack of time
Restrictive laws and regulations Small markets Changing technology Changing consumer
preferences Entrepreneurship
220. Common Mistakes in NPD No market research Hasty commercialization Focus on product
Lack of communication Product availability Pricing it high Pricing it low
221. Success of Entrepreneur in Rural India PANKAJ KUMAR Rai Business School
222. Content Rural Enterprise :- Some Facts Agriculture Entrepreneurial Development Under
TRYSEM Risk taking Among Rural Entrepreneur Development Strategy For Small Entrepreneur
Entrepreneurial Development In Backward Area
223. RURAL ENTERPRISES: SOME FACTS Fair industrial activity in rural India. There are
42.12 million enterprises in the country engaged in different economic activities other than crop
production and plantation of which 25.81 million (61.30%) are in the rural areas. The annual rate
of growth of enterprises and employment in rural areas was 5.53% and 3.33% respectively as
compared to 3.71% and 1.68% respectively in urban centers. Average annual growth in
employment is higher in rural areas (3.33%) than in urban India (1.68%).
224. Towards enabling Rural Areas. Agriculture
225. Risk Coverage Crops insurance KCC Other Loan
226. Information Technology Development Use of Village Internet kiosk and mobile phones for
Obtaining market-prices in different Markets Transaction and deal-closing from villages
Scheduling delivery Booking of transport Direct payment through banks and loan repayment
227. Training Programmed Skill Improvement Trainings Entrepreneurial Development
Programmers ( EDPs ) Agriculture and Animal Husbandry Training on DTP Fashion Designing
228. Entrepreneurial Development Under TRYSEM
229. Component of TRYSEM Identification of entrepreneurial Quality. Identification of
entrepreneurial opportunity. Training in motivation and skills. Provision of credit facilities. Risk
sharing by providing investment subsidy. Help in developing new materials and Market.
Constant monitoring and follow-up.
230. Risk taking Among Rural Entrepreneur
231. Environmental Risk Social Risk Economic Risk Technical Risk Types of Risk Types of Risk
232. Development Strategy For Small Entrepreneur
233. Condition Influencing The Entrepreneurial Trends Economic Conditions (infrastructural &
institutional) Insufficient (-) Entrepreneurial Trends Insufficient (-) Sufficient (+) Sufficient (+)
Little ( - - ) Low (+ - ) High (+ +) Low (+ -) Social Conditions Favorable (+) Favorable (+)
Unfavorable (-) Unfavorable (-) + =
234. Entrepreneurial Development In Backward Area
235.
236. Training and Entrepreneurship Development Programme in India Importance of training
Methods of training EDP- Need and importance Phases of EDP Selection of entrepreneurs for
EDP Training programme - Course contents Pre requisites of EDP Organisations providing EDP
237. Importance of Training Ensures availability of skilled manpower at all management levels
Enhancing abilities, potential among entrepreneurs Increase efficiency Maintain and enhance
product quality Minimise wastages in production process Minimise accidents on the job Reduce
fatigue and increase speed of work Standardisation in industry and internal processes
238. Methods of Training Individual instruction Group instruction Lecture method Demonstration
method Written instruction method Conference Meetings
239. EDP Designed with an aim of encouraging self employment Imparts training and motivates
potential and existing entrepreneurs to start new business or diversify and expand the existing
one Helps employment and wealth creation among educated unemployed youth Well equipped
to face risks and challenges as an entrepreneur Government needs considerable human and
material resource, importance to detailed planning & implementation
240. Phases of EDP Select area from existing government policy guidelines/socio-economic
reports Techno-economic survey of the selected area; feasibility study Identify potential and
existing entrepreneurs interested in starting new business/expansion/diversification Training
Follow up and consultancy services
241. Selection of entrepreneurs for EDP The programme is well publicised and promoted to
attract maximum applications for screening Selection of top 25 to 30 applicants only
Applications screened for: Demographics and socio cultural data age, education, work exp,
financial resources, type of business etc Motivation factors pull factors, source of
encouragement, credibility, endurance, concreteness of plans Psychological test results- traits
like risk taking, need for achievement
242. Training Course contents Introduction to entrepreneurship Motivation training Essentials
of management Fundamentals of project feasibility study Organising the business Plant visit
243. Pre requisites of EDP Selection of entrepreneurs Inputs for EDP Support system Follow up
244. Organisations providing EDP
245. National Institute for entrepreneurship and Small Business Development (NIESBUD)
Established by Government of India in 1983 An apex body for coordination and supervision on
activities of various institutes engaged in entrepreneurial development Helps evolution of EDP,
model syllabi, effective training strategies, methodology, manuals and tools Activities
undertaken: Organise and conduct training programmes Coordinate training activities of various
agencies/institutes Provide affiliation to such institutes Hold examinations and confer certificates
to trainers and trainees
246. Small Industries Service Institutes (SISI) Three months part time evening courses in
management 4-6 weeks part time courses in intensive training in functional areas (marketing,
finance) Special courses in quality control, HR, production planning, product development etc
Mobile workshops imparting training on correct usage of tools and equipment Helps with
preparation of plant layouts Helps individual firms on specific problems faced
247. Small Industries Development Organisation (SIDO) Runs EDP in collaboration with
financial institutes, directorate of industries Gives on the job training on shop floor (carpentry,
electrical devices) Sends its officials/trainers to organisations to update their knowledge
248. National Small Industries Corporation (NSIC) Provides apprenticeship for 2 years Training
supervisory staff of SSI up to 2 years Training to engineers up to 2 years Training workmen for
12 months Training to set up own venture Advice on machinery and components Production of
technologically advanced machines
249. Entrepreneurship Development Institute of India (EDII) Develops programmes for
entrepreneurial training and development Develops innovative training techniques for trainers
Focused attention on women entrepreneurs with first such EDP in 1988 EDP for rural
entrepreneurship development in U.P and Orissa Famous for organising camps on
entrepreneurship Condusted EDP in Sri Lanka, Nepal, Ghana, Kenya etc
250. National Alliance of Young Entrepreneurs (NAYE) Contribution in encouraging women
entrepreneurship Set up womens wing in 1975 This wing assists women in: Getting better
access to resources, infrastructure, markets Identify investment opportunities Attending to
problems of individual industries Sponsor participation in trade fairs, exhibitions, conferences
Organise seminars, training programmes, workshops

