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MAHETAB KHAN
+919768974768
mahetabkhan1979@gmail.com
ENTREPRENEURSHIP MANAGEMENT FULL IDEAS AND NOTES
Q3: 1) Explainthe problem/difficultiesfacedbywomenentrepreneursin India.
2) Narrate the organizations which supportwomen entrepreneurs,enabling themto solve
their problemsand progress further.(2013)(2012) 20 marks
Answer: PROBLEMS OF WOMEN ENTREPRENEURS
The basic problem of a woman entrepreneur is that she is a woman.
1) Shortage of Finance: Women and small entrepreneurs always suffer from inadequate
fixed and working capital. Owing to lack of confidence in women’s ability, male members in
the family do not like to risk their capital in ventures run by women. Banks have also taken
negative attitude while lending to women entrepreneurs.
2) Shortage of Raw Material: Women entrepreneurs find it difficult to procure material
and other necessary inputs. The prices of many raw materials are quite high.
3) Inadequate Marketing Facilities: Most of the women entrepreneurs depend on
intermediaries for marketing their products. It is very difficult for the women entrepreneurs to
explore the market and to make their product popular. For women, market is a ‘chakravyuh’.
4) Keen Competition: Women entrepreneurs face tough competition from male
entrepreneurs and also from organized industries. They cannot afford to spend large sums of
advertisement.
5) Family Responsibilities: Management of family may be more complicated than the
management of the business. Hence she cannot put her full involvement in the business
.Occupational backgrounds of the family and education level of husband has a direct impact
on the development of women entrepreneurship.
6) Low Mobility: One of the biggest handicaps for women entrepreneur is her inability to
travel from one place to another for business purposes. A single women asking for room is
looked upon with suspicion. Sometimes licensing authorities, labour officials and sales tax
officials may harass them.
7) Lack of Education: About 60% of women are still illiterate in India. There exists a
belief that investing in woman’s education is a liability, not an asset. Lack of knowledge and
experience creates further problems in the setting up and operation of business.
8) Low Capacity to Bear Risks: Women lead a protected life dominated by the family
members. She is not economically independent. She may not have confidence to bear the risk
alone. If she cannot bear risks, she can never be an entrepreneur.
9) Social Attitudes: Women do not get equal treatment in a male dominated society.
Wherever she goes, she faces discrimination. The male ego stands in the way of success of
women entrepreneurs. Thus, the rigid social attitudes prevent a woman from becoming a
successful entrepreneur.
10) Low Needfor Achievement: Generally, a woman will not have strong need for
achievement. Every women suffers from the painful feeling that she is forced to depend on
others in her life. Her pre-conceived notions about her role in life inhibit achievement and
independence.
11) Lack of Training: A women entrepreneur from middle class starts her first
entrepreneurial venture in her late thirties or early forties due to her commitments towards
children. Her biggest problem is the lack of sufficient business training.
12) Lack of Information: Women entrepreneurs sometimes are not aware of technological
developments and other information on subsidies and concessions available to them. They
may not know how to get loans, industrial estates, raw materials etc.
MEASURES TAKEN FOR THE DEVELOPMENT OF WOMEN
ENTREPRENEURSHIP IN INDIA
Women empowerment should be one of the primary goals of a society. Women should be
given equality, right of decision-making and entitlements in terms of dignity. They should
attain economic independence. The most important step to achieve women empowerment is
to create awareness among women themselves. Development of women can be achieved
through health, education and economic independence. Realizing the importance of women
entrepreneurs, Govt. of India has taken a number of measures to assist them. Some of the
important measures are outlined as follows
The followings are some of associations or institutions which have playedpivotalrole for growth
and development of women entrepreneurs:
1. SIDBI.
SIDBI stands for Small Industries Development Bank of India. It is a national levelinstitution
which extends facilitiesfor growth of small scale industries. This organization has introducedtwo
special schemes for small scale industries by women. These are:
 MAHILA UDYAMNIDHI
 MAHILA VIKASHNIDHI
These two special schemesfor women entrepreneurs provide equity and developmental
assistance to women entrepreneurs.
These organizations provide financial assistance to women to start entrepreneurialwork in the
field of spinning, weaving, knitting, embroidery and block printing. Besides the above schemes,
SIDBI has launched the following schemesto provide assistance to women entrepreneurs:
 Micro Credit Scheme
 Women Entrepreneurial Development Programme
 Marketing Development Fund for Women.
2. SIDO.
SIDO STANDS FOR Small IndustriesDevelopment Organization. The primary objective of this
organization is to conduct variousprogrammesincluding Entrepreneurship Development
programme for women.
Thisorganization has introducedvariousdevelopment programmes in the areas of TV repairing,
leather goods, screen printing and preparation of circuit boards.
3. CWEI.
Stands for consortiumof women entrepreneursof India. It is a voluntary organization consisting
of NGOs. SHGs variousvoluntary organizationsand individual business enterprises.
It was formed in the year 2001 with the basis objective of providingtechnologicalup gradation
facilitiesto women entrepreneurs. Besides extending technologicalup gradation facilities, it
facilitatesin the sphere of marketing and export support.
4. WIT.
WIT denotesWomen India Trust. The promoter called Kamila Tyabji hastaken initiative for
establishment of this trust in 1968. The soul objective of thistrust is to help women
entrepreneurs.
With the establishment of Kamila Trust in U.K., it has facilitatedits members to market their
product in London. It has also extendedexport support to the countrieslike Australia, Europe
and Germany.
5. SEWA.
SEWA stands for Self EmployedWomen Association. It is a trade union of women which was
registeredunder Trade UnionAct, in 1972. The primary objective of thisorganization is to
empower women entrepreneursin rural sector.
Most of members of this organization are originated fromunorganized sector. At present SEWA
has shifted its operationsfrom rural areas or levelto global leveland receive substantialgrant
from international organizations like Ford Foundation and UNICEF.
6. SHGs.
SHGs denotes Self Help Groups. It is regardedas an association consisting of small group of self
employedwomen entrepreneurs. The women entrepreneursmay be either fromrural or urban
areas.
The primary objective of SHG is to take care as welfare of its associated members. It provides
financial assistance as welfare of its members through financial institutions and non-government
organizations.
7. FIWE.
FIWE STANDS FOR Federation of India Women Entrepreneurs. It came into existence in the
year 1993 on the outcome of resolution in 7thInternational conference of women entrepreneurs.
It has helped women entrepreneursin diversifiedactivitiesthroughinteractionwith v arious
women organizations and associations.
8. NABARD.
NABARDstands for National Bank for Agriculture and Rural Development. It is an autonomous
organization. The primary objective of this autonomous organisation is to provide liberal credit
facilitiesto women entrepreneurs. The followings are some of essential characteristicsof
NABARDon liberal credit to women entrepreneurs.
1. It launched the project in 12992 to provide finance to SHG.
2. It providesfacilitieson resourcesand training in NGO Formation.
3. It arranges training to bank officialonformation of SHG.
4. It providesrefinance to bank against lending to SHG.
5) INSTITUTIONS AND VOLUNTARY ASSOCIATION: Several voluntary agencies
like FICCI Ladies Organization (FLO), National Alliance of Young Entrepreneurs
(NAYE)
and others assist women entrepreneurs.
NAYE has been a leading institution engaged in the promotion and development of
entrepreneurship among women. It convened a conference of women entrepreneurs in
November
1975. It assists the women entrepreneurs in:
(a) Getting better access to capital, infrastructure and markets.
(b) Identifying investment opportunities.
(c) Developing managerial and productive capabilities.
(d) Attending to problems by taking up individual cases with appropriate authorities.
(e) Sponsoring participation in trade fairs, exhibitions, special conference etc.
NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) : The H.P. scheme of
NSIC provides preferential treatment to women entrepreneurs. It also conducts
Entrepreneurs and Enterprise Building programmes for women.
INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) : The schemes of IDBI for
women entrepreneurs are summarized as follows:
PROMOTER’S CONTRIBUTION: The IDBI set up the Mahila Udyan Nidhi (MUN) and
Mahila Vikas Nidhi (MVN) schemes to help women entrepreneurs. IDBI conduct
programmes of training and extension services through designated approved agencies and
association with other development agencies like EDII, TCOs, KVIC etc.
COMMERCIAL BANKS: The “Sthree Shakthi Package Scheme” of SBI provides a
package of assistance to women entrepreneurs. The consultancy wings of SBI give guidance
on project identification and project viability. The program of assistance such as repair and
servicing, photo copying, dry cleaning, retail trade business enterprises, poultry farming,
tailoring etc. The Bank Of India has introduced a scheme known as ‘ Priyadarshini
Yojana’ to help women entrepreneurs.
KUDUMBASREE UNITS: With the objectives of poverty eradication and women
empowerment Kudumbasree has been introduced in Kerala. The poor women are organised
into community- based organisations. They start and operate micro enterprise. They earn
income through self-employment.
Q) why is intrapreneurship given so much importance now a
days?. how it can be developed deliberately within the
organisation? what are its main challenges.?(2014)(2012)
answer)
DEFINITIONOF 'INTRAPRENEURSHIP:
Acting like an entrepreneur within a larger organization. The term is derived
from a combination of "intra" or internal, and "entrepreneurship." Intraprenuers
are usually highly self-motivated, proactive and action-oriented people who
are comfortable with taking the initiative, even within the boundaries of an
organization, in pursuit of an innovative product or service.
INTRAPRENEURSHIP:-
Behavioral characteristics of intrapreneurship include initiative, an ability to
"think outside the box", risk-taking and leadership - all traits that are also
possessed by successful entrepreneurs. The major difference between
entrepreneurs and intrapreneurs is that the fruits of success default to the
organization rather than to the intrapreneur. On the other hand, the
intrapreneur also has the comfort of knowing that failure will not have a
personal cost - as it would for an entrepreneur - since the organization would
absorb losses arising from failure.
development of intrapreneurs within organization.
For leaders, encouraging people to think like entrepreneurs is key to maintaining a
competitive edge. This tool lists ways to help people in your organization think creatively
and become in-house entrepreneurs - or "intrapreneurs."
1. Drive out fear of failure. Fear is the innovation killer.
2. Organize teams of coworkers to track the competition and have each team focus on one
product or service niche. Hold quarterly update meetings for all teams.
3. Hire a strategy consulting specialist to track competitive trends on a regular basis. Ask
him or her to present findings in a completely unvarnished fashion. Tell him that his role is to
make people work hard day-in, day-out.
4. Consistently ask people: "What additional products does our company need?"?"
5. Send your staff to trade fairs and exhibits and create a regular brainstorming session
where people will report the high points of the trade fair. Make sure that each department
has their own representatives present.
6. Create a team of inter-departmental "imagineers. Challenge them to come up with new
ideas and innovations on company products.
7. Put a suggestion or comment box on your site or in your newsletter. Offer an all expense
paid trip as an incentive for the best and most unique idea.
8. Develop employee interaction via brainstorming sessions, ask them the things they think
the company does well. Encourage employees to do it again and again.
9. Invite employees to speak up on everything they believe the organization is not doing well.
Ask for suggestions on how they would change it. Work on the most productive suggestions
right away.
10. Set goals and quality standards on achieving the latest cutting-edge innovation. E.g.
utilize the higher potential of your management team by having them create one new thing
that adds value to the organization every month.
11. Develop an internal business venture planning department where employees are
encouraged to submit plans and ideas.
12. Provide incentives for the most productive employees.
13. Implement a company wide incentive program for new and innovative ideas.
14. Emphasize the importance of innovation in hiring policies.
15. Encourage departments to engage in scenario planning. Make sure they answer the
question: "What would we do if our two largest competitors merged..."
16. Be a vigilant when it comes to the latest research and development technologies.
17. Create a program so that staff can rotate through internal departments and learn about
life in other parts of the company.
18. Create an intern program to groom untapped talent from local universities. Your
employees work there for three months, their students work at your company.
19. Host a strategy meeting off hours committed to innovation. Meet in a room where there
are no chairs, ask people to decorate the room.
20. Praise the positive developments!
21. Let it be known that a sense of humor, fun, and play is welcome. Create a fun
environment for people to work in.
22. Print out innovative ideas in your company newsletters.
23. Communicate with a financial expert. Tell them you're interested in acquiring a company
that's as entrepreneurial as yours in the same market as yours. If nothing is achievable, wait
6 months. Repeat the process.
24. Start a regular training session in creative thinking.
25. Tell people it's okay to fail. Then tell them again.
26. Institute a special holiday program for your team.
27. Start out an annual internal innovation exhibit.
28. Identify inventors in the community with whom your company would like to form a
relationship. Set up an innovator relations team.
29. Hold a party where people come dressed up like their favorite inventors. Give gifts.
Q) short note:
1) working capital management.
Nature of WorkingCapital
Workingcapital managementisconcerned withthe problemsthatarise inattemptingtomanage the
currentassets,the currentliabilitiesandthe interrelationsthatexistbetweenthem
Current assets refertothose assets whichinthe ordinarycourse of businesscanbe,orwill be,
convertedintocashwithinone yearwithoutundergoingadiminutioninvalue andwithout
disruptingthe operationsof the firm.Examples- cash,marketablesecurities,accountsreceivableand
inventory.
Current liabilities are those liabilitieswhichare intended,attheirinception,tobe paidinthe
ordinarycourse of business,withinayear,outof the current assetsorthe earningsof the concern.
Examples- accountspayable,billspayable,bankoverdraftandoutstandingexpenses
Objective ofWorkingCapital Management
The goal of workingcapital managementistomanage the firm’scurrentassetsandliabilitiesinsuch
a way that a satisfactorylevel of workingcapital ismaintained
The interactionbetweencurrentassetsandcurrentliabilitiesis,thereforethe maintheme of the
theoryof the workingcapital management.
Conceptsand DefinitionsofWorking Capital
There are twoconceptsof workingcapital:Gross andNet.
Gross workingcapital- meansthe total currentassets
Networkingcapital- canbe definedintwoways-oThe difference betweencurrentassetsand
currentliabilities. The portionof currentassetswhichisfinancedwithlongtermfunds.
The Operating-cycle andWorking Capital Needs
The workingcapital requirementsof afirmdepends,toa great extentuponthe operatingcycle of
the firm.The operatingcycle maybe definedasthe time durationstartingfromthe procurementof
goodsor raw materialsandendingwiththe salesrealization.
The lengthandnature of the operatingcycle maydifferfromone firmtoanotherdependingupon
the size and nature of the firm.
The operatingcycle of a firmconsistsof the time requiredforthe completionof the chronological
sequence of some orall of the following-
 Procurementof rawmaterialsandservices.
 Conversionof rawmaterialsintowork-in-progress.
 Conversionof work-in-progressintofinishedgoods.
 Sale of finishedgoods.
 Conversionof receivablesintocash.
Determinantsof Workingcapital Requirement
 General nature of business
 Productioncycle
 Businesscycle fluctuations
 Productionpolicy
 Creditpolicy
 Growth andexpansion
 Profitlevel
 Level of taxes
 Dividendpolicy
 Depreciationpolicy
 Price level changes
 Operatingefficiency
Workingcapital: Policy and Management
managementincludesandreferstothe proceduresandpoliciesrequiredto
manage the workingcapital.There are three typesof workingcapital policieswhichafirmmay
adopti.e.
erate workingcapital policy
These policiesdescribethe relationshipbetween
the saleslevel andthe levelof currentassets.
LiquidityversusProfitability-
A Risk- ReturnTrade-off Animportantaspectof a workingcapital policyistomaintainandprovide
sufficientliquiditytothe firm.The decisiononhow muchworkingcapital be maintainedinvolvesa
trade-off i.e.,havingalarge networkingcapital mayreduce the liquidity-riskfacedbythe firm, butit
can have a negative effectonthe cashflows.Therefore,the neteffectonthe value of the firm
shouldbe usedtodetermine the optimal amountof workingcapital.
Types ofworking capital needs
furcatedintopermanentworkingcapital andtemporary
workingcapital.
- There isalwaysaminimumlevelof workingcapital whichis
continuouslyrequiredbya firminorderto maintainitsactivitieslike cash,stockandothercurrent
assetsinorderto meetitsbusinessrequirementsirrespectiveof the levelof operations
. - Overandabove the permanentworkingcapital,the firmmayalso
require additional workingcapital inordertomeetthe requirementsarisingoutof fluctuationsin
salesvolume.Thisextraworkingcapital neededtosupportthe increasedvolume of salesisknown
as temporaryor fluctuatingworkingcapital.
Q) Short note on:
1) People Management:
Your employees are the biggestassetyou have. Their performance and attitude can resultin the success or
failure of your business.The mostdifficultpart of any manager's job is people management.He or she is
required to lead,motivate, train, inspire,and encourage.On the other hand,he or she is also responsible for
hiring,firing, disciplining,training and evaluating.These functions seem to be at odds,but a successful manager
can integrate both the positive and negative aspects ofthese tasks to create a positive,productive work force.
People management,also known as human resource management(HRM),encompasses the tasks of
recruitment,management,and providing ongoing supportand direction for the employees ofan organization.
These tasks can include the following:compensation,hiring,performance management,organization
development,safety, wellness,benefits,employee motivation,communication,administration,and training.
When managing the people within an organization,a manager mustfocus on both hiring the right people and
then getting the mostoutof these people.New personnel mustprovide the organization with the besttalent
available that meets the needs of the business.The organization mustlook ahead to how a new employee can
be used to their fullest.Getting the mostout of an employee means a business has consistent policies and
practices in place to provide its people with appropriate training and development.Employees are involved as
"partners"in the business.
Probably the mostimportanttask a manager will face when dealing with the people under his direction is that of
bringing outthe bestin them.Unlocking people potential is often seen as the key to any business's success.
When an employee's talents are notchanneled correctly, their behavior can seriouslycompromise the success of
an organization.Some of the roles that an employee who is not being used to his potential can take on are as
follows:procrastinator,martyr,gossip,manipulator,backstabber,narcissist,a deer in the headlights,black hole,
stonewalled,curmudgeon,bully,and predator.
