ENTREPRENEURSHIP

TUTORIAL-1

Subject code-EOE-071 Session:2011-2012

Submitted toMr.K.S MEHTA SIR

Submitted byBharti marken(C.S.E) B.tech 4rth yr 0819210031

TUTORIAL-1
Q-1 Define Entrepreneurship? Elaborate its scope and vital role it plays in developing economics? Ans- Entrepreneurship is more than simply starting a business. The
definition of entrepreneurship is a process through which individuals identify opportunities, allocate resources, and create value. This creation of value is often through the identification of unmet needs or through the identification of opportunities for change. The small-scale industries contribute a lot to the progress of the Indian economy. They have also a great potential for the future development of the economy. Some of the important roles are: 1. Large Scope for Employment. 2. Large Production. 3.Large Exports. 4. Use of Latent (domestic) resources. 5. Promoting Welfare.

Q-2 Developing countries need initiative rather than innovative entrepreneurship comment? Ans- Clarence Danhof in his statement on the classification of
entrepreneurs said that the under-developed countries and developing countries possess imitative entrepreneurs rather than the innovative entrepreneurs. Not only Danhof but also I do think that the innovating entrepreneurs are not perfect for the economic condition of an underdeveloped or developing country. The reasons behind my belief are briefly gleaned:1. Cost: An innovating entrepreneur is one who introduces new goods, inaugurates new method of production to produce a new product. On the other hand, an imitative entrepreneur follows the innovator entrepreneurs.. Since innovative entrepreneurs need to expense a lot of money that imitative entrepreneurs. So developing countries need imitative entrepreneurs.

2. Technology: From the technology the developed countries are better than the developing countries in case of technology. An innovative entrepreneur uses the modern technology. But developing countries can not use digital technology. So in the developing countries need imitative entrepreneurs. 3. Discovery of Market: Discovery of market is easy for the developed countries. So the developed countries can expect innovative entrepreneurs. On the other hand, in the developing countries it is difficult to spread the market of product. So developing countries need imitative entrepreneurs. 4. New method of production: It is very difficult to make a new method of production for the developing countries. As innovative entrepreneurs adopt new methods of production. So developing countries need to choose the imitative ones to reduce the risk of loss. 5. Challenge: An innovating entrepreneur can take challenge. But the developing countries can not let the public in the face of the Black hole. That is why the imitative entrepreneurs are suitable for the developing countries.

Q-3 Discuss the qualities and functions of various types of entrepreneurship? Ans- Qualities of Successful Entrepreneur:
All entrepreneurs are not successful in undertaking an assignment. Only a few of them becomes successful entrepreneur. A successful entrepreneur is one who possesses the following characteristics i. ii. iii.
iv.

v.

He must have sound knowledge on the organization. He should be a man with administrative ability. He should be a man with administrative ability. Ability to secure operation and judge people. Ability to listen and social sensibility

Functions: Entrepreneur discharges a number of functions which are primarily discussed on the basis of the following headings. i. Entrepreneurial functions consisting of organization building, risk taking and innovation. ii. Promotional functions consisting of discovery of idea, detailed investigation; assembling of requirements and financing the proposition. iii. Managerial functions consisting of planning, organizing staffing, directing, coordinating and controlling. iv. Commercial functions representing production, finance marketing, accounting and personnel.

Q-4 What is small scale industry? Discuss the importance of small scale industries in the economic development of a country like India? Ans- Small Scale Industries may sound small but actually plays a very
important part in the overall growth of an economy. Small Scale Industries can be characterized by the unique feature of labor intensiveness. The total number of people employed in this industry has been calculated to be near about one crore and ninety lakhs in India, the main proponents of Small scale industries. In a developing country like India, the role and importance of smallscale industries is very significant towards poverty eradication, employment generation, rural development and creating regional balance in promotion and growth of various development activities. The following are some of the important role played by small- scale industries in India.

1. Employment generation:
The basic problem that is confronting the Indian economy is increasing pressure of population on the land and the need to create massive employment opportunities. This problem is solved to larger extent by small-scale industries because small- scale industries are labour intensive in character. They generate huge number of employment opportunities.

2. Mobilization of resources and entrepreneurial skill:

Small entrepreneurs also improve social welfare of a country by harnessing dormant, previously overlooked talent.

3. Equitable distribution of income:

Small entrepreneurs stimulate a redistribution of wealth, income and political power within societies in ways that are economically positive and without being politically disruptive.

4. Regional dispersal of industries:

People migrate from rural and semi urban areas to these highly developed centers in search of employment and sometimes to earn a better living which ultimately leads to many evil consequences of overcrowding, pollution, creation of slums, etc. This problem of Indian economy is better solved by small- scale industries

5. Provides opportunities for development of technology:

Small-scale industries have tremendous capacity to generate or absorb innovations. They provide ample opportunities for the development of technology and technology in return, creates an environment conducive to the development of small units.