PROFESSIONALISMVS.FAMILY ENTREPRENEURS :
PROFESSIONALISMVS.FAMILY ENTREPRENEURS PRESENTED BY: AJAY KUMAR GUPTA

PROFESSIONALISM :
PROFESSIONALISM Professionalism is actually the process by which given occupation become professions in
the sense of attaining professional status. OR The expertness characteristic of a professional person.

ELEMENTS OF PROFESSIONALISM :
ELEMENTS OF PROFESSIONALISM ALTRUISTIC ACCOUNTABILITY EXELLENCE HONESTY/INTEGRITY
DUTIFUL RESPECT TO OTHER

Slide 4:
1.ALTRUISTIC: Showing unselfish concern for the welfare of others
2. ACCOUNTABILITY Responsibility and Reliability

Slide 5:
3.EXELLENCE Knowledgeable Skilful Competency to retrieve and handle information Appropriate decision
making skills Competency in skills of communication

Slide 6:
4. Honesty/ Integrity The quality of being honest Moral soundness Undivided or Unbroken 5. Dutiful
Appreciation of the role Aptitude for personal development 6. Respect to others

Professionalism in Business :
Professionalism in Business Health and Hygiene Personal Image-First Impressions REALLY Count!
Appearance and Dress Etiquette and Manners Always use the magic words: PLEASE and THANK YOU Be on
time Keep your promises Respect people and be courteous Follow up with thank-you notes Return all phone
calls Call ahead to confirm appointments

FAMILY ENTREPRENEUR :
FAMILY ENTREPRENEUR A family entrepreneurship is defined in terms of: Ownership control by members of
a family Strategic influence of a family in the management of the firm Concern for family relationship The dream
of continuity across generation

PROFESSIOANLISM VS. FAMILY ENTREPRENEURS :
PROFESSIOANLISM VS. FAMILY ENTREPRENEURS 1. DEGREE OF OPEN MINDEDNESS: Professional
are open minded, receptive to new ideas, ready to experiment. While family entrepreneurs generally lack this.

Slide 10:
2. NEW PRACTICES: Include Quality certification, Participative Mgmt., Change in working style, financing
pattern. Professional are always leaders in adopting them, experimenting with them. While there is lack of this
attitude in family entrepreneurs

Slide 11:
3. IMPARTIAL HRM: Professionals do not show partiality towards any particular gender. But family business
houses employ their relative or friends or people belonging to same social caste in responsible position.

Slide 12:
4.ORGANIZATION ORIENTED FINANCIAL MANAGEMENT: Professionals tend to make financial decision in
the way which is best for the organization. But family entrepreneurial firms give first priority to their familiar
concern & interests.

Slide 13:
5.DECISION MAKING STYLE: The decision making process in professional run organization tends to be
qualitative better & vision to be broader. It is mostly participative. While in family run businesses is more
autocratic in nature. Here it is mostly owner entrepreneur himself or herself who makes the decision sometimes
with the help of his family members or friends.
ROLE OF WOMEN ENTREPRENEURS:
ROLE OF WOMEN ENTREPRENEURS PRESENTATION BY S.Alexander M.Arun kumar J.Nikhil kumar

Introduction:
Introduction Women entrepreneurs may be defined as a woman or a group of women who initiate, organize and
run a business enterprise. In terms of Schunpeterian concept of innovative entrepreneurs, women who
innovate, initiate or adopt a business activity are called business entrepreneur.

Areas of Women Entrepreneurs:
Areas of Women Entrepreneurs The areas chosen by women are Retail Trade, Restaurants, Hotels, Education,
Cultural, Cleaning Insurance and Manufacturing .

Women entrepreneurs in India:
Women entrepreneurs in India The Government of India has defined women entrepreneurs based on women
participation in equity and employment of a business enterprise . Accordingly, a woman entrepreneur is defined
as an enterprise owned and controlled by a woman having a minimum financial interest of 51% of the capital
and giving at least 51% of the employment generated in the enterprise to a woman.

Reasons for their marks in business:
Reasons for their marks in business They want to improve their mettle in innovation and competitive jobs. They
want the change to control the balance between their families and responsibility and their business levels. They
want new challenges and opportunities for self fulfillment.