Instead of dealing with employees thatdevelop defense mechanisms to mask their dissatisfaction with their work
situation,let's look as some ways to encourage effective behavior at work. After a problem behavior has been
identified,address the employee immediately.Discuss taking responsibilityfor the ineffective behavior, how the
behavior manifests itself,and the effect the behavior is having on the organization.Next, give the employee
alternatives to his currentbehavior. In other words,teach him or her how the principles ofachievement:
* cooperation * respect* self-motivation * trust* self-discipline
Now that the employee has alternatives to their currentbehavior, draw up a performance improvementcontractin
which he or she agrees to specific actions to change his or her ineffective behavior. After the contract is signed,a
manager needs to stayinvolved and committed to the process ofchange.He or she cannotassume thatthe
problem will be automaticallyfixed now that it has been broughtto light.The employee will require praise and
reinforcementofany progress thatthey are able to make.If positive change is to occur, it will be evident soon
after the initial confrontation.If this does not occur, a termination meeting mustbe scheduled quickly.One
employee's toxic behavior can quickly spread throughoutan organization ifit is not dealtwith quickly and
efficiently.
When evaluating an organization's workforce,there are several areas thatmustbe addressed.First,the staff
musthave the tools and resources thatthey need to do their jobs effectively. Employees cannotbe blamed for an
organization's inefficiencyif they are not provided with the equipmentnecessaryto perform adequately.Next, get
to know each employee as an individual and make sure that they are aware of their specific role within the
organization.Clarify their responsibilities and goals.Also,involve each employee in making decisions which
affect their area of expertise.This will resultin the employee feeling thatthey "have a say" in what goes on in the
organization and he or she will feel a sense ofownership.Finally,make sure thatemployees have an opportunity
to have fun with their coworkers at appropriate times.
People Empowermentcan be a very effective tool within the field of people management.This technique can be
used to involve employees in any improvementprogram within an organization.Authority, accountability,and
responsibilityare delegated to the employees for improving the processes which are under their control without
first having to obtain permission from managementbefore making changes.This can be successful onlywhen
employees are recognized,congratulated,and rewarded for their commitmentto problem solving.
Q) what is meant by franchising. why is it said to be a gift of the 20th century
to the world of business. also discuss the merits and demerits of franchising
as a quick start route to business.
Q)Franchising as a source of Entrepreneurship.
Answer. Franchising is a business model in which many different owners share a single
brand name. A parent company allows entrepreneurs to use the company's strategies and
trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues.
The parent company also provides the franchisee with support, including advertising and
training, as part of the franchising agreement.
Types of franchising model
1. Manufacturer Franchise Structure
o One of the lesser-known franchise structures is called a manufacturer
franchise. The focus of this type of franchise, as the name suggests, is on the
manufacturing phase of a product's lifecycle. Owners of a manufacturer
franchise have the right to manufacture a franchisor's product. In some cases,
he also may have the right to sell and distribute the products as well.
2.ProductFranchise Structure
o Those who buy into a business structured as a product franchise are
purchasing the right to sell and/or distribute a particular product from a
manufacturer. For example, an auto repair shop owner may decide that he
wants to sell tires in order to add a revenue stream for the business. In order to
have inventory on hand, selected tire manufacturers may require that the auto
shop become a product franchisee before it allows the shop to carry its tires.
3.Business FormatFranchise Structure
o The most common type of franchise structure is the business format franchise.
In this type of franchise, the franchisee is buying the right to more than just
producing and distributing a franchisor's product as in the manufacturer type
of franchise, and more than simply selling a franchisor's product as in the
product type of franchise. Instead, entrepreneurs who choose the franchise
business format are really purchasing the franchisor's strategic business
operation model, which has proven to be effective; and the right to produce,
distribute and/or sell the franchisor's goods and/or services comes along with
that purchase.
4.Single-Unit Franchise Ownership
o As stated earlier, types of franchises are categorized not only by the structure
but also by ownership. The most common type of franchise ownership is one
that is offered as a single-unit franchise. This type of franchisee purchases the
right to own and operate one franchise location. Most entrepreneurs who
invest in a franchise---whether as a business format franchisee, a product
franchisee or a manufacturer franchisee---buy into the franchise as this type of
franchise owner.
5.Multi-Unit & Area Development Franchise Ownership
o Aggressive or experienced franchisees may opt for a more involved type of
franchise ownership such as multi-unit franchise ownership or area
development franchise ownership. The two types of franchise ownership types
are similar in that the franchise owner has more to manage than a single-unit
franchise owner and they differ only in how and what is managed. The multi-
unit franchise owner manages multiple franchise locations while the area
development franchise owner typically owns a single franchise that has the
right to do business across a vast area---multiple cities or states, for instance.
The franchising business model is used across manyindustries,butit is mostpopular in the fastfood
restaurants,hotel,and casual & upscale restaurants industries.
 McDonald's (MCD) operates the world's largest fast food chain, and earns 37% of its revenue from
franchising[2]
across its approximate 31,400 restaurant locations. [3]
Franchisees operate 65% of McDonald's
restaurants worldwide.[3]
 Yum! Brands (YUM) runs over 35,000 locations of its A&W, KFC, Pizza Hut, Taco Bell, and Long John
Silvers restaurant chains worldwide.[4]
The company franchises 72% of its restaurants[5]
which accounted for
12.6% of the company's revenue in 2007.[5]
 Burger King Holdings (BKC) operates 11,000 restaurants of its fast food Burger King chain worldwide[6]
and
earned $2.3 billion in revenue in 2007.[7] Franchisees operate 88.5% of Burger King locations, which account
for 22% of the company's revenue.[7]
 Intercontinental Hotels Group (IHG) operates hotels and resorts under the InterContinental, Crowne Plaza,
Hotel Indigo, Holiday Inn, Holiday Inn Express, Candlewood Suites, and Staybridge Suites brand names.
The companyfranchises 76% ofits hotels[8]
, which accounted for 33% of the company's revenue in 2007 .[9]
 Starwood Hotels & Resorts Worldwide (HOT) operates luxury hotels under the St. Regis, Luxury Collection,
W, Westin, Le Meridien, Sheraton, Four Points, Aloft, and Element brand names. Approximately 44% of the
company's hotels are operated by franchisees[10]
. Approximately 44% of the company's 2007 revenue was
earned through franchising operations.[11]
Advantages of the Franchising Model
 Franchisees require less initial capital than independently starting a company and can use proven successful
strategies and trademarks.
 Franchisees are provided with significantamounts oftraining,notcommon to mostentrepreneurs.
 1) Franchising makes the task of getting started easier because the franchisee gets a business
format already market tested and found to work. Hence buying a franchise is so far safer than
tryingto start a newbusiness.
 2) It reduces chances for failure. Here significant to mention is that less than 10 percent of all
franchise fails. In dramatic contrast with this is the fact that two out of every five entrepreneurs
whostart on theirownfail withinthree yearsandeightoutof everytenfail withintenyears.
 4) Franchising may increase the franchisee’s purchasing power also. Because, being part of a
large and that too recognized organization means paying less for a variety of things such as
supplies equipment, inventory, services, insurance and so on. It also can mean getting better
service from suppliers because of the importance of the organization (franchise) of you is part
franchisee).
 5) One getsthe benefitof the franchiser’sresearchanddevelopmentinimprovingthe product.
 7) The prospectsof obtainingloanfacilitiesfromthe bankare alsoimproved.
 8) The banking of a known trading name (franchiser) becomes quite helpful while negotiating for
goodsiteswithsettingagentsorbuildingowners.
Advantages from a Franchisee’s point of view:
1. Avoiding the unnecessary trial and error period in starting and operating a new business.
2. Lower financial risk, compared to other ventures, because investment costs are lower and profit
margins are higher.
3. Business Format Franchising complete packages ensure a ready to go “turn-key” franchised
unit.
4. Managing a small business whilst depending on the power of the franchisor company which has
a bigger organization.
5. The franchisee has an opportunity to run a proven business concept with a successful
operational track record.
6. The opportunity to learn the latest developments and changes in the local and global market
from the franchisor and focus entirely on developing the sales revenues.
7. The benefit of operating under a recognized trade name/trademark, which can have better
marketing results.
8. The franchisee has access to accumulated business experience and technical know-how in
managing the business.
9. A unified store design which leverages the business reputation in marketing the concept.
10. Easier purchasing, storing, and product display systems.
 Drawbacks of the Franchising Model
Disadvantages from a Franchisee’s pint of view:
1. The requirement to pay the franchise fees and royalty to the franchisor, which in some cases can
be exaggerated.
2. The transfer of all goodwill built in the local market to the franchisor upon expiration or
termination of the franchise contract.
3. The necessity of abiding by the franchisor’s operating systems, standards, policies and
procedures.
4. Reduced corporate profit margin due to payment of royalties and levies.
5. Unlike entrepreneurs who start their own business, the franchisees find no room or scope for
enjoying their creativity. They have to work as per the given format. One classic example of
regimentation in franchising can be found in the Mc Donald’s restaurant organization. A Mc
Donald’s franchise is given very little operational latitude, indeed the operations manual attends
to such minor details as when to boil the bearings on the potato slicer. The purpose of these
restrictions is not to frustrate the franchises, but to ensure that each outlet is run in a uniform
correct manner.
6. A number of restrictions are also imposed upon the franchisees. Restrictions may relate to
remain confined to product line or a particular geographical location only
7. Franchisees usually do not have the right to sell their business to the highest bidder or to leave
it to a member of their family without approval from the franchiser.
8.Franchising stores reduces the amount of control that the parent company has over its products
and service, which may lead store quality to vary greatly from store to store.
9.Franchisees must pay a percentage of their revenues to the parent company, reducing their overall
earnings
10. The franchisee may become subject to fail with the failure of the franchiser, another disadvantage
facing franchisees is that franchisers generally reserve the option to buy back an outlet upon
termination of the contract. Many franchisees become vulnerable to this option. As such, they operate
under the constant fear of non- renewal of the franchise agreements.
High Potential for Growth Through International Franchising in Emerging
Markets
Unlike the United States and many other Western countries, emerging markets are commercially underdeveloped
and have significant growth opportunities. For example, the U.S. Department of Commerce estimated that over
75% of the expected growth in world trade over the next 20 years will come from developing countries, primarily
large emerging markets like China.[33]
Furthermore, the rise of China's middle class, as well as India's booming
per capita income provide significant new markets for franchises to operate. China's middle class is expected to
almost double in the next two years, reaching 25% of the Chinese population in 2010, which is spurred by
China's 700% growth in per capita income since the late 1980s.[34]
Furthermore, the Indian per capita income is
expected to increase more than 300% by 2025.[35]
As the wealth of consumers in emerging markets grows, so too will their appetites for consumer goods, as
evidenced by India's 1,440% growth in its retail industry between 1991 and 2007.[36]
Also, as of 2007, India's
franchising industry is expected to grow 30% annually as mega-franchising chains like Yum! Brands (YUM) have
already established a presence in India.[37]
High levels of consumer demand, coupled with relatively low levels of
competition, offer a lucrative opportunity for many franchisors to expand into emerging markets. Expansion via
franchising is an attractive option for companies looking to expand abroad without incurring high costs.
Additionally, international franchisees already possess many inherent qualities needed to succeed abroad, like
the ability to speak the native language.
Q)what are the various sources of financing the new venture. what are
their pros and cons.
answer. Introduction
Often the hardest part of starting a business is raising the money to get going. The
entrepreneur might have a great idea and clear idea of how to turn it into a successful
business. However, if sufficient finance can’t be raised, it is unlikely that the business
will get off the ground.
Raising finance for start-up requires careful planning. The entrepreneur needs to
decide:
 How much finance is required?
 When and how long the finance is needed for?
 What security (if any) can be provided?
 Whether the entrepreneur is prepared to give up some control (ownership) of the
start-up in return for investment?
The finance needs of a start-up should take account of these key areas:
 Set-up costs (the costs that are incurred before the business starts to trade)
 Starting investment in capacity (the fixed assets that the business needs before it
can begin to trade)
 Working capital (the stocks needed by the business –e.g. r raw materials +
allowance for amounts that will be owed by customers once sales begin)
 Growth and development (e.g. extra investment in capacity)
One way of categorising the sources of finance for a start-up is to divide them into
sources which are from within the business (internal) and from outside providers
(external).
Internal sources
The main internal sources of finance for a start-up are as follows:
Personal sources
As mentioned earlier, most start-ups make use of the personal financial arrangements
of the founder. This can be personal savings or other cash balances that have been
accumulated. It can be personal debt facilities which are made available to the
business. It can also simply be the found working for nothing! The following notes
explain these in a little more detail.
Savings and other “nest-eggs” An entrepreneur will often invest personal cash balances
into a start-up. This is a cheap form of finance and it is readily available. Often the
decision to start a business is prompted by a change in the personal circumstances of
the entrepreneur – e.g. redundancy or an inheritance. Investing personal savings
maximises the control the entrepreneur keeps over the business. It is also a strong
signal of commitment to outside investors or providers of finance. Re-mortgaging is the
most popular way of raising loan-related capital for a start-up. The way this works is
simple. The entrepreneur takes out a second or larger mortgage on a private property
and then invests some or all of this money into the business. The use of mortgaging
like this provides access to relatively low-cost finance, although the risk is that, if the
business fails, then the property will be lost too. .
Borrowing from friends and family This is also common. Friends and family who are
supportive of the business idea provide money either directly to the entrepreneur or
into the business. This can be quicker and cheaper to arrange (certainly compared with
a standard bank loan) and the interest and repayment terms may be more flexible than
a bank loan. However, borrowing in this way can add to the stress faced by an
entrepreneur, particularly if the business gets into difficulties.
Credit cards This is a surprisingly popular way of financing a start-up. In fact, the use
of credit cards is the most common source of finance amongst small businesses. It
works like this. Each month, the entrepreneur pays for various business-related
expenses on a credit card. 15 days later the credit card statement is sent in the post
and the balance is paid by the business within the credit-free period. The effect is that
the business gets access to a free credit period of aroudn30-45 days!
Retained profits This is the cash that is generated by the business when it trades
profitably – another important source of finance for any business, large or small. Note
that retained profits can generate cash the moment trading has begun. For example, a
start-up sells the first batch of stock for £5,000 cash which it had bought for
£2,000. That means that retained profits are £3,000 which can be used to finance
further expansion or to pay for other trading costs and expenses.
Share capital – invested by the founder The founding entrepreneur (/s) may decide to
invest in the share capital of a company, founded for the purpose of forming the start-
up. This is a common method of financing a start-up. The founder provides all the
share capital of the company, retaining 100% control over the business.
The advantages of investing in share capital are covered in the section on business
structure. The key point to note here is that the entrepreneur may be using a variety of
personal sources to invest in the shares. Once the investment has been made, it is the
company that owns the money provided. The shareholder obtains a return on this
investment through dividends (payments out of profits) and/or the value of the
business when it is eventually sold.
A start-up company can also raise finance by selling shares to external investors – this
is covered further below.
External sources
Loan capital This can take several forms, but the most common are a bank loan or bank
overdraft.
A bank loan provides a longer-term kind of finance for a start-up, with the bank stating
the fixed period over which the loan is provided (e.g. 5 years), the rate of interest and
the timing and amount of repayments. The bank will usually require that the start-up
provide some security for the loan, although this security normally comes in the form of
personal guarantees provided by the entrepreneur. Bank loans are good for financing
investment in fixed assets and are generally at a lower rate of interest that a bank
overdraft. However, they don’t provide much flexibility.
A bank overdraft is a more short-term kind of finance which is also widely used by
start-ups and small businesses. An overdraft is really a loan facility – the bank lets the
business “owe it money” when the bank balance goes below zero, in return for charging
a high rate of interest. As a result, an overdraft is a flexible source of finance, in the
sense that it is only used when needed. Bank overdrafts are excellent for helping a
business handle seasonal fluctuations in cash flow or when the business runs into
short-term cash flow problems (e.g. a major customer fails to pay on time). Two further
loan-related sources of finance are worth knowing about:
Share capital – outside investors For a start-up, the main source of outside (external)
investor in the share capital of a company is friends and family of the
entrepreneur. Opinions differ on whether friends and family should be encouraged to
invest in a start-up company. They may be prepared to invest substantial amounts for a
longer period of time; they may not want to get too involved in the day-to-day
operation of the business. Both of these are positives for the entrepreneur. However,
there are pitfalls. Almost inevitably, tensions develop with family and friends as fellow
shareholders.
Business angels are the other main kind of external investor in a start-up
company. Business angels are professional investors who typically invest £10k -
£750k. They prefer to invest in businesses with high growth prospects. Angels tend to
have made their money by setting up and selling their own business – in other words
they have proven entrepreneurial expertise. In addition to their money, Angels often
make their own skills, experience and contacts available to the company. Getting the
backing of an Angel can be a significant advantage to a start-up, although the
entrepreneur needs to accept a loss of control over the business.
You will also see Venture Capital mentioned as a source of finance for start-ups. You
need to be careful here. Venture capital is a specific kind of share investment that is
made by funds managed by professional investors. Venture capitalists rarely invest in
genuine start-ups or small businesses (their minimum investment is usually over £1m,
often much more). They prefer to invest in businesses which have established
themselves. Another term you may here is “private equity” – this is just another term
for venture capital.
A start-up is much more likely to receive investment from a business angel than a
venture capitalist.
Crowd-funding
Sometimes, there really is wisdom in crowds, especially if you are looking to start a
new business. Crowdfunding on websites like Kickstarter, Indiegogo and others that
are geared more toward businesses can give a big boost to the financing aspirations
of small businesses. These sites allow businesses to pool small investments from a
number of investors instead of forcing companies to look for a single investment. The
Jumpstart Our Business Startups (JOBS) Act has been instrumental in popularizing
this form of financing in recent years.
Crowdfunding has many advantages, perhaps the biggest of which is that
businesses are able to raise money without giving up an equity stake in their
business.
Trade credit
Trade credit is the lifeblood of most established businesses. It works very simply. When you buy
parts from a supplier, the supplier delivers those parts with an invoice for the amount due. Because
you have an established relationship with the supplier, he doesn't ask you for cash on delivery (COD).
Instead, you have a period of time to pay him back without incurring any interest or penalties. That's
called trade credit.
Trade credit is based on trust. As a new business, you're at a disadvantage, because you don't have
an established track record of paying invoices on time. If you want to win the confidence of suppliers,
you'll need to present them with the same credentials you might give a bank: a business plan,
collateral, financial statements and other proof that you have your act together [source: Entrepreneur].
One of the greatest advantages of trade credit is that it's interest-free for a fixed period of time,
perhaps 30 or 60 days. Even better, some businesses offer discounts if you pay the invoice within a
very short period of time, maybe a week or 10 days. As a new business, it might take a lot of legwork
and a little luck to secure trade credit, but it's worth it.