6. Indigenisation:
Small-scale industries make better use of indigenous organizational and management capabilities by drawing on a pool of entrepreneurial talent that is limited in the early stages of economic development.

Q-5 Discuss the relation between small scale sector and large industry? Ans- The role of the small scale-sector is complementary to that of the
large -scale one. The indiscriminate promotion of small-scale sector is defined merely in terms of the size of the capital. It need not result in increased employment or the most efficient use of scarce resources, land and capital. On the other hand, very important factors like consumer interest, market linkage, the efficient use of resources and the need for innovation necessitate the continued growth of large-scale industries. Industrialization in most of the countries began with the small-scale sectors based on arts and crafts e.g. metal works, handlooms etc. It was very much after the Industrial Revolution in Europe that we began to have large-scale industries in sectors like textiles, engineering, steel etc. Education of our countrymen in the technologies of large-scale industries and the development of the market in India and the development of market in India for the products of such industries led to the establishment of large-scale industries. Because of the less demand on important resources like capital and land, small-scale sector prevents the concentration of economic power in certain section of society unlike large-scale industry. In terms of employment generation, large-scale industry can very often generate considerable employment of indirect employment which is not taken into account and cannot be matched by small-scale industry. Let us take an example, the organized sector of soap industry in India uses 160,000 tonnes of non-edible oil and produce 270,000 tonnes of an acceptable quality of soap which the consumer is willing to buy. It is estimated that through this over 100,000 people find employment, that too in rural areas. If the small-scale sector were to produce the same quantity and quality of soap, because it does not have the capital and technology, it will have to import material. Compared to this level of indirect employment, the direct employment in the soap industry is only 12,000 in large-scale and 38,000 in small-scale sector today. All these factors highlight the relation between small-sector and large-scale industries.

Q-6 What are different incentives available for small scale industries? Ans- Incentives that are available to small scale industry:
1.Land: Every states offer a plot for setting up of industries, the terms and condition may varies. Some states do not charge during initial state while some allow payment in installments. 2.Power: Electricity is offered at the concessional rate of 50% or exemption from the water charges for 5 years period. 3.Water: Water is supplied on a nonprofit ,no-loss basis or 50% concession. 4.Sales Tax: In all union territories industries are exempted from sales tax during a period of 5 year. 5.Raw Material: Units located in backward areas gets preferential treatment in the matter of allotment of scares raw materials like cement, iron and steel etc. 6.Finance: Loans are offered at a concessional rates, Subsidy of 10-15% is given for building capital assets

Q-7 Prepare a typical time schedule for starting a business? Ans- A good business plan covers a time frame that has a realistic start and
finish, with a number of measurable checkpoints in between. Typical business plans, tend to use one-year, three-year, or five year benchmarks. Business planning is an ongoing process. From year to year and sometimes more often than that. Example: Month 1: Complete business plan Month 2: Secure business loans Month 3: Begin search for retail space Month 5: Lease and develop retail space; begin hiring Month 7: Open shops; run holiday ads Month 8: Holiday shopping season begins Month 12: New stores become profitable

Q-8 Discuss the various measures that have been taken by the government promoting small scale industrial units in India? Are these measures adequate? Ans- Some of the measures that have been taken by the govt for
promoting SSI in India are: 1) National Bank of Agriculture and Rural Development(NABARD) NABARD was developed in 1982 to promote integrated rural development. It support small industries and offers counseling and consultancy services and also provide training and development programs for rural entrepreneurs. 2)The Rural small Business Development center(RSBDC) It works for the benefit of socially and economically disadvantaged individual and groups. It aims at providing management and technical support to rural entrepreneurs in rural areas. 3)National small industries corporation(NSIC)

Twin objective of NSIC are: i) sensitizing the small industries about the need for credit rating and ii) encouraging the SSI to maintain good financial trade record. 4)Small industries development bank of India(SIDBI) set up apex bank to provide direct/indirect financial assistance. to coordinate the function of other institutions in other way. 5)The National Sector(NCEUS) Commission For Enterprise in Unorganized

6)Rural And Women Entrepreneur Development(RWED) 7)World Association for Small and Medium Enterprise(WASME) 8)Scheme Of Funds For Regeneration of Traditional Industries(SFRTI)

Q-9 List of industries allowed under SSI? Ans- Basket cane (Procurement can also be made from State Forest
Corpn and State Handicrafts Corporation) Bathtubs Battery Charger Belt leather & strap Bolts & Nuts Brief Cases (other than moulded luggage) Buckets of all types Candle Wax Carriage Cane Valves/stock valves (for water fittings only) Cans metallic (for milk & measuring)