Role of women as an Entrepreneur's:
Role of women as an Entrepreneur's Imaginative Attribute to work hard Persistence Ability and desire to take
risk Profit earning capacity

Imaginative:
Imaginative It refers to the imaginative approach or original ideas with competitive market. Well-planned
approach is needed to examine the existing situation and to identify the entrepreneurial opportunities. It further
implies that women entrepreneur's have association with knowledgeable people and contracting the right
organization offering support and services

Attribute to work hard:
Attribute to work hard Enterprising women have further ability to work hard. The imaginative ideas have to come
to a fair play. Hard work is needed to build up an enterprise..

Persistence:
Persistence Women entrepreneurs must have an intention to fulfill their dreams. They have to make a dream
transferred into an idea enterprise; Studies show that successful women work hard.

Ability and desire to take risk:
Ability and desire to take risk T he desire refers to the willingness to take risk and ability to the proficiency in
planning making forecast estimates and calculations.

Profit earning capacity:
Profit earning capacity she should have a capacity to get maximum return out of invested capital.

Functions of Women Entrepreneurship:
Functions of W omen Entrepreneurship Exploration of the prospects of starting a new business enterprise.
Undertaking a risk and handling of economic uncertainties involved in business. Introduction of innovations,
imitations of innovations. Co ordination, administration and control. Supervision and leadership.

Successful Women Entrepreneurs:
Successful Women Entrepreneurs Indra Nooyi Kiran Mazumdar-Shaw Priya Paul Naina Lal Kidwai

Indra Nooyi:
Indra Nooyi Born 28 October 1955 (age 56) Chennai, Tamil Nadu, India Citizenship United States Alma mater
Madras Christian College IIM Calcutta Yale School of Management Occupation Chairman & CEO of PepsiCo
Predecessor Steven Reinemund Religion Hindu Awards Padma Bhushan 2007

Kiran Mazumdar-Shaw:
Kiran Mazumdar -Shaw Born March 23, 1953 (age 58) Bangalore, India Residence Bangalore, India Education
Mount Carmel College, Bangalore University. Occupation Chairperson of Biocon Net worth US$900 million
(2010 )

Priya Paul:
Priya Paul Priya Paul Born 1967 Nationality Indian Occupation Chairperson [The Park Hotels]]

Naina Lal Kidwai:
Naina Lal Kidwai Naina Lal Kidwai is an Indian business executive. She is currently the Group General Manager
and Country Head of HSBC India. S he is a chartered accountant by profession, later earned a Bachelors
degree in Economics from University of Delhi and an MBA from Harvard Business School in 1982 . Kidwai was
the first Indian woman to graduate from Harvard Business School. During 1994-2002, she worked at Morgan
Stanley as Vice Chairman of JM Morgan Stanley and Head of the Investment Bank in India.

Conclusion:
Conclusion women entrepreneur are those women who think of a business enterprise, initiate it organize and
combine the factors of production, operate the enterprise, undertake risk and handle economic uncertainties
involved in running a business enterprise.
BIFR struggling to revive sick companies
Our Mumbai Bureau

The role of the Board for Industrial and Financial Reconstruction (BIFR) needs a
re-look in the face of a steep rise in the number of industries turning sick. BIFR
was constituted to facilitate the revival of industries deemed sick.
When an industry turns sick, BIFR takes on the role of a quasi-judicial body and
dispenses functions as an operating agency (generally the lead financial institution
having the largest loan exposure among the creditors) to devise a revival strategy
proposal.
The company or bank, as the case may be, if not satisfied with BIFR ruling can
approach the Appellate Authority for Industrial Financial and Reconstruction
(AAIFR) for redressal. The High Court, Delhi, may be approached thereafter if
the AAIFR verdict is found to be unsatisfactory. There is no time limit on the
revival procedure.
Progress in the right disposal of sick company cases registered with BIFR has
been slow on account of the conflicting interests between the companies and the
creditors (banks and financial institutions, government bodies/agencies) and
certain lacunae in the SICA Act. The rehabilitation schemes met with 40-45 per
cent failure, as a result of which many of the cases had to be reopened.
When a company (an industrial company registered for not less than five years)
incurs accumulated loses equal to or in excess of its entire net worth at the end of
a financial year, by definition, such a company is considered sick.
The rate of registration/sickness increased substantially during 1997 due to (a) the
recessionary trends prevalent in industry (b) poor financial market conditions and
(c) the tough stance taken by banks/financial institutions (FIs) towards
defaulters/potential sick companies under their non-performing assets (NPA)
accounts for rescheduling of repayments, etc.
The problem appears even more acute if one takes note of potentially sick BIFR
companies, as also the NPAs of FIs and banks. In fact, the NPAs of banks and
others have risen to a whopping Rs 40,000 crore.
The outstanding bank credit against sick companies has reached an abnormal
proportion of over Rs 13,739 crore, which is 13.3 per cent of the total bank credit
given to industry. Over 12 lakh workers have been affected by companies turning
sick.
The problem is aggravated by the reduction in the strength of BIFR. As against
the permitted number of 14 members on the board, only three are there on the
board since April 1997. According to Chetan Dalal, member, Finance Banking
and Insurance COM.IMC, "With the retirement of two other members on
September 30, 1997, only one member will be left to manage BIFR. In fact, the
short tenure (maximum of three years) on board makes the members ineffective
with regard to the revival procedures as these procedures take a long time to
realise their objectives."
Definition of 'Syndicated Loan'

A loan offered by a group of lenders (called a syndicate) who work together
to provide funds for a single borrower. The borrower could be a corporation,
a large project, or a sovereignty (such as a government). The loan may
involve fixed amounts, a credit line, or a combination of the two. Interest
rates can be fixed for the term of the loan or floating based on a benchmark
rate such as the London Interbank Offered Rate (LIBOR).