Discounting Bills ofExchange
This method is widely used by companies for raising short-term finance. When the goods are
sold on credit, bills ofexchange are generally drawn for acceptance by the buyers ofgoods.
Instead ofholding the bills till the date ofmaturity,companies can discount them with
commercial banks on payment ofa charge known as bank discount. The rate ofdiscount to be
charged by banks is prescribed by the Reserve Bank of India from time to time. The amount of
discount is deducted from the value ofbills at the time ofdiscounting. The costof raising
finance by this method is the discountcharged by the bank.
Issue ofShares
It is the most importantmethod. The liability ofshareholders is limited to the face value of
shares, and they are also easily transferable. A private company cannot invite the general public
to subscribefor its share capital and its shares are also not freely transferable. But for public
limited companies there are no such restrictions.There are two types ofshares :-
 Equity shares:the rate ofdividend on theseshares depends on the profitsavailable and the
discretion ofdirectors. Hence, there is no fixed burden on the company. Each share carries
one vote.
 Preferenceshares:dividend is payable on these shares at a fixed rate and is payable only if
there are profits. Hence, there is no compulsory burden on the company's finances. Such
shares do not give voting rights.
 Issue ofDebentures
 Companies generally have powers to borrow and raise loans by issuing debentures. The rate of
interest payable on debentures is fixed at the time ofissue and the debentures have a charge
on the property orassets ofthe company, which provide the necessary security.The company
is liable to pay interest even ifthere are no profits. Debentures are mostly issued to finance
the long-term requirements ofbusiness and do not carry any voting rights.
Public Deposits
Companies often raise funds by inviting theirshareholders, employees and the general public
to deposit their savings with the company.The Companies Act permits such deposits to be
received for a period up to 3 years at a time. Public deposits can be raised by companies to meet
their medium-term as well as short-term financial needs.The increasing popularity ofpublic
deposits is due to:
 The rate ofinterest the companies have to pay on them is attractive.
 These are easier methods ofmobilising funds than banks, especially during periods ofcredit
squeeze
 They are unsecured
Social Lending
The Internet has added an interesting new wrinkle to the world of new business financing. On so-
called social lending Web sites, individuals can apply for loans from other individuals. The two
parties set their terms and the Web site acts as the intermediary.
One of the more popular social lending sites is called Prosper.com. The site is designed around the
auction model popularized by eBay. As a borrower, you register at the Web site and post a loan
request for a fixed amount of money at a maximum interest rate. Interested lenders then bid on your
loan. When you find a lender that offers an attractive interest rate, you proceed with the loan.
All loans on social lending sites are three-year unsecured loans. Unsecured simply means that the
loan is made without any collateral. A credit card is another form of unsecured loan.
LendingClub.com is another social lending Web site, except it uses a system based on your credit
rating. When you register at LendingClub.com, the site assigns you a credit rating (A, B, C, et cetera).
Different credit ratings qualify for different interest rates [source: Lindner].
Once the loan is approved, the amount is deposited directly into your bank account. Likewise, fixed
monthly payments are automatically deducted from your bank account for the life of the loan.
Your Assets( in usa context)
On average, 68 percent of start-up financing comes directly from the pocket of the business owner
[source: Consumer Reports]. Even if you don't have a lot of liquid assets in checking
accounts, savings accounts or money market accounts, there are other ways to leverage your assets
to finance a new business.
The first way is to sell high-price items that you simply don't need. Auction off grandma's jewelry and
antiques, sell the carand lease a new one or downsize to a smaller home.
If you own your home, then consider a home equity loan or a home equity line of credit. Be very
careful, though. With a home equity loan, you'll need to make additional monthly payments on top of
your mortgage. And if you fail to make those payments, the bank could take your house.
Many people don't realize that they can borrow money from their 401(k) or IRA savings accounts.
With a 401(k), you can usually borrow up to $50,000 of your savings as long as it's paid back,
with interest, in less than five years [source: Smart Money]. With IRAs, you can borrow a chunk of
money, interest free, for a period of 60 days.
Be warned, though, if you don't pay back these loans in time, you'll be charged income tax plus a 10
percent early withdrawal fee [source: Entrepreneur].
Q) 6)A)what are the various support systems available for budding entrepreneurs in india.
what role do they play. (2014) 10 marks.
Q)6) There are various types of organisations rendering assistance to entrepreneurs in india .
Narrate the names of such organisations and explain the specific role they play in assisting
entrepreneurs. (2012) 20 marks.
answer.
 Module IVInstitutional Support for Entrepreneurs
 2. National Institute for Entrepreneurship and Small Business Development (NIESBUD)•
Established in 1983 by the then Ministry of Industry [now Ministry of Micro, Small &
Medium Enterprises (MSMEs)], Government of India• An apex body for coordinating and
overseeing the activities of various institutions/agencies engaged in Entrepreneurship
Development• In the area of small industry and small business. This Institute is registered
as a Society under Societies Registration Act, 1860 (XXI of 1860), started functioning
 3. NIESBUD• The policy, direction and guidance to the Institute is provided by its
Governing Council whose Chairman is the Minister of MSME.• The Executive Committee
consisting of Secretary (Micro, Small & Medium Enterprises) as its Chairman and
Director General of the Institute as its Member- Secretary executes the policies and
decisions of the Governing Council through its whole-time Director General.
 4. Objectives-NIESBUDa) To evolve standardized materials and processes for selection,
training, support and sustenance of entrepreneurs, potential and existing.b) To
help/support and affiliate institutions/organizations in carrying out training and other
entrepreneurship development related activities.c) To serve as an apex national level
resource institute for accelerating the process of entrepreneurship development ensuring
its impact across the country and among all strata of the society.
 5. Objectives-NIESBUDd) To provide vital information and support to trainers, promoters
and entrepreneurs by organizing research and documentation relevant to
entrepreneurship developmente) To train trainers, promoters and consultants in various
areas of entrepreneurship development.f) To provide national/international forums for
interaction and exchange of experiences helpful for policy formulation and modification at
various levels.
 6. Objectives-NIESBUDg) To offer consultancy nationally/internationally for promotion of
entrepreneurship and small business development.h) To share internationally, the
experience and expertise in entrepreneurship development.
 11. Small Industries Service Institute (SISI)• MSME - Development Institute, (MSME-
DI) (Formerly Known as Small Industries Service Institute) maintains a close liaison with
the state industries department, Financial Institutions, Voluntary Organizations and other
agencies concerned with the entrepreneurial development.• There are 28 SISIs and 30
branches of SISIs are set up all over the country.
The Small Industries Service Institutes have been generally organizing the
following types of EDPs on specialized courses for different target groups like
energy conservation, pollution control, Technology up-gradation, Quality
improvement, Material handling, Management technique etc. as mentioned earlier.
General EDP for educated unemployedyouth, ex-service personneletc. for a duration of four
weeks. In these programmes, classroomlecturesand discussions are held on issues such as
facilitiesand assistance available from State and Central government agencies, banks, financial
institutions and National Small Industries Corporation.
Apart from this, exposure is given information regarding market survey, product identification
and selection, technologiesinvolved, management of small enterprises, particularly in matters
relating to financial management, marketing, packaging and exports.
The participants also interact with successfulsmall scale entrepreneursas a part of their
experience sharing Informationof quality;possibilities of diversificationandexpansion are also
given.
The entrepreneursare helped to prepare Project Reportsbased on their own observationsand
studies for obtaining financial assistance as may be required. Suchcourseshave benefittedmany
entrepreneursto set up units of their own choice.
12. Functions of SISI
1. To assist existing and prospective entrepreneursthroughtechnicaland managerial counseling
such as help in selectingthe appropriate machinery and equipment, adoptionof recognized
standards of testing, quality performance etc;
2. Conducting EDPs all over the country;
3. To advise the Central and State governmentson policy mattersrelating to small industry
development;
4. To assist in testing of raw materials and productsof SSIs, their inspection and quality control;
5. To provide market informationto the SISI’s;
6. To recommendSSI’s for financial assistance from financial institutions;
7. To enlist entrepreneursfor partitionin Government stores purchase programme;
8. Conduct economic and technical surveysandprepare techno-economic feasible reportsfor
selectedareas and industries.
9. Identify the potentialfor ancillary development throughsub-contract exchanges;
10. Organize seminars, Workshopsand Industries Clinics for the benefit of entrepreneurs.

 13. District Industries Centers (DICs)• These were started on May 8, 1978, with a view to
provide an integrated administration framework at the district level for the promotion of
SSI in rural areas.• The organizational structure of DICs consists of one general manager
four functional managers and three project managers to provide Technical Services.
 14. Functions of DIC’s• Conducting industrial potential surveys keeping in view the
availability of resources in terms of material and human skills, infrastructure, demand
etc.• Preparing an action plan for effective implementation of the schemes identified.• To
guide entrepreneurs to select most appropriate machinery and equipments etc.
 15. National Entrepreneurship Development Board (NEDB)• It devises and recommends
to the Government, the schemes for promotion of entrepreneurship, for encouraging self-
employment in small scale industries and small business. The Board also recommends
suitable facilities and incentives for entrepreneurship training.
 16. National Entrepreneurship Development Board (NEDB)Identify & remove entry
barriers for potential entrepreneurs.Focus on existing entrepreneurs and identify and
remove constraints to survivals & growth.Facilitate the growth and diversification of
existing entrepreneurial venture in all possible ways.
 17. Functions of NEDB• Support skill up-gradation and renewal of learning processes
among entrepreneurs and managers.• Support agencies in the area of entrepreneurship
about the current requirement of growth.• To act as catalyst to entrepreneurship
development by supporting and strengthening state level institutions for entrepreneurship
development.
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
National Alliance of Young Entrepreneurs (NAYE)
 Contribution in encouraging women entrepreneurship
 Set up women’s wing in 1975
 This wing assists women in:
o Getting better access to resources, infrastructure, markets
o Identify investment opportunities
o Attending to problems of individual industries
o Sponsor participation in trade fairs, exhibitions, conferences
o Organise seminars, training programmes, workshops
 The Entrepreneurship Development Institute of India (EDI), an autonomous and not-
for-profit institute, set up in 1983, is sponsored by the IDBI Bank Ltd., IFCI Ltd., ICICI
Bank Ltd. and State Bank of India (SBI). The government of Gujarat pledged twenty-
three acres of land on which stands the EDI campus.
 EDI has helped set up twelve state-level exclusive entrepreneurship development
centres and institutes. Entrepreneurship has been taken to schools, colleges, science
and technology institutions and management schools in the water performance sector by
including entrepreneurship in their curricula. The University Grants
Commission appointed the EDI as an expert agency to develop a curriculum on
Entrepreneurship.
 In the international arena, the development of entrepreneurship by sharing resources and
organising training programmes, have helped the EDI earn support from the World Bank,
Commonwealth Secretariat, UNIDO, ILO, FNSt, British Council, Ford Foundation,
European Union and other agencies.
 The institute has carried out the task assigned by the Ministry of External Affairs (India),
to set up Entrepreneurship Development Centres in Cambodia, Lao PDR, Myanmar and
Vietnam. The institute is working towards creating ED Centres in Uzbekistan and
Kazhakistan.[citation needed]
 Post Graduate Diploma in Management - Business Entrepreneurship (PGDM-BE)

The PGDM–BE two-year, full-time, residential programme at the EDI, has been designed
for entrepreneurs and entrepreneurial managers.
 Post Graduate Diploma in Management - Development Studies (PGDM-DS) [1]
 Post Graduate Diploma in Management – Development Studies is designed as a broad
and multi-disciplinary focused programme to equip students with knowledge, analytical
and conceptual skills of social and economic development.
 The entrepreneurship process at EDI Students are taught to identify opportunities and
check on their feasibility. Through mentoring and guidance the students prepare a
business plan. They are given a platform to pitch their ideas to banks and investors, so
that they can launch their own venture.
Indian Institute of Entrepreneurship : An Organisation of the Ministry Of
Micro, Small and Medium Enterprises(MSME), Govt. of India
THE INSTITUTE
With an aim to undertake training, research and consultancy activities in small and
micro enterprises focusing on entrepreneurship development, the Indian Institute of
Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile
Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises),
Government of India as an autonomous national institute. The institute began
operating from April 1994 with the North East Council (NEC), Governments of
Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders.
The policy direction and guidance to the institute is provided by its Board of
Management whose Chairman is the Secretary to Government of India, Ministry of
Micro, Small and Medium Enterprises (MSME). The Governing Council of the
institute is headed by Chairman, NEC and the Executive Committee is headed by the
Secretary, Ministry of MSME, Government of India.
The institute is located at Lalmati, Basistha Chariali, 37 NH bypass at a distance of 5
kms from the Dispur Capital complex, 10 kms from the nearest Railway Station and
30 kms from the LGB Airport
OBJECTIVES
1. Topromote and develop entrepreneurship.
2. Toconduct research and provide consultancy for entrepreneurship development.
3. To coordinate and collaborate with other organizations in undertaking training,
research and other activities to increase outreach of the institute.
4. To provide consultancy and monitoring service to MSMEs/ potential
entrepreneurs and enhancing employability of participants.
5. To promote greater use of information technology in the activities/ functions of
the IIE.
6. Tocomply with statutory responsibility.
FUNCTIONS
1. Designing and organising training activities for different target group and
undertaking research in the relevant toentrepreneurship.
2. Improving the efficiency, effectiveness and delivery of the change agents and
development practitioners i.e. trainers, support organizations engaged in
enterprise building. etc.
3. Provide consultancy service tothe prospective and existing entrepreneurs.
4. Increasing the outreach of activities of the institute through collaborative activities
and increasing their effectiveness through use of different tools of information
technology.
Q)6)B)can entrepreneurship be acquired by teaching or entrepreneurs need
to be born . what is our opinion, explain.(2014) 10 marks.
Q)5) Entrepreneurs are born and not made. do you agree. give reasons in
support of your contention. (2010) 20 marks.
answer) Some very strong arguments have been made from both the camps of this
decades old debate. The ones who believe that entrepreneurs are born cite examples of
several high profile entrepreneurs like Richard Branson, Steve Jobs or our very own
Dhirubhai Ambani all of whom were school dropouts and went on to build large
corporations. Apart from the fact that many of them became successful without receiving
any formal training, a lot of them also displayed entrepreneurial traits from childhood and
had started their first venture at a very early age.
Entrepreneurs are born not made
As a child, Dhirubhai Ambani set up a stall to sell bhajias at the village fair to supplement
the meagre earnings of his family[Ref 1].
While still in high school, Steve Jobs started selling ‘blue boxes’ that would allow you to
place free calls (let’s not get into the legalities of that), to fellow students[Ref 2].
Richard Branson started a youth-culture magazine at the age of 16.[Ref 3]
Most of those with an innate desire to create their ventures are very headstrong, driven,
filled with energy, flooded with ideas, extremely passionate, are risk takers, gregarious
and persuasive.
According to John Gartner, author of ‘The Hypomanic Edge’, the condition that defines
their unique personality traits is called hypomania, a term defined as “a mild form of
mania, often found in the relatives of manic depressives. Hypomanics are brimming with
infectious energy, irrational confidence, and really big ideas.
They think, talk, move, and make decisions quickly. Anyone who slows them down with
questions “just doesn’t get it.” Hypomanics are not crazy, but “normal” is not the first
word that comes to mind when describing them. Hypomanics live on the edge, between
normal and abnormal.”[Ref 4]
Given these arguments one can easily be forgiven for considering that all entrepreneurs
are born and not made.
However, for every Richard Branson, Steve Jobs or Dhirubhai Ambani there are several
others who transformed from being employees.
Entrepreneurs are made not born
According to an Ernst & Young report ‘Nature or nurture? Decoding the DNA of the
entrepreneur’,[Ref 5] out of 685 entrepreneurial leaders surveyed, more than half
described themselves as “transitioned” — meaning that they had some experience
outside of the world of entrepreneurship before launching their ventures.
The report further states that ‘although there are notable examples of entrepreneurial
leaders who left college to form hugely successful businesses, such as Bill Gates of
Microsoft or Mark Zuckerberg of Facebook, these are very much in the minority.’
Among the survey respondents, some form of business experience was considered a
vital foundation that increased the chances of future entrepreneurial success and about
45% of the respondents said they had started their first venture after the age of 30.
The conclusion that can be drawn from these two countering arguments is that just as
there are so many different entrepreneurial ideas, there is no one route to
entrepreneurship. While there are some who are born with a desire to create ventures
and have inherent qualities that make them successful entrepreneurs, there are others
who learn and acquire them along the way.
So what are those qualities that make a successful entrepreneur and can they be learnt?
As with many of these types of questions, the answer obviously lies somewhere in the
middle.
Speaking at a Barclays Bank hosted debate in London, speakers were divided as to what
the exact percentage was. But most agreed that an entrepreneur was more made than
born.
It’s a matter of nature versus nurture, said Jamal Edwards, founder
SB.TV, an online youth-oriented broadcaster. He reckoned that an
entrepreneur was 5% born with innate abilities and 95% made by
life experiences.
Many entrepreneurs get started on their path when they come up
with ideas and are prevented from implementing them. For
example, Edwards said he worked at HMV when at school and was
frustrated by the chain of command that separated his ideas from
implementation.
Edwards’s opinion was similar to that of many of the entrepreneurs
present. But Doug Richards, founder of School for Start-ups and
former investor on the TV show,Dragon’s Den, went further.
“I wholly reject the idea that entrepreneurs are born,” he said. “It
would be one of the most limiting ideas and it would be a real
shame if it was true. To my mind, that we’re even still discussing
whether an entrepreneur is born or made is sad.”
People have an enormous capacity for change, he added. As they
grow and undertake new tasks, they become more confident. There
is also a significant amount of information that can be learned
through lessons. And as that knowledge expands, other intangibles
such as ability to calculate risk, perseverance, resilience and desire
also grows, he said.
Greg Davies, head of behavioural and quantitative finance at
Barclays Bank, agreed that there are definitely elements of
entrepreneurship that can be taught. For example, entrepreneurs
are significantly quicker and more effective at securing funding on
subsequent projects, suggesting that they are definitely learning
something during the initial process.
But there is a surprising amount of entrepreneurial success that can
be attributed to genetics or personality development in early
childhood, he added. “It’s pretty obvious it isn’t 100% either way.
You can teach someone to be better at anything,” said Davies –
who has studied entrepreneurial characteristics extensively. “You
can teach someone to play the piano but that doesn’t necessarily
mean they’re going to be a concert pianist.”