Typically there is a lead bank or underwriter of the loan, known as the
"arranger", "agent", or "lead lender". This lender may be putting up a
proportionally bigger share of the loan, or perform duties like dispersing
cash flows amongst the other syndicate members and administrative tasks.

Also known as a "syndicated bank facility".



Lateral Thinking: Solving problems in unconventional ways--a way of thinking which seeks
solutions through unorthodox methods that would normally be ignored by logical thinking. de Bono
wrote this classic book in the 1970's. de Bono Thinking Systems, Inc. launched the course in 1994.
Lynda Curtin was certified by de Bono in 1994 during the launch of this course.
De Bono Thinking Systems Methods are utilized by people of all ages and professions, including
Nobel Prize laureates and corporate executives at some of the world's largest organizations.

1. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA Presented By Mr. Naveen S.D
9019471564 The Oxford College of Business Management, Bangalore
2. Introduction The Government of India set up the SIDBI under a special Act of the Parliament
in October 1989. SIDBI commenced its operations from April 2, 1990 with its head office in
Lucknow. SIDBI has been setup as a wholly owned subsidiary of IDBI. Its authorised capital is
Rs.250 crore with an enabling provision to increase it to Rs.1000 crore. It is the apex institution
which oversees, co-ordinates & further strengthens various arrangements for providing financial
and non-financial assistance to small-scale, tiny, and cottage industries.
3. Mission & Vision Mission: To empower the Micro, Small and Medium Enterprises (MSME)
sector with a view to contributing to the process of economic growth, employment generation
and balanced regional development Vision: To emerge as a single window for meeting the
financial and developmental needs of the MSME sector to make it strong, vibrant and globally
competitive, to position SIDBI Brand as the preferred and customer - friendly institution and for
enhancement of share - holder wealth and highest corporate values through modern technology
platform
4. Objectives Four basic objectives are set out in the SIDBI Charter. They are: Financing
Promotion Development Co-ordination for orderly growth of industry in the small scale sector.
The Charter has provided SIDBI considerable flexibility in adopting appropriate operational
strategies to meet these objectives.
5. Products & Services Direct finance. Bills finance Refinance International finance Promotional
& Development activities. Fixed deposit scheme Technology Upgradation & Modernisation Fund
Scheme {TDMF} Venture Capital Fund Scheme Seed Money Schemes National Equity Fund
Scheme
6. Direct Finance Since its beginning, SIDBI had been providing refinance to State Level
Finance Corporations / State Industrial Development Corporations / Banks etc., against their
loans granted to small scale units. SIDBIs direct finance schemes are: Scheme for expansion /
diversification of small scale units. Scheme for specialised marketing agencies. Scheme for
ancilaring / subcontract units. Scheme for existing Export Oriented Units(EOUs) to enable them
to acquire ISO 9000 series certification.
7. Bills Finance Schemes Bills Finance Scheme involves provision of medium and short-term
finance for the benefit of the small-scale sector. Bills Finance seeks to provide finance, to
manufacturers of indigenous machinery, capital equipment, components sub-assemblies etc,
based on compliance to the various eligibility criteria, norms etc as applicable to the respective
schemes. To be eligible under the various bills schemes, one of the parties to the transactions
to the scheme has to be an industrial unit in the small-scale sector within the meaning of
Section 2(h) of the SIDBI Act, 1989.
8. Refinance Schemes Refinance scheme is introduced for catering to the need of funds of
Primary Lending Institutes {PLI} for financing small scale sector. Under the scheme, SIDBI
grants refinance against term loans granted by the eligible PLIs to industrial concerns for setting
up industrial projects in the small scale sector as also for their expansion / modernisation /
diversification. PLIs are SIDC, SFC. Banks like commercial banks, Co-operative Banks,
Regional Rural Banks Schemes of re-finance assistence: Scheme for SC-ST & physically
handicraft persons Composite loan scheme Equipment refinance schemes. Schemes for small
road transport operators. Special assistence to ex-servicemen.
9. International Finance Schemes The main objective of the various International Finance
schemes is to enable small-scale industries to raise finance at internationally competitive rates
to fulfill their export commitments. The financial assistance is being offered in US Dollars and
Euro currencies. Assistance in Rupees is also provided to the needy borrowers. The
international finance is available from pre-shipment & post shipment credit. Need based limit,
depending on the normal trade terms and credit period given to overseas buyers by exporters
not exceeding 180 days.
10. Fixed Deposit Scheme The Interest Rate Structure for SIDBI Fixed Deposit Scheme of
SIDBI are as under: 7.50 14 months - 36 months 7.00 14 months - 36 months 6.50 12 months -
13 months Interest (% p.a.) Revised Annual Interest Rate %p.a. * w.e.f August 10, 2009 Time
period 8.0 7.5 7.0 For Senior Citizens
11. Promotional and Development Activities As an apex financial institution for promotion,
financing and development of industry in the small scale sector, SIDBI meets the varied
developmental needs of the Indian SSI sector by its wide-ranging Promotional and
Developmental (P&D) activities. The activities are as follows:
Enterpreneurship Development Programmes. Management Development Programmes.
Technology Upgradation Programmes.
12. Technology Upgradation & Modernisation Fund Scheme {TDMF} This fund was setup in the
year 1996 by the SIDBI with an initial capital of 200 crores. It was setup for the purpose of
encouraging the existing small scale industrial units to modernise production facilities and adopt
improved and updated technology for strengthning export capabalities. For availing benefits
under this scheme the unit have to prepare an estimate for modernisation & submit it to SIDBI.
The sanction of funds is made depending upon the estimate submited.
13. Venture Capital Fund Scheme SIDBI is participating in the Venture capital fund set by public
sector institutions as well as private companies to the extent of Rs,50,00,000 of total capital of
the fund required. The fund should be dedicated to financing small industry preferabally the
most risky one.
14. National Equity Fund Scheme In order to provide equity type assistance, SIDBI is operation
a National Equity Fund Scheme. The equity capital loan to the extent of 2.5lakh is sanctioned to
each project provided the profect qualities under this scheme.
15. Seed Money Schemes One of the constraints faced by Entrepreneurs is the lack of own
resources to promote the minimum promoter contribution. Hence, SIDBI introduced seed money
scheme for the benefit of entrepreneurs. Seed money is available through DIC { Direct Industry
Centre } to those entrepreneur who are technically qualified but lack of own capital.
INSTITUTIONAL SUPPORT FOR NEW VENTURES