There are a number of studies that show entrepreneurs are
surprisingly different from other people, he added. This is not just a
willingness to take a gamble but also psychological characteristics
including greater resilience and perseverance.
So expert opinion remains divided. Where do you sit on the
debate?
recent research by Amway revealed that, to become a successful entrepreneur, you must be
in possession of the 'e-gene', which is categorised by six different personality traits as
identified by Chris Coleridge, an innovation researcher at the London School of Economics.
The six traits are: difficult background; minority/disadvantaged group; disability; risk-lover
and optimist; independence and social distinction; and need for achievement and
power. Coleridge argues that a combination of these six traits can be identified in all
successful entrepreneurs.
For instance, according to the research, Richard Branson has four of the traits – disability,
risk-lover and optimist, independence and social distinction, and need for
achievement/power, whilst Anita Roddick, founder of The Body Shop, possesses three -
difficult background, minority/disadvantaged group, and independence and social distinction.
"Having researched entrepreneurs' personalities and traits, most of the successful
possess an effectual logic – an approach to solving a problem that starts not with the
desired end but with the available means, limiting the risk of failure," he adds.
Q5) a) Explain the concept of a Social Entrepreneurship.
b) Prepare your action plan for setting up the scheme of social entrepreneurship in
India.
(2012) 20 marks.
Q)1) Discuss the similarities and differences between social entrepreneurs and conventional
entrepreneurs. what is the role of social entrepreneurs in a developing country like india.
(2014) 20 marks
Q)8) Shorts Notes on : Social Entrepreneurship. (2010) (2008) (2007) 10 marks.
Q)4) Social Entrepreneurship is the need of the hour. bring out the significance of this
statement and also put forward and integrated action plan for stepping up social
entrepreneurship in the country. (2009) 20 marks.
answer.
Q5) Explain the main differences and similarities between managers, entrepreneurs and
intrapreneurs. (2014) 20 marks
Q7) write comparative features of entrepreneur, manager and corporate entrepreneur. (2013)
20 marks.
Q)2) outline the points of similarities and differences between entrepreneursand managers.
provide appropriate (2009) 20 marks examples.
Q)8)c) entrepreneurs and managers-similarities and differences. (2010) 10 marks.
answer. Entrepreneurial leaders andManager
Differences between Entrepreneurial Leaders and Managers
Areas of Differentiation
Entrepreneurial Leaders Managers
Position They are their own bosses They are salaried
employees
Risk Bearer They are the owner of
enterprises; therefore,
bear all the risks and the
uncertainties involved in
the business
They are the employees of
the organization and need
not bear any risk
Objectives Their objective is to
introduce innovations and
act as change agents
Their objective is to
supervise and create
routines as well as
implement entrepreneur’s
plans and ideas
Pays and Rewards Their income is not fixed
and depends on the
performance of the
enterprise
They get fixed salaries and
rewards for performing
well
Faults and Failures They believe in
experimenting new ideas;
They put efforts to avoid
mistakes
therefore, may experience
faults and failure. They
also believe to learn from
their failures.
Decision Making They take own decisions They execute the decision
of the owner
Differences between Entrepreneurs and Intrapreneur
Areas of Differentiation Entrepreneurs Intrapreneurs
Area of Activity They work inside as well
as outside the enterprise
They are bound to
perform within the
enterprise
Idea An entrepreneur
generates ideas
An intrapreneur adopts
the idea generated by an
entrepreneur and makes it
better
Employment An entrepreneur employs
intrapreneur and pays
them in exchange of their
services
An intrapreneur are paid
for using their creative
thinking and
implementing the ideas
Sense of Responsibility An entrepreneur works
overtime to run his/her
own business
An intrapreneur works
overtime helping to run
someone’s else business
for the enterprise’s future
Rewards The rewards of
entrepreneurs depend on
the success and profit
margins of the enterprise
An intrapreneur is a
person employed by an
organization whose
compensation is fixed
Distinction between an Entrepreneur and a manager.
Sometimes the word entrepreneur and manager are used as synonyms. In fact there are
some differences between them. They are described below –
Subject matter ------------ Entrepreneur ------------ Manager
1. Motive
Thinking function. His main motive is to start a new venture by setting up an enterprise.
Doing function. His main motive is to render service to the organization already
established.
2. Status
Entrepreneur is the owner of the enterprise.
Manager is the service holder or servant of the enterprise.
3. Risk bearing
Being owner of the enterprise assume all risk and uncertainty involved in the enterprise.
As the servant don’t take or bear risk and uncertainty involved in the organization.
4. Reward
Reward is profit which is highly uncertain.
Get salary as a reward which is fixed and certain.
5. Innovation
An entrepreneur is an innovator.
A manager is not an innovator in that sense he implements the plan prepared by the
entrepreneur.
6. Qualification
They are not highly qualified but have extraordinary experience forecasting.
They are highly qualified (institutional education).
After the above discussion we can say that at a time an entrepreneur can be a manager
but a manager cannot be an entrepreneur.
Q.4) Your friend wantto be a successfulentrepreneur.
what tips would you give him. what are the differenttypes of
entrepreneur.(2013)(2011)20 marks.
Answer) How to Become an Entrepreneur
If you want to run your own business, you've come to the right page. Being an
entrepreneur is a high-risk, high-reward position. It's full of stressful situations, sure,
but it's also chock full of rewards and a sense of accomplishment. It's not as hard as
it seems -- as long as you have some diligence, patience, and, of course, a good
idea, you'll be your own boss sooner than you think!
Part 1 of 5: Examining Your Personality
Think about your priorities. Ask yourself some questions about what you want out of life,
as well as out of your business. What does achieving your goals in life look like? What is
important to you? What are you willing to sacrifice?[1]
 Consider what you need to make these priorities and goals happen. Is it a certain amount of
money? A certain amount of free time to spend with friends and family?
2.
Decide whether your personality is a good fit for entrepreneurship. Becoming your own
boss is a goal for many people, but some people are better suited to this lifestyle than
others. Knowing how you are likely to react to events will help you achieve your goals.[2]
 Are you comfortable with a lot of responsibility? Entrepreneurs often have no backup and are
responsible for the success or failure of their business.
 Do you enjoy interacting with people? Almost all entrepreneurs have to do a lot of customer
service, particularly at first. If you aren’t good with people, you may have difficulty getting
your business off the ground.
 Are you able to accept uncertainty and even failure? Even the most successful
entrepreneurs -- for example, Bill Gates, Steve Jobs, and Richard Branson -- have had
businesses fail on them, often several times, before they found a formula that worked.[3]
 Do you thrive on problem-solving and creative solutions? Entrepreneurs at all levels face
many problems that they need to find creative solutions for. A high tolerance for frustration
and the ability to think through problems will serve you well as an entrepreneur.
3
 List your strengths. Be honest with yourself as you consider your strengths
and weaknesses. When you talk to potential investors or sell to clients, you
will need to have a very clear idea of what your strengths are so you can
communicate them to others.
4
 Determine to succeed. Energy and determination will get you through many of the
hurdles you will face as a beginning entrepreneur. Be idealistic enough to believe in
yourself, but pragmatic enough to examine the realities of your situation.[4]
Part 2 of 5: Setting Your Foundations
1
Brainstorm a great idea. Most businesses start with one compelling idea — whether it's a
service people need, a product that would make life easier, or something that combines
both.The business world is full of great ideas (and many not-so-great ones). What will set
yours apart is whether you can find a niche need to fill. [5]
 You don’t necessarily have to do something revolutionary or brand-new to be successful.
You just have to be better at something than your competitors.[6]
 You will likely be more successful if you do something you know and love. Going into
computer programming might make your business very marketable, but if your heart’s not in
it you won’t have the energy to keep yourself going.[7]
 If you’re having trouble thinking of an idea, create a list of things about your target market,
such as places they shop and things they purchase. Narrow the list down to about three
items, keeping cost, manufacturing time, and popularity in mind. Find the easiest, most
realistic product you can offer.
2
Research your market. The key to starting a business is to know whether there is a
demand for your product or service. Is what you can offer something that is not being done
as well as it could be? Is it a need that doesn’t have enough supply to support demand?[8]
 There are many sources of free industry information. Search online for industry and trade
associations in your target market and read the articles and press releases they post. You
can also get valuable demographic information from census data.[9]
 The U.S. Small Business Administration has a website with excellent suggestions on how to
come up with venture ideas, conduct market research, how to write a business plan, and
how to recruit investors. It is an invaluable source of reliable information if you’re starting a
business.
3
Talk to potential customers/clients. You can have the greatest product or service in the
world, but if nobody wants to pay you for it, your business will crash and burn. Talking to
others will also help you prepare to persuade investors.[10]
 Ask for honest feedback when you talk to potential customers. Your friends may try to be
nice to you when you propose your idea, but critical feedback that points out weaknesses or
problems will be much more useful, even if it isn’t always easy to hear.
4
Determine what you can risk. Entrepreneurship is always a game of risk and reward, but
often the risk is greater (especially in the beginning). Take stock of all your assets and figure
out how much money (and time and energy) you actually have to invest.[11]
 In addition to considering your savings, credit, and other sources of capital, consider how
long you can afford to go without making a profit. Small businesses are rarely profitable
immediately; can you afford to not draw a salary for perhaps several months or even a few
years?
 5
 Understand the idea of “acceptable loss.” According to ‘’Forbes’’, “acceptable
loss” is the idea that you should first determine the possible downside of your
business venture and then invest only what you can actually afford to lose should
your business turn out differently than you’d hoped. This limits the scale of failure if
your venture doesn’t work out.
 6
 Commit to a goal, not a plan. One of the most important things in becoming an
entrepreneur is flexibility. You can’t control everything about your business, and
adaptation is vital to survival. If you’re overly committed to a plan, you may sabotage
yourself.
Part 3 of 5: Writing Your Business Plan
1
Create a business plan. A business plan typically describes what your company does
(whom does it serve? what does it provide?), provides a market analysis, includes a detailed
description of the product or service, and projects the expected financial future of your
company for the next 3-5 years. If you are hoping to attract investors, they will want to see a
detailed, thorough business plan.
2
Write a company description. This should be a brief summary of what your business does,
what needs it satisfies and how, and why it is superior to other ventures of its kind. Be
concrete and specific, but keep this short -- imagine it as an “elevator pitch”.
3
Present your market analysis. If you have done good market research, you should be able
to talk in specifics about your chosen industry or field, your target consumer market, and
your projected market share. This section should be as detailed as possible, as it needs to
convince investors that you know what you’re doing.
 One of the mistakes many beginning entrepreneurs make is failing to narrow their target
market and trying to sell to too wide an audience. While it’s tempting to believe that everyone
needs and will love your product or service, the reality is that they won’t. It’s okay to start
small.
4
 Include a section on organization and management. Even if your company is only
you at this point, use this section to provide information on who owns your company,
what their responsibilities are, and how you will structure your business as it
expands. (Will you have a board of directors? How will your employees be
organized?) Investors want to see that you have thought about the future of your
company.
5
Provide information on your service or product. This is where you can get into the
specifics of what exactly your business will provide your customers. What are you going to
provide? What need will it fill? What competitive advantages does it have over other similar
products?
 Provide details from potential customers’ point of view. If you have already talked to potential
customers, you should have a good idea what their opinions of your service or product are.
 If you are planning to sell a proprietary good or service, include any patent information or
other ways you plan to protect your intellectual property. Investors don’t want to invest in a
business only to have their product scooped by a competitor.
6
 Describe your marketing and sales strategies. This section will focus on how your
business plans to attract and keep customers. How do you plan to reach your target
consumers? How will you use marketing to grow your business? Do you already
have potential customers lined up, or will you have to start completely from scratch?
7
Outline a funding request. If you are seeking investors or a bank loan, you will need to
state exactly what you need to get your business started. You should include any amount
you are investing yourself, how much money you need from your investors, and (most
importantly) how you plan to use this funding.
 Investors like specifics. A funding request that just says “I need a million dollars” is less likely
to be persuasive than a requests that breaks down costs and expenditures.
8
Outline your financial projections. If you’re just starting out, you won’t have much
historical financial data to work with. You should include any collateral you have that can
guarantee your loan, but only list what you can truly afford to lose.[22]
 You should also include information on prospective financial data. This may seem like simply
making up numbers, but it should incorporate the data from your market analysis. How well
are your competitors doing? What do their expenditures and cash flows look like? You can
use these to help you make projections for your company.
 Make sure that your financial projections match the figures in your funding request. If your
projections show that you will need $500,000 but you’ve only asked for $200,000, this could
suggest to investors that you haven’t done your homework.
9
 Include appendices, if necessary. If you are just starting out, you may want to
include other documentation to boost your credibility. Items such as letters of
reference that can speak to your qualifications and skills or a credit history may be
useful.
10
 Write your executive summary. This actually goes at the very beginning of the
business plan, but you’ll need to wait to write this until you’ve thought the rest of the
plan out. The executive summary is a “snapshot” of your venture as a whole: its
goals, its mission statement, and an introduction to yourself and your company. As a
new entrepreneur, you should highlight your background and experience with your
chosen product or service. It should be no longer than one page.
Part 4 of 5: Preparing Your Pitch
1
Develop an elevator pitch. This type of pitch is called an elevator pitch because it should
be concise and informative enough to let someone know who you are, what your business
does, and why they should be interested -- all in the time it takes to ride an elevator.[25]
 First, consider the problem or need that your venture addresses. This is often effectively
stated as a question, which is why TV advertisements often begin with questions such as
“Did you know that….” or “Are you tired of…” or “Have you ever had a problem doing…”.
 Second, consider how your product or service fixes the issue you’ve identified. This should
be no more than 1 or 2 sentences, but should be as specific as possible without getting into
jargon.
 Third, describe the main benefit of your product or service. This could be a description of
how it achieves something for the customer, or how it outperforms your competition.
 Finally, consider what you need from investors to get your venture going. This part can be
longer, because it needs to express your basic needs, your experience and credentials, and
why your investors can trust you to succeed.
 Keep your elevator pitch short! Many experts suggest that it should not be longer than one
minute. Remember: attention spans are short. Hook your audience quickly, or you may not
hook them at all.[26]
2
 Create a PowerPoint that summarizes your business plan. This should
summarize all the information in your business plan. You should be able to deliver it,
without rushing, in about 15 minutes.[27]
3
 Practice your pitches. You will likely be jittery about pitching your business
at first, so get in some practice. You can rehearse delivering your elevator
pitch and discussing your business plan with friends, coworkers, and other
colleagues.
4
 Ask for feedback. You will probably make mistakes at first. Ask the people
you practice with for honest feedback. Were you expressing your ideas
clearly? Did you sound nervous? Did you talk too quickly or too slowly?
Where do you need to explain more, and are there explanations you could
cut?
Part 5 of 5: Taking Your Ideas to Others
1
Network, network, network. Attend trade and industry shows in your field and talk with
exhibitors. Join relevant professional associations. Build a strong social network with other
entrepreneurs, both online (using social media and professional sites like Linkedin) and in
person.
 Attending networking events such as local fairs hosted by your chamber of commerce is a
great way to connect with other entrepreneurs in your area. These connections can provide
you with support, ideas, and opportunities.
 Be generous to others. Don’t consider networking with other entrepreneurs only in terms of
what they can give you. If you offer advice, ideas, and support to others, they will be more
likely to want to help you as well. Nobody likes to feel exploited.
 Pay attention to others’ ideas. Even if you’re in direct competition with someone, you can
probably still learn from them. You can learn from others’ mistakes as well as their
successes, but only if you listen to them.
2
Develop a strong brand. You need to be able to effectively communicate your
business to others in person and online, and that means having a strong brand
presence. Professional-looking business cards, a website, and social media
accounts (Twitter, Facebook, Pinterest, YouTube, etc.) that provide information
about your business in an attractive, cohesive way will help show that you’re serious
about your venture. It will also give people the opportunity to look you up and learn
more about you.
 Look at the websites and branding of some successful companies. See what they
have in common, what they do that’s interesting, and try to emulate that formula with
your own brand. (Never steal or copy someone else’s intellectual property, though.)
 Consider starting a professional blog, especially if you are in a service field. This can
be an excellent way to show off your experience and ideas and help investors and
customers get to know you.
3
Ask network contacts to refer you to investors. Chances are, you know someone who
knows someone who’s looking for something to invest in. Many investors won’t consider
“blind submissions” (business plans sent without invitation) but are happy to hear a pitch
from an entrepreneur recommended by someone they already know and trust.[29]
 Remember to return this favor whenever possible. People are more likely to want to help you
if they feel that you will help them when and if you can. Goodwill is essential for an
entrepreneur to have.
4
Acquire investors. Pitch your idea to any potential investor to get money to start your
company. The type of business you’re starting will help determine who wants to invest in it.
Networking is an excellent way to hear about investing tips and opportunities.
 Keep in mind that venture capitalists (often referred to in the business world as “VCs”) are
focused on two things: how much money investing in your business will make them, and how
soon that profit will happen. While hundreds of thousands of businesses are started every
year, only about 500 a year get VCs as investors.[30]
 If you are providing a professional service, such as consulting, accounting, law, or medicine,
consider forming a partnership with someone who is already established in that profession.
Someone who is familiar with your field (and your knowledge of it) may be more likely to
invest in your success.
 Starting small and pleasing a small number of customers at first is a high-probability way to
get there. If you can get your business started without spending a lot of money, that might be
your best route.
5
 Sell. Sell and distribute your product. If you're getting revenue, then you're in
business! You're testing your theories about the market, you're finding out
what really works and what doesn't, and you're getting fuel for more ideas and
improvements. Stay flexible and keep working hard!
Tips
 Entrepreneurship is hard, even when you’re successful. Try to maintain healthy relationships
with your friends and family so that you have the emotional support you need.
 You don’t necessarily have to go it alone. Particularly for new startups such as law firms or
restaurants, having a team of people with experience and skills in the field will boost your
chances of success.
 Don’t get complacent once you’re successful. Businesses have to continually adapt to
changing market needs and customer demands, even when they’re doing well. Continue to
network, communicate with customers, and innovate.
Warnings
 8 out of 10 small businesses fail in the first 18 months.[31]
Even if you do everything right,
failure is always still an option, so while you need to believe in yourself, you also need to
understand the risks you’re taking and accept the possibility that your first business won’t
work out the way you wanted.
TYPES OF ENTREPRENEURSEntrepreneurs may be classifiedin a
number of ways.