SUPPORTING ORGANISATIONS

ALL INDIA INSTITUTIONS

1 Small Scale Industries Board: SSI Board is the apex non-statutory advisory body constituted by
the Government of India to render advice on all issues pertaining to the SSI sector. It provides a
forum to its members for interaction to facilitate co-operation and inter institutional linkages and to
render advice to the Government on various policy matters, for the development of the sector. The
Board was first constituted in 1954. Its term is for two years.

2 Ministry of Small Scale Industries: The process of liberalization and market reforms has created
wide-ranging opportunities of the development of small scale industries. At the same time, 280
changing world scenario has thrown up new challenges to the very existence of this sector. The need
of the hour is to suitably strengthen the sector so that it could adapt itself to the changed environment
and face the challenges boldly and effectively. The implementation of policies and various
programmers/schemes for providing infrastructure and support services to small enterprises is
undertaken through its attached office, namely the Small Industries Development Organization
(SIDO), statutory bodies/other organizations like Khadi and Village Industries Commission (KVIC)
& Coir Board, National Small Industries Corporation (NSIC) and three training institutes- National
Institute of Small Industry Extension Training (NISIET), Hyderabad, Indian Institute for
Entrepreneurship (IIE), National Institute for Entrepreneurship and Small Business Development
(NIESBUD)

3 Small Industry Development Organisation (SIDO):
Advising the Govt. in policy matters concerning small scale sector.
Providing techno-economic and managerial consultancy, common facilities and extension
services.
Providing facilities for technology up-gradation, modernization quality improvement &
infrastructure.
Human resources development through training and skill up-gradation.
Providing economic information services.
Maintaining close liaison and vital linkage with the Central Ministries, Planning
Commission, Financial Institutions, State Govts. & similar other developmental
organizations/agencies related to the promotion and development of SSI Sector.

4 National Small Industries Corporation (NSIC) Limited: Some of the main services provided by
NSIC are described below:
Machinery and Equipment (Hire-Purchase Scheme)
Machinery and Equipment (Lease Scheme)
Financial Assistance Scheme
Assistance for Procurement of Raw Material
Marketing Assistance
Government Store Purchase Programme
Technology Transfer Centre

5 The Khadi and Village Industries Commission (KVIC) The Khadi and Village Industries
Commission (KVIC) is a statutory body created by an Act of Parliament in April 1957. The KVIC is
supposed to do the planning, promotion, organization and implementation of programmes for the
development of khadi and other village industries in the rural areas in coordination with other
agencies engaged in rural development wherever necessary. The broad objectives that the KVIC has
set before it are:
The social objective of providing employment
The economic objective of producing saleable articles,
The wider objective of creating self-reliance amongst the poor and building up of a strong rural
community spirit.

6 Coir Board: Coir Board is a statutory body established by the Government of India under a
legislation enacted by the Parliament namely Coir Industry Act 1953 for the promotion and
development of Coir Industry in India as a whole.

7Industrial Finance Corporation of India ltd (IFCI): Some sectors that have directly benefited
from IFCIs disbursals include:
Consumer goods industry (textiles, paper, sugar);
Service industries (hotels, hospitals);
Basic industries (iron & steel, fertilizers, basic chemicals, cement);
Capital & intermediate goods industries (electronics, synthetic fibers, synthetic plastics,
miscellaneous chemicals); and
Infrastructure (power generation, telecom services).

8 Training Institutes:
National Institute of Small Industries Extension Training (NISIET)
The NISIET since its inception by the Government of
India has taken gigantic strides to become the premier institution for the promotion, development and
modernization of the SME sector. An autonomous arm of the Ministry of Small Scale Industries, the
Institute strives to achieve its avowed objectives through a gamut of operations ranging from
training, consultancy, research and education, to extension and information services.