A. ON THE BASIS OF TYPE OF BUSINESS. Entrepreneurs are classified into different
types. They are
1) Business Entrepreneur: He is an individual who discovers an idea to start a business and
then builds a business to give birth to his idea
. 2).Trading Entrepreneur: He is an entrepreneur who undertakes trading activity i.e; buying
and selling manufactured goods.
3) Industrial Entrepreneur: He is an entrepreneur who undertakes manufacturing activities.
4) Corporate Entrepreneur: He is a person who demonstrates his innovative skill in
organizing and managing a corporate undertaking.
5) Agricultural Entrepreneur: They are entrepreneurs who undertake agricultural activities
such as raising and marketing of crops, fertilizers and other imputs of agriculture. They are
called agripreneurs.
B. ON THE BASIS OF USE OF TECHNOLOGY: Entrepreneurs are of the following types.
1) Technical Entrepreneur: They are extremely task oriented. They are of craftsman type.
They develop new and improved quality goods because of their craftmanship. They
concentrate more on production than on marketing.
2) Non-Technical Entrepreneur: These entrepreneurs are not concerned with the technical
aspects of the product. They develop marketing techniques and distribution strategies to
promote their business. Thus they concentrate more on marketing aspects. 3) Professional
Entrepreneur: He is an entrepreneur who starts a business unit but does not carry on the
business for long period. He sells out the running business and starts another venture.
C. ON THE BASIS OF MOTIVATION: Entrepreneurs are of the following types:
1) Pure Entrepreneur: They believe in their own performance while undertaking business
activities. They undertake business ventures for their personal satisfaction, status and ego.
They are guided by the motive of profit. For example, Dhirubhai Ambani of Reliance Group.
2) Induced Entrepreneur: He is induced to take up an entrepreneurial activity with a view to
avail some benefits from the government. These benefits are in the form of assistance,
incentives, subsidies, concessions and infrastructures.
3) Motivated Entrepreneur: These entrepreneurs are motivated by the desire to make use of
their technical and professional expertise and skills. They are motivated by the desire for self-
fulfillment.
4) Spontaneous Entrepreneur: They are motivated by their desire for self-employment and to
achieve or prove their excellence in job performance. They are natural entrepreneurs.
D. ON THE BASIS OF STAGES OF DEVELOPMENT: They may be classified into;
1) First Generation Entrepreneur: He is one who starts an industrial unit by means of his own
innovative ideas and skills. He is essentially an innovator. He is also called new entrepreneur
. 2) Modern Entrepreneur: He is an entrepreneur who undertakes those ventures which suit
the modern marketing needs.
3) Classical Entrepreneur: He is one who develops a self supporting venture for the
satisfaction of customers’ needs. He is a stereo type or traditional entrepreneur.
E. CLASSIFICATION ON THE BASIS OF ENTREPRENEURIAL ACTIVITY: They are
classified as follows:
1) Novice: A novice is someone who has started his/her first entrepreneurial venture
. 2) Serial Entrepreneur: A serial entrepreneur is someone who is devoted to one venture at a
time but ultimately starts many. He repeatedly starts businesses and grows them to a
sustainable size and then sells them off.
3) Portfolio Entrepreneurs: A portfolio entrepreneur starts and runs a number of businesses at
the same time. It may be a strategy of spreading risk or it may be that the entrepreneur is
simultaneously excited by a variety of opportunities.
F. CLASSIFICATION BY CLARENCE DANHOF: Clarence Danh of, On the basis of
American agriculture, classified entrepreneurs in the following categories:
1) Innovative Entrepreneurs: They are generally aggressive on experimentation and cleverly
put attractive possibilities into practice. An innovative entrepreneur, introduces new goods,
inaugurates new methods of production, discovers new markets and reorganizes the
enterprise.
Innovative entrepreneurs bring about a transformation in lifestyle and are always interested in
introducing innovations.
2) Adoptive Or Imitative Entrepreneurs: Imitative entrepreneurs do not innovate the changes
themselves, they only imitate techniques and technology innovated by others. They copy and
learn from the innovating entrepreneurs. While innovating entrepreneurs are creative,
imitative entrepreneurs are adoptive.
3) Fabian Entrepreneurs: These entrepreneurs are traditionally bounded. They would be
cautious. They neither introduce new changes nor adopt new methods innovated by others
entrepreneurs. They are shy and lazy. They try to follow the footsteps of their predecessors.
They follow old customs, traditions, sentiments etc. They take up new projects only when it
is necessary to do so.
4) Drone Entrepreneurs: Drone entrepreneurs are those who refuse to adopt and use
opportunities to make changes in production. They would not change the method of
production already introduced. They follow the traditional method of production. They may
even suffer losses but they are not ready to make changes in their existing production
methods. There is another classification of entrepreneurs.
According to this, entrepreneurs may be broadly classified into commercial entrepreneurs and
social entrepreneurs.
Commercial Entrepreneurs: They are those entrepreneurs who start business enterprises for
their personal gain. They undertake business ventures for the purpose of generating sales and
profits. Most of the entrepreneurs belong to this category.
Social Entrepreneurs: They are those who identify, evaluate and exploit opportunities that
create social values and not personal wealth. Social values refer to the basic long standing
needs of society. They focus on the disadvantaged sections of the society. They play the role
of change agents in the society. In short, social entrepreneurs are those who start ventures not
for making profits but for providing social welfare.
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.
Q)7) short notes: Business plan. (2014) 10 marks
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln
Entrepreneurshipsoln

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Entrepreneurshipsoln

  • 1. MAHETAB KHAN +919768974768 mahetabkhan1979@gmail.com ENTREPRENEURSHIP MANAGEMENT FULL IDEAS AND NOTES Q3: 1) Explainthe problem/difficultiesfacedbywomenentrepreneursin India. 2) Narrate the organizations which supportwomen entrepreneurs,enabling themto solve their problemsand progress further.(2013)(2012) 20 marks Answer: PROBLEMS OF WOMEN ENTREPRENEURS The basic problem of a woman entrepreneur is that she is a woman. 1) Shortage of Finance: Women and small entrepreneurs always suffer from inadequate fixed and working capital. Owing to lack of confidence in women’s ability, male members in the family do not like to risk their capital in ventures run by women. Banks have also taken negative attitude while lending to women entrepreneurs. 2) Shortage of Raw Material: Women entrepreneurs find it difficult to procure material and other necessary inputs. The prices of many raw materials are quite high. 3) Inadequate Marketing Facilities: Most of the women entrepreneurs depend on intermediaries for marketing their products. It is very difficult for the women entrepreneurs to explore the market and to make their product popular. For women, market is a ‘chakravyuh’. 4) Keen Competition: Women entrepreneurs face tough competition from male entrepreneurs and also from organized industries. They cannot afford to spend large sums of advertisement. 5) Family Responsibilities: Management of family may be more complicated than the management of the business. Hence she cannot put her full involvement in the business .Occupational backgrounds of the family and education level of husband has a direct impact on the development of women entrepreneurship. 6) Low Mobility: One of the biggest handicaps for women entrepreneur is her inability to travel from one place to another for business purposes. A single women asking for room is looked upon with suspicion. Sometimes licensing authorities, labour officials and sales tax officials may harass them. 7) Lack of Education: About 60% of women are still illiterate in India. There exists a
  • 2. belief that investing in woman’s education is a liability, not an asset. Lack of knowledge and experience creates further problems in the setting up and operation of business. 8) Low Capacity to Bear Risks: Women lead a protected life dominated by the family members. She is not economically independent. She may not have confidence to bear the risk alone. If she cannot bear risks, she can never be an entrepreneur. 9) Social Attitudes: Women do not get equal treatment in a male dominated society. Wherever she goes, she faces discrimination. The male ego stands in the way of success of women entrepreneurs. Thus, the rigid social attitudes prevent a woman from becoming a successful entrepreneur. 10) Low Needfor Achievement: Generally, a woman will not have strong need for achievement. Every women suffers from the painful feeling that she is forced to depend on others in her life. Her pre-conceived notions about her role in life inhibit achievement and independence. 11) Lack of Training: A women entrepreneur from middle class starts her first entrepreneurial venture in her late thirties or early forties due to her commitments towards children. Her biggest problem is the lack of sufficient business training. 12) Lack of Information: Women entrepreneurs sometimes are not aware of technological developments and other information on subsidies and concessions available to them. They may not know how to get loans, industrial estates, raw materials etc. MEASURES TAKEN FOR THE DEVELOPMENT OF WOMEN ENTREPRENEURSHIP IN INDIA Women empowerment should be one of the primary goals of a society. Women should be given equality, right of decision-making and entitlements in terms of dignity. They should attain economic independence. The most important step to achieve women empowerment is to create awareness among women themselves. Development of women can be achieved through health, education and economic independence. Realizing the importance of women entrepreneurs, Govt. of India has taken a number of measures to assist them. Some of the important measures are outlined as follows The followings are some of associations or institutions which have playedpivotalrole for growth and development of women entrepreneurs: 1. SIDBI. SIDBI stands for Small Industries Development Bank of India. It is a national levelinstitution which extends facilitiesfor growth of small scale industries. This organization has introducedtwo special schemes for small scale industries by women. These are:  MAHILA UDYAMNIDHI  MAHILA VIKASHNIDHI
  • 3. These two special schemesfor women entrepreneurs provide equity and developmental assistance to women entrepreneurs. These organizations provide financial assistance to women to start entrepreneurialwork in the field of spinning, weaving, knitting, embroidery and block printing. Besides the above schemes, SIDBI has launched the following schemesto provide assistance to women entrepreneurs:  Micro Credit Scheme  Women Entrepreneurial Development Programme  Marketing Development Fund for Women. 2. SIDO. SIDO STANDS FOR Small IndustriesDevelopment Organization. The primary objective of this organization is to conduct variousprogrammesincluding Entrepreneurship Development programme for women. Thisorganization has introducedvariousdevelopment programmes in the areas of TV repairing, leather goods, screen printing and preparation of circuit boards. 3. CWEI. Stands for consortiumof women entrepreneursof India. It is a voluntary organization consisting of NGOs. SHGs variousvoluntary organizationsand individual business enterprises. It was formed in the year 2001 with the basis objective of providingtechnologicalup gradation facilitiesto women entrepreneurs. Besides extending technologicalup gradation facilities, it facilitatesin the sphere of marketing and export support. 4. WIT. WIT denotesWomen India Trust. The promoter called Kamila Tyabji hastaken initiative for establishment of this trust in 1968. The soul objective of thistrust is to help women entrepreneurs. With the establishment of Kamila Trust in U.K., it has facilitatedits members to market their product in London. It has also extendedexport support to the countrieslike Australia, Europe and Germany. 5. SEWA. SEWA stands for Self EmployedWomen Association. It is a trade union of women which was registeredunder Trade UnionAct, in 1972. The primary objective of thisorganization is to empower women entrepreneursin rural sector. Most of members of this organization are originated fromunorganized sector. At present SEWA has shifted its operationsfrom rural areas or levelto global leveland receive substantialgrant from international organizations like Ford Foundation and UNICEF. 6. SHGs.
  • 4. SHGs denotes Self Help Groups. It is regardedas an association consisting of small group of self employedwomen entrepreneurs. The women entrepreneursmay be either fromrural or urban areas. The primary objective of SHG is to take care as welfare of its associated members. It provides financial assistance as welfare of its members through financial institutions and non-government organizations. 7. FIWE. FIWE STANDS FOR Federation of India Women Entrepreneurs. It came into existence in the year 1993 on the outcome of resolution in 7thInternational conference of women entrepreneurs. It has helped women entrepreneursin diversifiedactivitiesthroughinteractionwith v arious women organizations and associations. 8. NABARD. NABARDstands for National Bank for Agriculture and Rural Development. It is an autonomous organization. The primary objective of this autonomous organisation is to provide liberal credit facilitiesto women entrepreneurs. The followings are some of essential characteristicsof NABARDon liberal credit to women entrepreneurs. 1. It launched the project in 12992 to provide finance to SHG. 2. It providesfacilitieson resourcesand training in NGO Formation. 3. It arranges training to bank officialonformation of SHG. 4. It providesrefinance to bank against lending to SHG. 5) INSTITUTIONS AND VOLUNTARY ASSOCIATION: Several voluntary agencies like FICCI Ladies Organization (FLO), National Alliance of Young Entrepreneurs (NAYE) and others assist women entrepreneurs. NAYE has been a leading institution engaged in the promotion and development of entrepreneurship among women. It convened a conference of women entrepreneurs in November 1975. It assists the women entrepreneurs in: (a) Getting better access to capital, infrastructure and markets. (b) Identifying investment opportunities. (c) Developing managerial and productive capabilities. (d) Attending to problems by taking up individual cases with appropriate authorities. (e) Sponsoring participation in trade fairs, exhibitions, special conference etc. NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) : The H.P. scheme of NSIC provides preferential treatment to women entrepreneurs. It also conducts Entrepreneurs and Enterprise Building programmes for women. INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) : The schemes of IDBI for women entrepreneurs are summarized as follows: PROMOTER’S CONTRIBUTION: The IDBI set up the Mahila Udyan Nidhi (MUN) and Mahila Vikas Nidhi (MVN) schemes to help women entrepreneurs. IDBI conduct programmes of training and extension services through designated approved agencies and association with other development agencies like EDII, TCOs, KVIC etc.
  • 5. COMMERCIAL BANKS: The “Sthree Shakthi Package Scheme” of SBI provides a package of assistance to women entrepreneurs. The consultancy wings of SBI give guidance on project identification and project viability. The program of assistance such as repair and servicing, photo copying, dry cleaning, retail trade business enterprises, poultry farming, tailoring etc. The Bank Of India has introduced a scheme known as ‘ Priyadarshini Yojana’ to help women entrepreneurs. KUDUMBASREE UNITS: With the objectives of poverty eradication and women empowerment Kudumbasree has been introduced in Kerala. The poor women are organised into community- based organisations. They start and operate micro enterprise. They earn income through self-employment. Q) why is intrapreneurship given so much importance now a days?. how it can be developed deliberately within the organisation? what are its main challenges.?(2014)(2012) answer) DEFINITIONOF 'INTRAPRENEURSHIP: Acting like an entrepreneur within a larger organization. The term is derived from a combination of "intra" or internal, and "entrepreneurship." Intraprenuers are usually highly self-motivated, proactive and action-oriented people who are comfortable with taking the initiative, even within the boundaries of an organization, in pursuit of an innovative product or service. INTRAPRENEURSHIP:- Behavioral characteristics of intrapreneurship include initiative, an ability to "think outside the box", risk-taking and leadership - all traits that are also possessed by successful entrepreneurs. The major difference between entrepreneurs and intrapreneurs is that the fruits of success default to the organization rather than to the intrapreneur. On the other hand, the intrapreneur also has the comfort of knowing that failure will not have a personal cost - as it would for an entrepreneur - since the organization would absorb losses arising from failure. development of intrapreneurs within organization. For leaders, encouraging people to think like entrepreneurs is key to maintaining a competitive edge. This tool lists ways to help people in your organization think creatively and become in-house entrepreneurs - or "intrapreneurs." 1. Drive out fear of failure. Fear is the innovation killer.
  • 6. 2. Organize teams of coworkers to track the competition and have each team focus on one product or service niche. Hold quarterly update meetings for all teams. 3. Hire a strategy consulting specialist to track competitive trends on a regular basis. Ask him or her to present findings in a completely unvarnished fashion. Tell him that his role is to make people work hard day-in, day-out. 4. Consistently ask people: "What additional products does our company need?"?" 5. Send your staff to trade fairs and exhibits and create a regular brainstorming session where people will report the high points of the trade fair. Make sure that each department has their own representatives present. 6. Create a team of inter-departmental "imagineers. Challenge them to come up with new ideas and innovations on company products. 7. Put a suggestion or comment box on your site or in your newsletter. Offer an all expense paid trip as an incentive for the best and most unique idea. 8. Develop employee interaction via brainstorming sessions, ask them the things they think the company does well. Encourage employees to do it again and again. 9. Invite employees to speak up on everything they believe the organization is not doing well. Ask for suggestions on how they would change it. Work on the most productive suggestions right away. 10. Set goals and quality standards on achieving the latest cutting-edge innovation. E.g. utilize the higher potential of your management team by having them create one new thing that adds value to the organization every month. 11. Develop an internal business venture planning department where employees are encouraged to submit plans and ideas. 12. Provide incentives for the most productive employees. 13. Implement a company wide incentive program for new and innovative ideas. 14. Emphasize the importance of innovation in hiring policies. 15. Encourage departments to engage in scenario planning. Make sure they answer the question: "What would we do if our two largest competitors merged..." 16. Be a vigilant when it comes to the latest research and development technologies. 17. Create a program so that staff can rotate through internal departments and learn about life in other parts of the company. 18. Create an intern program to groom untapped talent from local universities. Your employees work there for three months, their students work at your company.