National Institute for Entrepreneurship & Small Business Development (NIESBUD):
NIESBUDS role is that of a catalyst as it helps in developing the effectiveness of all these
organizations. Programmes initiated/sponsored by the NIESBUD are constantly evaluated and
revised to suit the changing needs in the area of entrepreneurship and small business development.
The institute is engaged in creating a climate conducive for entrepreneurship and in developing
favourable attitude amongst the general public in support of those who opt for entrepreneurial
career.
Entrepreneurship Development Institute of India (EDII):EDII has been spearheading an
entrepreneurship movement throughout the nation in the belief that entrepreneurs need not
necessarily be born; they can be developed through well-conceived and well-directed activities.

Indian Institute of Entrepreneurship (IIE):The policy direction and guidance is provided to the
Institute by its Board of Management whose chairman is the Secretary to the Government of India,
Ministry of Small Scale Industries. Chairman, NEC, heads the governing council of the institute and
the Secretary, SSI and ARI, and Govt. of India head the Executive Committee.

STATE LEVEL INSTITUTIONS
1 State Industrial Development Corporations (SIDCs): The State Industrial Development
Corporations were set up under the Companies Act, 1956, as wholly owned state government
undertakings for promotion and development of medium and large industries. In addition to
provision of financial assistance, they are also involved in developing industrial infrastructure like
industrial estates, industrial parks and setting up industrial projects either on their own or in the joint
sector in collaboration with private entrepreneurs or as wholly owned subsidiaries.

2 State Directorate of Industries (SDIs) Under the constitution of India promotion and
development of small scale industries is a State subject. Therefore, the primary responsibility for
implementation of policies and programmes of assistance rests with the Directorate of Industries in
each State. It acts under the overall guidance of SIDO and concerned Central institutions. It performs
both regulatory and developmental functions. It functions through a network of District Industries
offices, industries offices and extension offices at district sub-division and block level respectively.
The main functions of Directorate of Industries are as follows:
a) Registration of small scale units
b) Providing financial assistance
c) Distributing scare and indigenous raw materials to industrial units
d) Granting essentiality certificates for import of raw material
e) Establishing industrial estates and industrial co-operatives
f) Developing industrial infrastructure
g) Undertaking industrial surveys and collecting information
h) Arranging concessions and incentives for industries.
i) Overall administration of village and small scale industries.
j) Maintaining liaison with other agencies for industrial development.


3 District Industries Centres (DICs) Initially institutional infrastructure for small industry
development existed at the state level and there was hardly any promotional machinery at the district
level except a small office of the district industries. In late 70s, it was felt that if a district has to be a
unit of planning, there should be strong promotional machinery with delegated powers at the district
level. It was therefore, felt that an agency should be set up a district level, which will have necessary
expertise to guide an entrepreneur and meet all his requirements

FUND-BASED INSTITUTIONS
1 Small Industries Development Bank of India (SIDBI): Small Industries Development Bank of
India (SIDBI) was established in April 1990 under an Act of Indian Parliament as the principal
financial institution for:
Promotion
Financing
Development of industry in the small-scale sector
Co-ordinating the functions of other institutions engaged in similar activities

2 Commercial Banks:
a) Industrial Credit and Investment Corporation of India Ltd. (ICICI): The ICICI performs the
following functions:
(i) It provides assistance by way of rupee and foreign currency loans, underwriting and direct
subscriptions to shares/debentures and guarantees,
(ii) It offers variety of financial services such as deferred credit, leasing credit, installment sale,
asset credit and venture capital.
(iii) It guarantees loans from other private investment sources.

b) Industrial Development Bank of India (IDBI) The IDBI provides assistance to the small-scale
industries through its scheme of refinance and, to a limited extent, through its bills rediscounting
scheme. As it is not feasible for the IDBI to reach a large number of small-scale industries scattered
all over the country, the flow of its assistance to this vast number has, therefore, been indirect in the
form of refinancing of loans granted by the banks and the State Financial Corporations (SFCs).
3 State Financial Corporations (SFCs) SFCs provide term loan to small and medium scale
industries for creation of assets, viz., land, building and machinery. They also provide working
capital term-loan to the industrial units on competitive terms. Various non-fund based services like
merchant banking, under-writing of public issues, project counseling, bill discounting, leasing and
hire purchase are also been undertaken by them. They are operating a number of financial assistance
schemes for the benefit of the entrepreneurs such as assistance for marketing activities, equipment
finance, special schemes for assistance to ex-servicemen, single window scheme, etc. SFCs provide
maximum loan upto Rs. 240 lakhs. The interest on loan ranges between 13.75% to 16.5% depending
upon the size of the loan and its term.

POLICY SUPPORT TO SMALL SCALE INDUSTRIES
INTRODUCTION
After attaining independence in 1947 India adopted mixed economic planning as a method to
achieve economic development. Along with the Large Scale sector the thrust was on Small Scale
sector because of it decentralized, its small size, use mainly indigenous technology, employment
intensity and its suitability for rural area with limited techno-economic structure. Industrial policies
over the year have focused to promote SSIs through various incentives related to financial, fiscal and
infrastructure measure; along with a heavy industrial base.

The various provisions under Industrial Policy Resolutions formulated by the government in
assisting the small scale industries (SSI) The various fiscal incentives for SSIs
INDUSTRIAL POLICY RESOLUTION AND SSIs INDUSTRIAL POLICY RESOLUTION 1948
1 SSIs are particularly suited for the utilization of local resources and creation of employment
opportunities .
2 The primary responsibility for developing small industries by creating infrastructure has been
provided to state government .
3 Central government frame the broad policies and coordinates the efforts of State Government for
development of SSIs.