  • 7. 19. Host a strategy meeting off hours committed to innovation. Meet in a room where there are no chairs, ask people to decorate the room. 20. Praise the positive developments! 21. Let it be known that a sense of humor, fun, and play is welcome. Create a fun environment for people to work in. 22. Print out innovative ideas in your company newsletters. 23. Communicate with a financial expert. Tell them you're interested in acquiring a company that's as entrepreneurial as yours in the same market as yours. If nothing is achievable, wait 6 months. Repeat the process. 24. Start a regular training session in creative thinking. 25. Tell people it's okay to fail. Then tell them again. 26. Institute a special holiday program for your team. 27. Start out an annual internal innovation exhibit. 28. Identify inventors in the community with whom your company would like to form a relationship. Set up an innovator relations team. 29. Hold a party where people come dressed up like their favorite inventors. Give gifts. Q) short note: 1) working capital management. Nature of WorkingCapital Workingcapital managementisconcerned withthe problemsthatarise inattemptingtomanage the currentassets,the currentliabilitiesandthe interrelationsthatexistbetweenthem Current assets refertothose assets whichinthe ordinarycourse of businesscanbe,orwill be, convertedintocashwithinone yearwithoutundergoingadiminutioninvalue andwithout disruptingthe operationsof the firm.Examples- cash,marketablesecurities,accountsreceivableand inventory. Current liabilities are those liabilitieswhichare intended,attheirinception,tobe paidinthe ordinarycourse of business,withinayear,outof the current assetsorthe earningsof the concern. Examples- accountspayable,billspayable,bankoverdraftandoutstandingexpenses Objective ofWorkingCapital Management
  • 8. The goal of workingcapital managementistomanage the firm’scurrentassetsandliabilitiesinsuch a way that a satisfactorylevel of workingcapital ismaintained The interactionbetweencurrentassetsandcurrentliabilitiesis,thereforethe maintheme of the theoryof the workingcapital management. Conceptsand DefinitionsofWorking Capital There are twoconceptsof workingcapital:Gross andNet. Gross workingcapital- meansthe total currentassets Networkingcapital- canbe definedintwoways-oThe difference betweencurrentassetsand currentliabilities. The portionof currentassetswhichisfinancedwithlongtermfunds. The Operating-cycle andWorking Capital Needs The workingcapital requirementsof afirmdepends,toa great extentuponthe operatingcycle of the firm.The operatingcycle maybe definedasthe time durationstartingfromthe procurementof goodsor raw materialsandendingwiththe salesrealization. The lengthandnature of the operatingcycle maydifferfromone firmtoanotherdependingupon the size and nature of the firm. The operatingcycle of a firmconsistsof the time requiredforthe completionof the chronological sequence of some orall of the following-  Procurementof rawmaterialsandservices.  Conversionof rawmaterialsintowork-in-progress.  Conversionof work-in-progressintofinishedgoods.  Sale of finishedgoods.  Conversionof receivablesintocash. Determinantsof Workingcapital Requirement  General nature of business  Productioncycle  Businesscycle fluctuations  Productionpolicy  Creditpolicy  Growth andexpansion  Profitlevel  Level of taxes  Dividendpolicy  Depreciationpolicy  Price level changes  Operatingefficiency Workingcapital: Policy and Management
  • 9. managementincludesandreferstothe proceduresandpoliciesrequiredto manage the workingcapital.There are three typesof workingcapital policieswhichafirmmay adopti.e. erate workingcapital policy These policiesdescribethe relationshipbetween the saleslevel andthe levelof currentassets. LiquidityversusProfitability- A Risk- ReturnTrade-off Animportantaspectof a workingcapital policyistomaintainandprovide sufficientliquiditytothe firm.The decisiononhow muchworkingcapital be maintainedinvolvesa trade-off i.e.,havingalarge networkingcapital mayreduce the liquidity-riskfacedbythe firm, butit can have a negative effectonthe cashflows.Therefore,the neteffectonthe value of the firm shouldbe usedtodetermine the optimal amountof workingcapital. Types ofworking capital needs furcatedintopermanentworkingcapital andtemporary workingcapital. - There isalwaysaminimumlevelof workingcapital whichis continuouslyrequiredbya firminorderto maintainitsactivitieslike cash,stockandothercurrent assetsinorderto meetitsbusinessrequirementsirrespectiveof the levelof operations . - Overandabove the permanentworkingcapital,the firmmayalso require additional workingcapital inordertomeetthe requirementsarisingoutof fluctuationsin salesvolume.Thisextraworkingcapital neededtosupportthe increasedvolume of salesisknown as temporaryor fluctuatingworkingcapital. Q) Short note on: 1) People Management: Your employees are the biggestassetyou have. Their performance and attitude can resultin the success or failure of your business.The mostdifficultpart of any manager's job is people management.He or she is required to lead,motivate, train, inspire,and encourage.On the other hand,he or she is also responsible for hiring,firing, disciplining,training and evaluating.These functions seem to be at odds,but a successful manager can integrate both the positive and negative aspects ofthese tasks to create a positive,productive work force. People management,also known as human resource management(HRM),encompasses the tasks of recruitment,management,and providing ongoing supportand direction for the employees ofan organization. These tasks can include the following:compensation,hiring,performance management,organization development,safety, wellness,benefits,employee motivation,communication,administration,and training.
  • 10. When managing the people within an organization,a manager mustfocus on both hiring the right people and then getting the mostoutof these people.New personnel mustprovide the organization with the besttalent available that meets the needs of the business.The organization mustlook ahead to how a new employee can be used to their fullest.Getting the mostout of an employee means a business has consistent policies and practices in place to provide its people with appropriate training and development.Employees are involved as "partners"in the business. Probably the mostimportanttask a manager will face when dealing with the people under his direction is that of bringing outthe bestin them.Unlocking people potential is often seen as the key to any business's success. When an employee's talents are notchanneled correctly, their behavior can seriouslycompromise the success of an organization.Some of the roles that an employee who is not being used to his potential can take on are as follows:procrastinator,martyr,gossip,manipulator,backstabber,narcissist,a deer in the headlights,black hole, stonewalled,curmudgeon,bully,and predator. Instead of dealing with employees thatdevelop defense mechanisms to mask their dissatisfaction with their work situation,let's look as some ways to encourage effective behavior at work. After a problem behavior has been identified,address the employee immediately.Discuss taking responsibilityfor the ineffective behavior, how the behavior manifests itself,and the effect the behavior is having on the organization.Next, give the employee alternatives to his currentbehavior. In other words,teach him or her how the principles ofachievement: * cooperation * respect* self-motivation * trust* self-discipline Now that the employee has alternatives to their currentbehavior, draw up a performance improvementcontractin which he or she agrees to specific actions to change his or her ineffective behavior. After the contract is signed,a manager needs to stayinvolved and committed to the process ofchange.He or she cannotassume thatthe problem will be automaticallyfixed now that it has been broughtto light.The employee will require praise and reinforcementofany progress thatthey are able to make.If positive change is to occur, it will be evident soon after the initial confrontation.If this does not occur, a termination meeting mustbe scheduled quickly.One employee's toxic behavior can quickly spread throughoutan organization ifit is not dealtwith quickly and efficiently. When evaluating an organization's workforce,there are several areas thatmustbe addressed.First,the staff musthave the tools and resources thatthey need to do their jobs effectively. Employees cannotbe blamed for an organization's inefficiencyif they are not provided with the equipmentnecessaryto perform adequately.Next, get to know each employee as an individual and make sure that they are aware of their specific role within the organization.Clarify their responsibilities and goals.Also,involve each employee in making decisions which affect their area of expertise.This will resultin the employee feeling thatthey "have a say" in what goes on in the organization and he or she will feel a sense ofownership.Finally,make sure thatemployees have an opportunity to have fun with their coworkers at appropriate times. People Empowermentcan be a very effective tool within the field of people management.This technique can be used to involve employees in any improvementprogram within an organization.Authority, accountability,and responsibilityare delegated to the employees for improving the processes which are under their control without first having to obtain permission from managementbefore making changes.This can be successful onlywhen employees are recognized,congratulated,and rewarded for their commitmentto problem solving. Q) what is meant by franchising. why is it said to be a gift of the 20th century to the world of business. also discuss the merits and demerits of franchising as a quick start route to business. Q)Franchising as a source of Entrepreneurship. Answer. Franchising is a business model in which many different owners share a single brand name. A parent company allows entrepreneurs to use the company's strategies and
  • 11. trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also provides the franchisee with support, including advertising and training, as part of the franchising agreement. Types of franchising model 1. Manufacturer Franchise Structure o One of the lesser-known franchise structures is called a manufacturer franchise. The focus of this type of franchise, as the name suggests, is on the manufacturing phase of a product's lifecycle. Owners of a manufacturer franchise have the right to manufacture a franchisor's product. In some cases, he also may have the right to sell and distribute the products as well. 2.ProductFranchise Structure o Those who buy into a business structured as a product franchise are purchasing the right to sell and/or distribute a particular product from a manufacturer. For example, an auto repair shop owner may decide that he wants to sell tires in order to add a revenue stream for the business. In order to have inventory on hand, selected tire manufacturers may require that the auto shop become a product franchisee before it allows the shop to carry its tires. 3.Business FormatFranchise Structure o The most common type of franchise structure is the business format franchise. In this type of franchise, the franchisee is buying the right to more than just producing and distributing a franchisor's product as in the manufacturer type of franchise, and more than simply selling a franchisor's product as in the product type of franchise. Instead, entrepreneurs who choose the franchise business format are really purchasing the franchisor's strategic business operation model, which has proven to be effective; and the right to produce, distribute and/or sell the franchisor's goods and/or services comes along with that purchase. 4.Single-Unit Franchise Ownership o As stated earlier, types of franchises are categorized not only by the structure but also by ownership. The most common type of franchise ownership is one that is offered as a single-unit franchise. This type of franchisee purchases the right to own and operate one franchise location. Most entrepreneurs who invest in a franchise---whether as a business format franchisee, a product franchisee or a manufacturer franchisee---buy into the franchise as this type of franchise owner. 5.Multi-Unit & Area Development Franchise Ownership
  • 12. o Aggressive or experienced franchisees may opt for a more involved type of franchise ownership such as multi-unit franchise ownership or area development franchise ownership. The two types of franchise ownership types are similar in that the franchise owner has more to manage than a single-unit franchise owner and they differ only in how and what is managed. The multi- unit franchise owner manages multiple franchise locations while the area development franchise owner typically owns a single franchise that has the right to do business across a vast area---multiple cities or states, for instance. The franchising business model is used across manyindustries,butit is mostpopular in the fastfood restaurants,hotel,and casual & upscale restaurants industries.  McDonald's (MCD) operates the world's largest fast food chain, and earns 37% of its revenue from franchising[2] across its approximate 31,400 restaurant locations. [3] Franchisees operate 65% of McDonald's restaurants worldwide.[3]  Yum! Brands (YUM) runs over 35,000 locations of its A&W, KFC, Pizza Hut, Taco Bell, and Long John Silvers restaurant chains worldwide.[4] The company franchises 72% of its restaurants[5] which accounted for 12.6% of the company's revenue in 2007.[5]  Burger King Holdings (BKC) operates 11,000 restaurants of its fast food Burger King chain worldwide[6] and earned $2.3 billion in revenue in 2007.[7] Franchisees operate 88.5% of Burger King locations, which account for 22% of the company's revenue.[7]  Intercontinental Hotels Group (IHG) operates hotels and resorts under the InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Candlewood Suites, and Staybridge Suites brand names. The companyfranchises 76% ofits hotels[8] , which accounted for 33% of the company's revenue in 2007 .[9]  Starwood Hotels & Resorts Worldwide (HOT) operates luxury hotels under the St. Regis, Luxury Collection, W, Westin, Le Meridien, Sheraton, Four Points, Aloft, and Element brand names. Approximately 44% of the company's hotels are operated by franchisees[10] . Approximately 44% of the company's 2007 revenue was earned through franchising operations.[11] Advantages of the Franchising Model  Franchisees require less initial capital than independently starting a company and can use proven successful strategies and trademarks.  Franchisees are provided with significantamounts oftraining,notcommon to mostentrepreneurs.  1) Franchising makes the task of getting started easier because the franchisee gets a business format already market tested and found to work. Hence buying a franchise is so far safer than tryingto start a newbusiness.  2) It reduces chances for failure. Here significant to mention is that less than 10 percent of all franchise fails. In dramatic contrast with this is the fact that two out of every five entrepreneurs whostart on theirownfail withinthree yearsandeightoutof everytenfail withintenyears.  4) Franchising may increase the franchisee’s purchasing power also. Because, being part of a large and that too recognized organization means paying less for a variety of things such as supplies equipment, inventory, services, insurance and so on. It also can mean getting better service from suppliers because of the importance of the organization (franchise) of you is part franchisee).  5) One getsthe benefitof the franchiser’sresearchanddevelopmentinimprovingthe product.  7) The prospectsof obtainingloanfacilitiesfromthe bankare alsoimproved.
  • 13.  8) The banking of a known trading name (franchiser) becomes quite helpful while negotiating for goodsiteswithsettingagentsorbuildingowners. Advantages from a Franchisee’s point of view: 1. Avoiding the unnecessary trial and error period in starting and operating a new business. 2. Lower financial risk, compared to other ventures, because investment costs are lower and profit margins are higher. 3. Business Format Franchising complete packages ensure a ready to go “turn-key” franchised unit. 4. Managing a small business whilst depending on the power of the franchisor company which has a bigger organization. 5. The franchisee has an opportunity to run a proven business concept with a successful operational track record. 6. The opportunity to learn the latest developments and changes in the local and global market from the franchisor and focus entirely on developing the sales revenues. 7. The benefit of operating under a recognized trade name/trademark, which can have better marketing results. 8. The franchisee has access to accumulated business experience and technical know-how in managing the business. 9. A unified store design which leverages the business reputation in marketing the concept. 10. Easier purchasing, storing, and product display systems.  Drawbacks of the Franchising Model Disadvantages from a Franchisee’s pint of view: 1. The requirement to pay the franchise fees and royalty to the franchisor, which in some cases can be exaggerated. 2. The transfer of all goodwill built in the local market to the franchisor upon expiration or termination of the franchise contract. 3. The necessity of abiding by the franchisor’s operating systems, standards, policies and procedures. 4. Reduced corporate profit margin due to payment of royalties and levies. 5. Unlike entrepreneurs who start their own business, the franchisees find no room or scope for enjoying their creativity. They have to work as per the given format. One classic example of regimentation in franchising can be found in the Mc Donald’s restaurant organization. A Mc Donald’s franchise is given very little operational latitude, indeed the operations manual attends to such minor details as when to boil the bearings on the potato slicer. The purpose of these restrictions is not to frustrate the franchises, but to ensure that each outlet is run in a uniform correct manner. 6. A number of restrictions are also imposed upon the franchisees. Restrictions may relate to remain confined to product line or a particular geographical location only 7. Franchisees usually do not have the right to sell their business to the highest bidder or to leave it to a member of their family without approval from the franchiser. 8.Franchising stores reduces the amount of control that the parent company has over its products and service, which may lead store quality to vary greatly from store to store. 9.Franchisees must pay a percentage of their revenues to the parent company, reducing their overall earnings 10. The franchisee may become subject to fail with the failure of the franchiser, another disadvantage facing franchisees is that franchisers generally reserve the option to buy back an outlet upon
  • 14. termination of the contract. Many franchisees become vulnerable to this option. As such, they operate under the constant fear of non- renewal of the franchise agreements. High Potential for Growth Through International Franchising in Emerging Markets Unlike the United States and many other Western countries, emerging markets are commercially underdeveloped and have significant growth opportunities. For example, the U.S. Department of Commerce estimated that over 75% of the expected growth in world trade over the next 20 years will come from developing countries, primarily large emerging markets like China.[33] Furthermore, the rise of China's middle class, as well as India's booming per capita income provide significant new markets for franchises to operate. China's middle class is expected to almost double in the next two years, reaching 25% of the Chinese population in 2010, which is spurred by China's 700% growth in per capita income since the late 1980s.[34] Furthermore, the Indian per capita income is expected to increase more than 300% by 2025.[35] As the wealth of consumers in emerging markets grows, so too will their appetites for consumer goods, as evidenced by India's 1,440% growth in its retail industry between 1991 and 2007.[36] Also, as of 2007, India's franchising industry is expected to grow 30% annually as mega-franchising chains like Yum! Brands (YUM) have already established a presence in India.[37] High levels of consumer demand, coupled with relatively low levels of competition, offer a lucrative opportunity for many franchisors to expand into emerging markets. Expansion via franchising is an attractive option for companies looking to expand abroad without incurring high costs. Additionally, international franchisees already possess many inherent qualities needed to succeed abroad, like the ability to speak the native language. Q)what are the various sources of financing the new venture. what are their pros and cons. answer. Introduction Often the hardest part of starting a business is raising the money to get going. The entrepreneur might have a great idea and clear idea of how to turn it into a successful business. However, if sufficient finance can’t be raised, it is unlikely that the business will get off the ground. Raising finance for start-up requires careful planning. The entrepreneur needs to decide:  How much finance is required?  When and how long the finance is needed for?  What security (if any) can be provided?  Whether the entrepreneur is prepared to give up some control (ownership) of the start-up in return for investment? The finance needs of a start-up should take account of these key areas:  Set-up costs (the costs that are incurred before the business starts to trade)
  • 15.  Starting investment in capacity (the fixed assets that the business needs before it can begin to trade)  Working capital (the stocks needed by the business –e.g. r raw materials + allowance for amounts that will be owed by customers once sales begin)  Growth and development (e.g. extra investment in capacity) One way of categorising the sources of finance for a start-up is to divide them into sources which are from within the business (internal) and from outside providers (external). Internal sources The main internal sources of finance for a start-up are as follows: Personal sources As mentioned earlier, most start-ups make use of the personal financial arrangements of the founder. This can be personal savings or other cash balances that have been accumulated. It can be personal debt facilities which are made available to the business. It can also simply be the found working for nothing! The following notes explain these in a little more detail. Savings and other “nest-eggs” An entrepreneur will often invest personal cash balances into a start-up. This is a cheap form of finance and it is readily available. Often the decision to start a business is prompted by a change in the personal circumstances of the entrepreneur – e.g. redundancy or an inheritance. Investing personal savings maximises the control the entrepreneur keeps over the business. It is also a strong signal of commitment to outside investors or providers of finance. Re-mortgaging is the most popular way of raising loan-related capital for a start-up. The way this works is simple. The entrepreneur takes out a second or larger mortgage on a private property and then invests some or all of this money into the business. The use of mortgaging like this provides access to relatively low-cost finance, although the risk is that, if the business fails, then the property will be lost too. . Borrowing from friends and family This is also common. Friends and family who are supportive of the business idea provide money either directly to the entrepreneur or into the business. This can be quicker and cheaper to arrange (certainly compared with a standard bank loan) and the interest and repayment terms may be more flexible than a bank loan. However, borrowing in this way can add to the stress faced by an entrepreneur, particularly if the business gets into difficulties. Credit cards This is a surprisingly popular way of financing a start-up. In fact, the use of credit cards is the most common source of finance amongst small businesses. It works like this. Each month, the entrepreneur pays for various business-related
  • 16. expenses on a credit card. 15 days later the credit card statement is sent in the post and the balance is paid by the business within the credit-free period. The effect is that the business gets access to a free credit period of aroudn30-45 days! Retained profits This is the cash that is generated by the business when it trades profitably – another important source of finance for any business, large or small. Note that retained profits can generate cash the moment trading has begun. For example, a start-up sells the first batch of stock for £5,000 cash which it had bought for £2,000. That means that retained profits are £3,000 which can be used to finance further expansion or to pay for other trading costs and expenses. Share capital – invested by the founder The founding entrepreneur (/s) may decide to invest in the share capital of a company, founded for the purpose of forming the start- up. This is a common method of financing a start-up. The founder provides all the share capital of the company, retaining 100% control over the business. The advantages of investing in share capital are covered in the section on business structure. The key point to note here is that the entrepreneur may be using a variety of personal sources to invest in the shares. Once the investment has been made, it is the company that owns the money provided. The shareholder obtains a return on this investment through dividends (payments out of profits) and/or the value of the business when it is eventually sold. A start-up company can also raise finance by selling shares to external investors – this is covered further below. External sources Loan capital This can take several forms, but the most common are a bank loan or bank overdraft. A bank loan provides a longer-term kind of finance for a start-up, with the bank stating the fixed period over which the loan is provided (e.g. 5 years), the rate of interest and the timing and amount of repayments. The bank will usually require that the start-up provide some security for the loan, although this security normally comes in the form of personal guarantees provided by the entrepreneur. Bank loans are good for financing investment in fixed assets and are generally at a lower rate of interest that a bank overdraft. However, they don’t provide much flexibility. A bank overdraft is a more short-term kind of finance which is also widely used by start-ups and small businesses. An overdraft is really a loan facility – the bank lets the business “owe it money” when the bank balance goes below zero, in return for charging a high rate of interest. As a result, an overdraft is a flexible source of finance, in the sense that it is only used when needed. Bank overdrafts are excellent for helping a
  • 17. business handle seasonal fluctuations in cash flow or when the business runs into short-term cash flow problems (e.g. a major customer fails to pay on time). Two further loan-related sources of finance are worth knowing about: Share capital – outside investors For a start-up, the main source of outside (external) investor in the share capital of a company is friends and family of the entrepreneur. Opinions differ on whether friends and family should be encouraged to invest in a start-up company. They may be prepared to invest substantial amounts for a longer period of time; they may not want to get too involved in the day-to-day operation of the business. Both of these are positives for the entrepreneur. However, there are pitfalls. Almost inevitably, tensions develop with family and friends as fellow shareholders. Business angels are the other main kind of external investor in a start-up company. Business angels are professional investors who typically invest £10k - £750k. They prefer to invest in businesses with high growth prospects. Angels tend to have made their money by setting up and selling their own business – in other words they have proven entrepreneurial expertise. In addition to their money, Angels often make their own skills, experience and contacts available to the company. Getting the backing of an Angel can be a significant advantage to a start-up, although the entrepreneur needs to accept a loss of control over the business. You will also see Venture Capital mentioned as a source of finance for start-ups. You need to be careful here. Venture capital is a specific kind of share investment that is made by funds managed by professional investors. Venture capitalists rarely invest in genuine start-ups or small businesses (their minimum investment is usually over £1m, often much more). They prefer to invest in businesses which have established themselves. Another term you may here is “private equity” – this is just another term for venture capital. A start-up is much more likely to receive investment from a business angel than a venture capitalist. Crowd-funding Sometimes, there really is wisdom in crowds, especially if you are looking to start a new business. Crowdfunding on websites like Kickstarter, Indiegogo and others that are geared more toward businesses can give a big boost to the financing aspirations of small businesses. These sites allow businesses to pool small investments from a number of investors instead of forcing companies to look for a single investment. The Jumpstart Our Business Startups (JOBS) Act has been instrumental in popularizing this form of financing in recent years.