INDUSTRIAL POLICY RESOLUTION 1956
1 It stated that besides continuing the policy support to cottage, village and small industries by
differential taxation or direct-subsidies, the aim of state policy would be that the development of this
sector is integrated with that of large scale industry.
2 The focus was to improve the competitive strength of SSIs.

INDUSTRIAL POLICY RESOLUTION 1977
The main thrust of policy was effective promotion of cottage ,village and small industries widely
dispersed in rural area and small towns. This thinking specified the following things: 504 items were
reserved for exclusive production in the small scale industries . The concept of District Industrial
Centers (DICs) was introduced to that in each district a single agency could meet all the requirement
of SSIs under one roof. Technological up gradation was emphasized in traditional sector . Special
marketing arrangement through the provision of services, such as, production standardization,
quality control, market survey, were laid down.

INDUSTRIAL POLICY RESOLUTION 1990 Main feature of this resolution are as follows:
1. It raised the investment ceiling in plant and machinery for SSIs.
2. It created central investment subsidy for this sector in rural and backward area. Also, assistance
was granted to woman entrepreneurs for widening the entrepreneurial base.
3. Reservation of items to be produced by SSIs was increased to 836.
4. Small Industries Development Bank of India was established to ensure adequate flow of credit to
SSIs.
5. Stress was reiterated to upgrade technology to improve competitiveness.
6. Special emphasis was laid on training of woman and youth under Entrepreneurial Development
Programme.
7. Activities of Khadi and Village Industries Commission and Khadi and Village Industrial Board
were to expand.

INDUSTRIAL POLICY RESOLUTION 1991 The basic thrust of this resolution was to simplify
regulations and procedures by delicensing, deregulation . Its salient feature are: SSIs were exempted
from licensing for all articles of manufacture. The investment limit for tiny enterprises was raised to
Rs.5 lacs irrespective of location. Equity participation by other industrial undertaking was permitted
up to a limit of 24% of shareholding in SSIs. Factoring services were to launch to solve the problem
of delayed payment to SSIs. Priority was accorded to small and tiny units in allocation of indigenous
and raw materials. Market promotion of products was emphasized through co-operatives, public
institutions and other marketing agencies and corporations.

COMPREHENSIVE POLICY PACKAGE FOR SSIS AND TINY SECTOR 2000
The exemption for excise duty limit raised from 50 lakhs to Rs One crore to improve the
competitiveness. The third census of small scale industries by the ministry of SSI was conducted.
which also covered sickness and its causes in SSIs. The limit of investment was increased in
industry related service and business enterprises from Rs 5 lakhs to Rs 10 lakhs. The scheme of
granting Rs 75000 to each small scale enterprise for obtaining ISO 9000 certificate was continued till
the end 10 th plan.
SSI associations were motivated to develop and operate testing laboratories. One time capital grant
of 50% was given on reimbursement basis to each association. The limit of composite loan was
increased from Rs10 lakhs to Rs 25 lakh. The coverage of ongoing Integrated Infrastructure
Development (IID) was enhanced to cover all area in the country with 50% reservation for rural area
and 50%earmarking of plots for tiny sector. The family income eligibility limit of Rs 24000 was
enhanced to Rs 40000 per annum under the Prime Minister Rozgar Yozna (PMRY).

INDUSTRIAL POLICY PACKAGE FOR SSI 2001-02
This policy emphasizes the following: The investment limit was enhanced from Rs 1crore for to Rs 5
crore for units in hosiery and hand tool sub sectors. The corpus fund set up under the Credit
Guarantee Fund Scheme was increased from 125 crore to 200 crore . Credit Guarantee cover was
provided against an aggregate credit of Rs 23 crore till December 2001. 14 items were de-reserved in
June 2001 related to leather goods, shoes and toys. Market Development Assistant Scheme was
launched exclusively for SSI sector. Four UNIDO assisted project were commissioned during the
year under the Cluster Development Programme .

INDUSTRIAL POLICY ON SSIS 2004-05
Policy initiatives for this year are as follows: The national commission on Enterprises in the Un-
organized/Informal Sector was set up in September 2004.It suggested measures considered necessary
for improvement in the productivity of these enterprises, generation of large scale employment
opportunities, linkage of the sector to institutional framework in area like credit ,raw material supply,
infrastructure, technology up gradation ,marketing facilities and skill development by training . 85
items were de-reserved in October 2004. The investment limit in plant and machinery was raised
from Rs One crore to Rs 5 crore in October 2004,in respect of seven item of sports goods to help to
upgrade the technology and enhance competitiveness. The Small and Medium Enterprise (SME)
fund of Rs 10000 crores was stared by SIDBI since April 2004,with 80% of the lending for SSI
units. The interest rate was 2%below the prevailing Prime Lending Rate (PLR) of the SIDBI. The
reserve Bank of India raised the composite loan limit from Rs 50 lakhs to Rs One crore. Promotional
Package for small enterprises was initiated.