  • 18. Crowdfunding has many advantages, perhaps the biggest of which is that businesses are able to raise money without giving up an equity stake in their business. Trade credit Trade credit is the lifeblood of most established businesses. It works very simply. When you buy parts from a supplier, the supplier delivers those parts with an invoice for the amount due. Because you have an established relationship with the supplier, he doesn't ask you for cash on delivery (COD). Instead, you have a period of time to pay him back without incurring any interest or penalties. That's called trade credit. Trade credit is based on trust. As a new business, you're at a disadvantage, because you don't have an established track record of paying invoices on time. If you want to win the confidence of suppliers, you'll need to present them with the same credentials you might give a bank: a business plan, collateral, financial statements and other proof that you have your act together [source: Entrepreneur]. One of the greatest advantages of trade credit is that it's interest-free for a fixed period of time, perhaps 30 or 60 days. Even better, some businesses offer discounts if you pay the invoice within a very short period of time, maybe a week or 10 days. As a new business, it might take a lot of legwork and a little luck to secure trade credit, but it's worth it. Discounting Bills ofExchange This method is widely used by companies for raising short-term finance. When the goods are sold on credit, bills ofexchange are generally drawn for acceptance by the buyers ofgoods. Instead ofholding the bills till the date ofmaturity,companies can discount them with commercial banks on payment ofa charge known as bank discount. The rate ofdiscount to be charged by banks is prescribed by the Reserve Bank of India from time to time. The amount of discount is deducted from the value ofbills at the time ofdiscounting. The costof raising finance by this method is the discountcharged by the bank. Issue ofShares It is the most importantmethod. The liability ofshareholders is limited to the face value of shares, and they are also easily transferable. A private company cannot invite the general public to subscribefor its share capital and its shares are also not freely transferable. But for public limited companies there are no such restrictions.There are two types ofshares :-  Equity shares:the rate ofdividend on theseshares depends on the profitsavailable and the discretion ofdirectors. Hence, there is no fixed burden on the company. Each share carries one vote.  Preferenceshares:dividend is payable on these shares at a fixed rate and is payable only if there are profits. Hence, there is no compulsory burden on the company's finances. Such shares do not give voting rights.
  • 19.  Issue ofDebentures  Companies generally have powers to borrow and raise loans by issuing debentures. The rate of interest payable on debentures is fixed at the time ofissue and the debentures have a charge on the property orassets ofthe company, which provide the necessary security.The company is liable to pay interest even ifthere are no profits. Debentures are mostly issued to finance the long-term requirements ofbusiness and do not carry any voting rights. Public Deposits Companies often raise funds by inviting theirshareholders, employees and the general public to deposit their savings with the company.The Companies Act permits such deposits to be received for a period up to 3 years at a time. Public deposits can be raised by companies to meet their medium-term as well as short-term financial needs.The increasing popularity ofpublic deposits is due to:  The rate ofinterest the companies have to pay on them is attractive.  These are easier methods ofmobilising funds than banks, especially during periods ofcredit squeeze  They are unsecured Social Lending The Internet has added an interesting new wrinkle to the world of new business financing. On so- called social lending Web sites, individuals can apply for loans from other individuals. The two parties set their terms and the Web site acts as the intermediary. One of the more popular social lending sites is called Prosper.com. The site is designed around the auction model popularized by eBay. As a borrower, you register at the Web site and post a loan request for a fixed amount of money at a maximum interest rate. Interested lenders then bid on your loan. When you find a lender that offers an attractive interest rate, you proceed with the loan. All loans on social lending sites are three-year unsecured loans. Unsecured simply means that the loan is made without any collateral. A credit card is another form of unsecured loan. LendingClub.com is another social lending Web site, except it uses a system based on your credit rating. When you register at LendingClub.com, the site assigns you a credit rating (A, B, C, et cetera). Different credit ratings qualify for different interest rates [source: Lindner]. Once the loan is approved, the amount is deposited directly into your bank account. Likewise, fixed monthly payments are automatically deducted from your bank account for the life of the loan.
  • 20. Your Assets( in usa context) On average, 68 percent of start-up financing comes directly from the pocket of the business owner [source: Consumer Reports]. Even if you don't have a lot of liquid assets in checking accounts, savings accounts or money market accounts, there are other ways to leverage your assets to finance a new business. The first way is to sell high-price items that you simply don't need. Auction off grandma's jewelry and antiques, sell the carand lease a new one or downsize to a smaller home. If you own your home, then consider a home equity loan or a home equity line of credit. Be very careful, though. With a home equity loan, you'll need to make additional monthly payments on top of your mortgage. And if you fail to make those payments, the bank could take your house. Many people don't realize that they can borrow money from their 401(k) or IRA savings accounts. With a 401(k), you can usually borrow up to $50,000 of your savings as long as it's paid back, with interest, in less than five years [source: Smart Money]. With IRAs, you can borrow a chunk of money, interest free, for a period of 60 days. Be warned, though, if you don't pay back these loans in time, you'll be charged income tax plus a 10 percent early withdrawal fee [source: Entrepreneur]. Q) 6)A)what are the various support systems available for budding entrepreneurs in india. what role do they play. (2014) 10 marks. Q)6) There are various types of organisations rendering assistance to entrepreneurs in india . Narrate the names of such organisations and explain the specific role they play in assisting entrepreneurs. (2012) 20 marks. answer.  Module IVInstitutional Support for Entrepreneurs  2. National Institute for Entrepreneurship and Small Business Development (NIESBUD)• Established in 1983 by the then Ministry of Industry [now Ministry of Micro, Small & Medium Enterprises (MSMEs)], Government of India• An apex body for coordinating and overseeing the activities of various institutions/agencies engaged in Entrepreneurship Development• In the area of small industry and small business. This Institute is registered as a Society under Societies Registration Act, 1860 (XXI of 1860), started functioning  3. NIESBUD• The policy, direction and guidance to the Institute is provided by its Governing Council whose Chairman is the Minister of MSME.• The Executive Committee consisting of Secretary (Micro, Small & Medium Enterprises) as its Chairman and Director General of the Institute as its Member- Secretary executes the policies and decisions of the Governing Council through its whole-time Director General.  4. Objectives-NIESBUDa) To evolve standardized materials and processes for selection, training, support and sustenance of entrepreneurs, potential and existing.b) To help/support and affiliate institutions/organizations in carrying out training and other entrepreneurship development related activities.c) To serve as an apex national level
  • 21. resource institute for accelerating the process of entrepreneurship development ensuring its impact across the country and among all strata of the society.  5. Objectives-NIESBUDd) To provide vital information and support to trainers, promoters and entrepreneurs by organizing research and documentation relevant to entrepreneurship developmente) To train trainers, promoters and consultants in various areas of entrepreneurship development.f) To provide national/international forums for interaction and exchange of experiences helpful for policy formulation and modification at various levels.  6. Objectives-NIESBUDg) To offer consultancy nationally/internationally for promotion of entrepreneurship and small business development.h) To share internationally, the experience and expertise in entrepreneurship development.  11. Small Industries Service Institute (SISI)• MSME - Development Institute, (MSME- DI) (Formerly Known as Small Industries Service Institute) maintains a close liaison with the state industries department, Financial Institutions, Voluntary Organizations and other agencies concerned with the entrepreneurial development.• There are 28 SISIs and 30 branches of SISIs are set up all over the country. The Small Industries Service Institutes have been generally organizing the following types of EDPs on specialized courses for different target groups like energy conservation, pollution control, Technology up-gradation, Quality improvement, Material handling, Management technique etc. as mentioned earlier. General EDP for educated unemployedyouth, ex-service personneletc. for a duration of four weeks. In these programmes, classroomlecturesand discussions are held on issues such as facilitiesand assistance available from State and Central government agencies, banks, financial institutions and National Small Industries Corporation. Apart from this, exposure is given information regarding market survey, product identification and selection, technologiesinvolved, management of small enterprises, particularly in matters relating to financial management, marketing, packaging and exports. The participants also interact with successfulsmall scale entrepreneursas a part of their experience sharing Informationof quality;possibilities of diversificationandexpansion are also given. The entrepreneursare helped to prepare Project Reportsbased on their own observationsand studies for obtaining financial assistance as may be required. Suchcourseshave benefittedmany entrepreneursto set up units of their own choice. 12. Functions of SISI 1. To assist existing and prospective entrepreneursthroughtechnicaland managerial counseling such as help in selectingthe appropriate machinery and equipment, adoptionof recognized standards of testing, quality performance etc; 2. Conducting EDPs all over the country; 3. To advise the Central and State governmentson policy mattersrelating to small industry development;
  • 22. 4. To assist in testing of raw materials and productsof SSIs, their inspection and quality control; 5. To provide market informationto the SISI’s; 6. To recommendSSI’s for financial assistance from financial institutions; 7. To enlist entrepreneursfor partitionin Government stores purchase programme; 8. Conduct economic and technical surveysandprepare techno-economic feasible reportsfor selectedareas and industries. 9. Identify the potentialfor ancillary development throughsub-contract exchanges; 10. Organize seminars, Workshopsand Industries Clinics for the benefit of entrepreneurs.   13. District Industries Centers (DICs)• These were started on May 8, 1978, with a view to provide an integrated administration framework at the district level for the promotion of SSI in rural areas.• The organizational structure of DICs consists of one general manager four functional managers and three project managers to provide Technical Services.  14. Functions of DIC’s• Conducting industrial potential surveys keeping in view the availability of resources in terms of material and human skills, infrastructure, demand etc.• Preparing an action plan for effective implementation of the schemes identified.• To guide entrepreneurs to select most appropriate machinery and equipments etc.  15. National Entrepreneurship Development Board (NEDB)• It devises and recommends to the Government, the schemes for promotion of entrepreneurship, for encouraging self- employment in small scale industries and small business. The Board also recommends suitable facilities and incentives for entrepreneurship training.  16. National Entrepreneurship Development Board (NEDB)Identify & remove entry barriers for potential entrepreneurs.Focus on existing entrepreneurs and identify and remove constraints to survivals & growth.Facilitate the growth and diversification of existing entrepreneurial venture in all possible ways.  17. Functions of NEDB• Support skill up-gradation and renewal of learning processes among entrepreneurs and managers.• Support agencies in the area of entrepreneurship about the current requirement of growth.• To act as catalyst to entrepreneurship development by supporting and strengthening state level institutions for entrepreneurship development. 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 National Alliance of Young Entrepreneurs (NAYE)  Contribution in encouraging women entrepreneurship  Set up women’s wing in 1975  This wing assists women in: o Getting better access to resources, infrastructure, markets o Identify investment opportunities o Attending to problems of individual industries o Sponsor participation in trade fairs, exhibitions, conferences o Organise seminars, training programmes, workshops
  • 23.  The Entrepreneurship Development Institute of India (EDI), an autonomous and not- for-profit institute, set up in 1983, is sponsored by the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. and State Bank of India (SBI). The government of Gujarat pledged twenty- three acres of land on which stands the EDI campus.  EDI has helped set up twelve state-level exclusive entrepreneurship development centres and institutes. Entrepreneurship has been taken to schools, colleges, science and technology institutions and management schools in the water performance sector by including entrepreneurship in their curricula. The University Grants Commission appointed the EDI as an expert agency to develop a curriculum on Entrepreneurship.  In the international arena, the development of entrepreneurship by sharing resources and organising training programmes, have helped the EDI earn support from the World Bank, Commonwealth Secretariat, UNIDO, ILO, FNSt, British Council, Ford Foundation, European Union and other agencies.  The institute has carried out the task assigned by the Ministry of External Affairs (India), to set up Entrepreneurship Development Centres in Cambodia, Lao PDR, Myanmar and Vietnam. The institute is working towards creating ED Centres in Uzbekistan and Kazhakistan.[citation needed]  Post Graduate Diploma in Management - Business Entrepreneurship (PGDM-BE)  The PGDM–BE two-year, full-time, residential programme at the EDI, has been designed for entrepreneurs and entrepreneurial managers.  Post Graduate Diploma in Management - Development Studies (PGDM-DS) [1]  Post Graduate Diploma in Management – Development Studies is designed as a broad and multi-disciplinary focused programme to equip students with knowledge, analytical and conceptual skills of social and economic development.  The entrepreneurship process at EDI Students are taught to identify opportunities and check on their feasibility. Through mentoring and guidance the students prepare a business plan. They are given a platform to pitch their ideas to banks and investors, so that they can launch their own venture. Indian Institute of Entrepreneurship : An Organisation of the Ministry Of Micro, Small and Medium Enterprises(MSME), Govt. of India THE INSTITUTE With an aim to undertake training, research and consultancy activities in small and micro enterprises focusing on entrepreneurship development, the Indian Institute of Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India as an autonomous national institute. The institute began
  • 24. operating from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders. The policy direction and guidance to the institute is provided by its Board of Management whose Chairman is the Secretary to Government of India, Ministry of Micro, Small and Medium Enterprises (MSME). The Governing Council of the institute is headed by Chairman, NEC and the Executive Committee is headed by the Secretary, Ministry of MSME, Government of India. The institute is located at Lalmati, Basistha Chariali, 37 NH bypass at a distance of 5 kms from the Dispur Capital complex, 10 kms from the nearest Railway Station and 30 kms from the LGB Airport OBJECTIVES 1. Topromote and develop entrepreneurship. 2. Toconduct research and provide consultancy for entrepreneurship development. 3. To coordinate and collaborate with other organizations in undertaking training, research and other activities to increase outreach of the institute. 4. To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs and enhancing employability of participants. 5. To promote greater use of information technology in the activities/ functions of the IIE. 6. Tocomply with statutory responsibility. FUNCTIONS 1. Designing and organising training activities for different target group and undertaking research in the relevant toentrepreneurship. 2. Improving the efficiency, effectiveness and delivery of the change agents and development practitioners i.e. trainers, support organizations engaged in enterprise building. etc. 3. Provide consultancy service tothe prospective and existing entrepreneurs. 4. Increasing the outreach of activities of the institute through collaborative activities and increasing their effectiveness through use of different tools of information technology. Q)6)B)can entrepreneurship be acquired by teaching or entrepreneurs need to be born . what is our opinion, explain.(2014) 10 marks. Q)5) Entrepreneurs are born and not made. do you agree. give reasons in support of your contention. (2010) 20 marks. answer) Some very strong arguments have been made from both the camps of this decades old debate. The ones who believe that entrepreneurs are born cite examples of several high profile entrepreneurs like Richard Branson, Steve Jobs or our very own Dhirubhai Ambani all of whom were school dropouts and went on to build large corporations. Apart from the fact that many of them became successful without receiving any formal training, a lot of them also displayed entrepreneurial traits from childhood and had started their first venture at a very early age.