POLICY PACKAGE FOR SME 2005-06 THIS POLICY PACKAGE CONTAINS THE
FOLLOWING POINTS 180 items were dereservation. Small and Medium Enterprises were
recognized in the services sector , and were treated on par with SSIs in the manufacturing sector. The
corpus of the Credit Guarantee Fund was raised from Rs 1132 crore in March 2006 to Rs 2500 crore
in five years. Credit Guarantee Trust for Small Industries (CGTSI) was advised to reduce the one
time guarantee fee from 2.5% to 1.5% for all loans. Insurance cover was extended to proximately
30,000 borrowers, identified as chief promoters, under the CGTSI. The sum assured would be Rs
200000 per beneficiary and the premium will be paid by CGTSI. The emphasis was laid on Cluster
Development model not only to promote manufacturing but also to renew industrial towns build new
industrial township . The model is now being implemented, in nine sector including khadi and
village industries, handlooms, textiles, agricultural products and medicinal plants.

FISCAL INCENTIVES AND FACILITIES TO SSIs
Fiscal incentives are provided through tax concessions granted in the form of exempted of direct or
indirect taxes leviable on production or profits, besides special tax concessions. These incentives
have been provided to promote the SSIs and discussed in following:

1.TAX HOLIDAY With effect from financial year 2005-06, deduction in respect of profit and gains
for small scale industrial undertaking is available under Section 80IB. Small scale industrial
undertaking can claim deduction at the following rates: If SSI unit is owned by a company , the
deduction available is 30% for first 10 year , If SSI unit is owned by a co-cooperative society, the
deduction to be availed is 25% for first 10 years , and If any other person owns SSI units ,the
deduction to be claimed is 25% for first 10 years .

2.TAX EXEMPTION CONDITIONS: No small scale or ancillary undertaking shall be subsidiary
of, or owned or controlled by other industries undertaking . The SSI unit should commence business
between 1 st April1991 and 31 st March 2002. SSI unit can manufacture any nature/type of goods
/article to avail deduction. They should employ at least 10 workers in manufacturing process carried
out with aid of power or at least 20 worker in manufacturing process carried out without the aid of
power. This tax exemption from total income is allowed from the assessment year in which the unit
being to manufacture or produce goods or articles.

3.EXCISE CONCESSIONS: Government of India has provided a major relief by grating full
exemption from the payment of central excise duty on a specified output and thereafter slab-wise
concessions. The following concessions are available to them in this regard:
1) SSI units producing goods up to Rs.100 lakhs are exempted from payment of excise duties.
2) SSI units having turnover less than Rs.60 lakhs per annum need not have a separate storeroom for
storing the finished products. 3)SSIs are also not required to maintain any statutory records such as
daily stock account of production and clearance , raw material account ,personal ledger account etc.
their own record are adequate for excise purpose.
4) There is no distinction between registered and unregistered units for SSI concessions for SSIs has
been based on annual turnover rather than SSI registration . Duty liability is to be discharged by 15
th of following month.
5)The SSI exemption is available for home consumption ,as well as in respect of goods exported to
Nepal & Bhutan.
6) Normally ,excise officers are not expected to visit SSI units paying less than Rs.11lakhs duty
annually .
7)With effect from 1-4-1994, Gate Pass System was replaced by manufacturer invoice to cover
clearance of goods as the duty-paying document.

4.MEASURES FOR PROMOTION AND DEVELOPMENT OF SSIs Central and state
Government have formulated several schemes to make the SSIs vital and competitive. Reservation
policy Governments purchased preference policy for SSI products. Governments price preference
policy for marketing SSI products. Technical assistance Raw material assistance Financial assistance
New initiatives

5.RESERVATION POLICY Out of 836 items reserved in 1989,39 items were dereserved in four
phases viz., 15 items in 1997 9 items on 1999 1 item on 2001 and, 14 item on 2001.subsequently, 51
item were dereserved in 2002, 75 item in 2003 and 85 items in 2004, 108 in March 2005 and 180 in
May 2006. Now 298 items stand reserved for this sector.

6.GOVERNMENTS PURCHASE PREFERENCE POLICY FOR SSI PRODUCTS Under the
Store Purchase Policy of the Government 409 items of store were reserved for exclusive purchase
from KVIC/Womens Development Corporation/Small Scale units in 1989. This list reviewed . In
February2004, the Committee (set up to consider the question of inclusion of additional items)
revised list and 358 items were approved , after deleting items having common nomenclature and
addition of some new ones. This list also includes 8 handicraft items reserved for purchase from the
Handicraft Sector.

7.GOVERNMENT PRICE PREFERENCE POLICY FOR MARKETING SSI PRODUTS
These facilities includes the following : Price preference up to 15%in case of selected items. No
registration fee. A consortium to channelize and identify for the production of SSIs both in India and
abroad.

8.The Single Point Registration scheme of NSIC the following benefits are given to SSIs units,
which get them registered with the NSIC: Availability of tender sets free cost. Exempted from
payment of Earnest Money Deposit. Exempted from payment of Security Deposit up to the monetary
limit for which the unit is registered. Price preference up to15% over the lowest quotation of the
large scale units. The benefit is available to compensate them on a/c of non-availability of economies
of scale ,poor resource base, poor access to raw material as compared to the large scale sector.

9.TECHNICAL ASSISTANCE Technology audits and benchmarking Technology needs
assessment Technology sourcing Application of new acquisition. Technology acquisition . Material
testing facilities through accredited laboratories. Product design including Computer Aided Designs.
Common facility support in machining Energy and environment services at selected centers.
Classroom and practical training for skill up gradation.