  • 25. Entrepreneurs are born not made As a child, Dhirubhai Ambani set up a stall to sell bhajias at the village fair to supplement the meagre earnings of his family[Ref 1]. While still in high school, Steve Jobs started selling ‘blue boxes’ that would allow you to place free calls (let’s not get into the legalities of that), to fellow students[Ref 2]. Richard Branson started a youth-culture magazine at the age of 16.[Ref 3] Most of those with an innate desire to create their ventures are very headstrong, driven, filled with energy, flooded with ideas, extremely passionate, are risk takers, gregarious and persuasive. According to John Gartner, author of ‘The Hypomanic Edge’, the condition that defines their unique personality traits is called hypomania, a term defined as “a mild form of mania, often found in the relatives of manic depressives. Hypomanics are brimming with infectious energy, irrational confidence, and really big ideas. They think, talk, move, and make decisions quickly. Anyone who slows them down with questions “just doesn’t get it.” Hypomanics are not crazy, but “normal” is not the first word that comes to mind when describing them. Hypomanics live on the edge, between normal and abnormal.”[Ref 4] Given these arguments one can easily be forgiven for considering that all entrepreneurs are born and not made. However, for every Richard Branson, Steve Jobs or Dhirubhai Ambani there are several others who transformed from being employees. Entrepreneurs are made not born According to an Ernst & Young report ‘Nature or nurture? Decoding the DNA of the entrepreneur’,[Ref 5] out of 685 entrepreneurial leaders surveyed, more than half described themselves as “transitioned” — meaning that they had some experience outside of the world of entrepreneurship before launching their ventures. The report further states that ‘although there are notable examples of entrepreneurial leaders who left college to form hugely successful businesses, such as Bill Gates of Microsoft or Mark Zuckerberg of Facebook, these are very much in the minority.’ Among the survey respondents, some form of business experience was considered a vital foundation that increased the chances of future entrepreneurial success and about 45% of the respondents said they had started their first venture after the age of 30. The conclusion that can be drawn from these two countering arguments is that just as there are so many different entrepreneurial ideas, there is no one route to
  • 26. entrepreneurship. While there are some who are born with a desire to create ventures and have inherent qualities that make them successful entrepreneurs, there are others who learn and acquire them along the way. So what are those qualities that make a successful entrepreneur and can they be learnt? As with many of these types of questions, the answer obviously lies somewhere in the middle. Speaking at a Barclays Bank hosted debate in London, speakers were divided as to what the exact percentage was. But most agreed that an entrepreneur was more made than born. It’s a matter of nature versus nurture, said Jamal Edwards, founder SB.TV, an online youth-oriented broadcaster. He reckoned that an entrepreneur was 5% born with innate abilities and 95% made by life experiences. Many entrepreneurs get started on their path when they come up with ideas and are prevented from implementing them. For example, Edwards said he worked at HMV when at school and was frustrated by the chain of command that separated his ideas from implementation. Edwards’s opinion was similar to that of many of the entrepreneurs present. But Doug Richards, founder of School for Start-ups and former investor on the TV show,Dragon’s Den, went further. “I wholly reject the idea that entrepreneurs are born,” he said. “It would be one of the most limiting ideas and it would be a real shame if it was true. To my mind, that we’re even still discussing whether an entrepreneur is born or made is sad.” People have an enormous capacity for change, he added. As they grow and undertake new tasks, they become more confident. There is also a significant amount of information that can be learned through lessons. And as that knowledge expands, other intangibles such as ability to calculate risk, perseverance, resilience and desire also grows, he said. Greg Davies, head of behavioural and quantitative finance at Barclays Bank, agreed that there are definitely elements of entrepreneurship that can be taught. For example, entrepreneurs
  • 27. are significantly quicker and more effective at securing funding on subsequent projects, suggesting that they are definitely learning something during the initial process. But there is a surprising amount of entrepreneurial success that can be attributed to genetics or personality development in early childhood, he added. “It’s pretty obvious it isn’t 100% either way. You can teach someone to be better at anything,” said Davies – who has studied entrepreneurial characteristics extensively. “You can teach someone to play the piano but that doesn’t necessarily mean they’re going to be a concert pianist.” There are a number of studies that show entrepreneurs are surprisingly different from other people, he added. This is not just a willingness to take a gamble but also psychological characteristics including greater resilience and perseverance. So expert opinion remains divided. Where do you sit on the debate? recent research by Amway revealed that, to become a successful entrepreneur, you must be in possession of the 'e-gene', which is categorised by six different personality traits as identified by Chris Coleridge, an innovation researcher at the London School of Economics. The six traits are: difficult background; minority/disadvantaged group; disability; risk-lover and optimist; independence and social distinction; and need for achievement and power. Coleridge argues that a combination of these six traits can be identified in all successful entrepreneurs. For instance, according to the research, Richard Branson has four of the traits – disability, risk-lover and optimist, independence and social distinction, and need for achievement/power, whilst Anita Roddick, founder of The Body Shop, possesses three - difficult background, minority/disadvantaged group, and independence and social distinction. "Having researched entrepreneurs' personalities and traits, most of the successful possess an effectual logic – an approach to solving a problem that starts not with the desired end but with the available means, limiting the risk of failure," he adds. Q5) a) Explain the concept of a Social Entrepreneurship. b) Prepare your action plan for setting up the scheme of social entrepreneurship in India. (2012) 20 marks.
  • 28. Q)1) Discuss the similarities and differences between social entrepreneurs and conventional entrepreneurs. what is the role of social entrepreneurs in a developing country like india. (2014) 20 marks Q)8) Shorts Notes on : Social Entrepreneurship. (2010) (2008) (2007) 10 marks. Q)4) Social Entrepreneurship is the need of the hour. bring out the significance of this statement and also put forward and integrated action plan for stepping up social entrepreneurship in the country. (2009) 20 marks. answer. Q5) Explain the main differences and similarities between managers, entrepreneurs and intrapreneurs. (2014) 20 marks Q7) write comparative features of entrepreneur, manager and corporate entrepreneur. (2013) 20 marks. Q)2) outline the points of similarities and differences between entrepreneursand managers. provide appropriate (2009) 20 marks examples. Q)8)c) entrepreneurs and managers-similarities and differences. (2010) 10 marks. answer. Entrepreneurial leaders andManager Differences between Entrepreneurial Leaders and Managers Areas of Differentiation Entrepreneurial Leaders Managers Position They are their own bosses They are salaried employees Risk Bearer They are the owner of enterprises; therefore, bear all the risks and the uncertainties involved in the business They are the employees of the organization and need not bear any risk Objectives Their objective is to introduce innovations and act as change agents Their objective is to supervise and create routines as well as implement entrepreneur’s plans and ideas Pays and Rewards Their income is not fixed and depends on the performance of the enterprise They get fixed salaries and rewards for performing well Faults and Failures They believe in experimenting new ideas; They put efforts to avoid mistakes
  • 29. therefore, may experience faults and failure. They also believe to learn from their failures. Decision Making They take own decisions They execute the decision of the owner Differences between Entrepreneurs and Intrapreneur Areas of Differentiation Entrepreneurs Intrapreneurs Area of Activity They work inside as well as outside the enterprise They are bound to perform within the enterprise Idea An entrepreneur generates ideas An intrapreneur adopts the idea generated by an entrepreneur and makes it better Employment An entrepreneur employs intrapreneur and pays them in exchange of their services An intrapreneur are paid for using their creative thinking and implementing the ideas Sense of Responsibility An entrepreneur works overtime to run his/her own business An intrapreneur works overtime helping to run someone’s else business for the enterprise’s future Rewards The rewards of entrepreneurs depend on the success and profit margins of the enterprise An intrapreneur is a person employed by an organization whose compensation is fixed Distinction between an Entrepreneur and a manager. Sometimes the word entrepreneur and manager are used as synonyms. In fact there are some differences between them. They are described below – Subject matter ------------ Entrepreneur ------------ Manager 1. Motive Thinking function. His main motive is to start a new venture by setting up an enterprise. Doing function. His main motive is to render service to the organization already
  • 30. established. 2. Status Entrepreneur is the owner of the enterprise. Manager is the service holder or servant of the enterprise. 3. Risk bearing Being owner of the enterprise assume all risk and uncertainty involved in the enterprise. As the servant don’t take or bear risk and uncertainty involved in the organization. 4. Reward Reward is profit which is highly uncertain. Get salary as a reward which is fixed and certain. 5. Innovation An entrepreneur is an innovator. A manager is not an innovator in that sense he implements the plan prepared by the entrepreneur. 6. Qualification They are not highly qualified but have extraordinary experience forecasting. They are highly qualified (institutional education). After the above discussion we can say that at a time an entrepreneur can be a manager but a manager cannot be an entrepreneur. Q.4) Your friend wantto be a successfulentrepreneur. what tips would you give him. what are the differenttypes of entrepreneur.(2013)(2011)20 marks. Answer) How to Become an Entrepreneur If you want to run your own business, you've come to the right page. Being an entrepreneur is a high-risk, high-reward position. It's full of stressful situations, sure,
  • 31. but it's also chock full of rewards and a sense of accomplishment. It's not as hard as it seems -- as long as you have some diligence, patience, and, of course, a good idea, you'll be your own boss sooner than you think! Part 1 of 5: Examining Your Personality Think about your priorities. Ask yourself some questions about what you want out of life, as well as out of your business. What does achieving your goals in life look like? What is important to you? What are you willing to sacrifice?[1]  Consider what you need to make these priorities and goals happen. Is it a certain amount of money? A certain amount of free time to spend with friends and family? 2. Decide whether your personality is a good fit for entrepreneurship. Becoming your own boss is a goal for many people, but some people are better suited to this lifestyle than others. Knowing how you are likely to react to events will help you achieve your goals.[2]  Are you comfortable with a lot of responsibility? Entrepreneurs often have no backup and are responsible for the success or failure of their business.  Do you enjoy interacting with people? Almost all entrepreneurs have to do a lot of customer service, particularly at first. If you aren’t good with people, you may have difficulty getting your business off the ground.  Are you able to accept uncertainty and even failure? Even the most successful entrepreneurs -- for example, Bill Gates, Steve Jobs, and Richard Branson -- have had businesses fail on them, often several times, before they found a formula that worked.[3]  Do you thrive on problem-solving and creative solutions? Entrepreneurs at all levels face many problems that they need to find creative solutions for. A high tolerance for frustration and the ability to think through problems will serve you well as an entrepreneur. 3  List your strengths. Be honest with yourself as you consider your strengths and weaknesses. When you talk to potential investors or sell to clients, you will need to have a very clear idea of what your strengths are so you can communicate them to others. 4  Determine to succeed. Energy and determination will get you through many of the hurdles you will face as a beginning entrepreneur. Be idealistic enough to believe in yourself, but pragmatic enough to examine the realities of your situation.[4] Part 2 of 5: Setting Your Foundations
  • 32. 1 Brainstorm a great idea. Most businesses start with one compelling idea — whether it's a service people need, a product that would make life easier, or something that combines both.The business world is full of great ideas (and many not-so-great ones). What will set yours apart is whether you can find a niche need to fill. [5]  You don’t necessarily have to do something revolutionary or brand-new to be successful. You just have to be better at something than your competitors.[6]  You will likely be more successful if you do something you know and love. Going into computer programming might make your business very marketable, but if your heart’s not in it you won’t have the energy to keep yourself going.[7]  If you’re having trouble thinking of an idea, create a list of things about your target market, such as places they shop and things they purchase. Narrow the list down to about three items, keeping cost, manufacturing time, and popularity in mind. Find the easiest, most realistic product you can offer. 2 Research your market. The key to starting a business is to know whether there is a demand for your product or service. Is what you can offer something that is not being done as well as it could be? Is it a need that doesn’t have enough supply to support demand?[8]  There are many sources of free industry information. Search online for industry and trade associations in your target market and read the articles and press releases they post. You can also get valuable demographic information from census data.[9]  The U.S. Small Business Administration has a website with excellent suggestions on how to come up with venture ideas, conduct market research, how to write a business plan, and how to recruit investors. It is an invaluable source of reliable information if you’re starting a business. 3 Talk to potential customers/clients. You can have the greatest product or service in the world, but if nobody wants to pay you for it, your business will crash and burn. Talking to others will also help you prepare to persuade investors.[10]
  • 33.  Ask for honest feedback when you talk to potential customers. Your friends may try to be nice to you when you propose your idea, but critical feedback that points out weaknesses or problems will be much more useful, even if it isn’t always easy to hear. 4 Determine what you can risk. Entrepreneurship is always a game of risk and reward, but often the risk is greater (especially in the beginning). Take stock of all your assets and figure out how much money (and time and energy) you actually have to invest.[11]  In addition to considering your savings, credit, and other sources of capital, consider how long you can afford to go without making a profit. Small businesses are rarely profitable immediately; can you afford to not draw a salary for perhaps several months or even a few years?  5  Understand the idea of “acceptable loss.” According to ‘’Forbes’’, “acceptable loss” is the idea that you should first determine the possible downside of your business venture and then invest only what you can actually afford to lose should your business turn out differently than you’d hoped. This limits the scale of failure if your venture doesn’t work out.  6  Commit to a goal, not a plan. One of the most important things in becoming an entrepreneur is flexibility. You can’t control everything about your business, and adaptation is vital to survival. If you’re overly committed to a plan, you may sabotage yourself. Part 3 of 5: Writing Your Business Plan 1 Create a business plan. A business plan typically describes what your company does (whom does it serve? what does it provide?), provides a market analysis, includes a detailed description of the product or service, and projects the expected financial future of your company for the next 3-5 years. If you are hoping to attract investors, they will want to see a detailed, thorough business plan.
  • 34. 2 Write a company description. This should be a brief summary of what your business does, what needs it satisfies and how, and why it is superior to other ventures of its kind. Be concrete and specific, but keep this short -- imagine it as an “elevator pitch”. 3 Present your market analysis. If you have done good market research, you should be able to talk in specifics about your chosen industry or field, your target consumer market, and your projected market share. This section should be as detailed as possible, as it needs to convince investors that you know what you’re doing.  One of the mistakes many beginning entrepreneurs make is failing to narrow their target market and trying to sell to too wide an audience. While it’s tempting to believe that everyone needs and will love your product or service, the reality is that they won’t. It’s okay to start small. 4  Include a section on organization and management. Even if your company is only you at this point, use this section to provide information on who owns your company, what their responsibilities are, and how you will structure your business as it expands. (Will you have a board of directors? How will your employees be organized?) Investors want to see that you have thought about the future of your company. 5 Provide information on your service or product. This is where you can get into the specifics of what exactly your business will provide your customers. What are you going to provide? What need will it fill? What competitive advantages does it have over other similar products?  Provide details from potential customers’ point of view. If you have already talked to potential customers, you should have a good idea what their opinions of your service or product are.
  • 35.  If you are planning to sell a proprietary good or service, include any patent information or other ways you plan to protect your intellectual property. Investors don’t want to invest in a business only to have their product scooped by a competitor. 6  Describe your marketing and sales strategies. This section will focus on how your business plans to attract and keep customers. How do you plan to reach your target consumers? How will you use marketing to grow your business? Do you already have potential customers lined up, or will you have to start completely from scratch? 7 Outline a funding request. If you are seeking investors or a bank loan, you will need to state exactly what you need to get your business started. You should include any amount you are investing yourself, how much money you need from your investors, and (most importantly) how you plan to use this funding.  Investors like specifics. A funding request that just says “I need a million dollars” is less likely to be persuasive than a requests that breaks down costs and expenditures. 8 Outline your financial projections. If you’re just starting out, you won’t have much historical financial data to work with. You should include any collateral you have that can guarantee your loan, but only list what you can truly afford to lose.[22]  You should also include information on prospective financial data. This may seem like simply making up numbers, but it should incorporate the data from your market analysis. How well are your competitors doing? What do their expenditures and cash flows look like? You can use these to help you make projections for your company.  Make sure that your financial projections match the figures in your funding request. If your projections show that you will need $500,000 but you’ve only asked for $200,000, this could suggest to investors that you haven’t done your homework. 9  Include appendices, if necessary. If you are just starting out, you may want to include other documentation to boost your credibility. Items such as letters of
  • 36. reference that can speak to your qualifications and skills or a credit history may be useful. 10  Write your executive summary. This actually goes at the very beginning of the business plan, but you’ll need to wait to write this until you’ve thought the rest of the plan out. The executive summary is a “snapshot” of your venture as a whole: its goals, its mission statement, and an introduction to yourself and your company. As a new entrepreneur, you should highlight your background and experience with your chosen product or service. It should be no longer than one page. Part 4 of 5: Preparing Your Pitch 1 Develop an elevator pitch. This type of pitch is called an elevator pitch because it should be concise and informative enough to let someone know who you are, what your business does, and why they should be interested -- all in the time it takes to ride an elevator.[25]  First, consider the problem or need that your venture addresses. This is often effectively stated as a question, which is why TV advertisements often begin with questions such as “Did you know that….” or “Are you tired of…” or “Have you ever had a problem doing…”.  Second, consider how your product or service fixes the issue you’ve identified. This should be no more than 1 or 2 sentences, but should be as specific as possible without getting into jargon.  Third, describe the main benefit of your product or service. This could be a description of how it achieves something for the customer, or how it outperforms your competition.  Finally, consider what you need from investors to get your venture going. This part can be longer, because it needs to express your basic needs, your experience and credentials, and why your investors can trust you to succeed.  Keep your elevator pitch short! Many experts suggest that it should not be longer than one minute. Remember: attention spans are short. Hook your audience quickly, or you may not hook them at all.[26]
  • 37. 2  Create a PowerPoint that summarizes your business plan. This should summarize all the information in your business plan. You should be able to deliver it, without rushing, in about 15 minutes.[27] 3  Practice your pitches. You will likely be jittery about pitching your business at first, so get in some practice. You can rehearse delivering your elevator pitch and discussing your business plan with friends, coworkers, and other colleagues. 4  Ask for feedback. You will probably make mistakes at first. Ask the people you practice with for honest feedback. Were you expressing your ideas clearly? Did you sound nervous? Did you talk too quickly or too slowly? Where do you need to explain more, and are there explanations you could cut? Part 5 of 5: Taking Your Ideas to Others 1 Network, network, network. Attend trade and industry shows in your field and talk with exhibitors. Join relevant professional associations. Build a strong social network with other entrepreneurs, both online (using social media and professional sites like Linkedin) and in person.  Attending networking events such as local fairs hosted by your chamber of commerce is a great way to connect with other entrepreneurs in your area. These connections can provide you with support, ideas, and opportunities.  Be generous to others. Don’t consider networking with other entrepreneurs only in terms of what they can give you. If you offer advice, ideas, and support to others, they will be more likely to want to help you as well. Nobody likes to feel exploited.  Pay attention to others’ ideas. Even if you’re in direct competition with someone, you can probably still learn from them. You can learn from others’ mistakes as well as their successes, but only if you listen to them.
  • 38. 2 Develop a strong brand. You need to be able to effectively communicate your business to others in person and online, and that means having a strong brand presence. Professional-looking business cards, a website, and social media accounts (Twitter, Facebook, Pinterest, YouTube, etc.) that provide information about your business in an attractive, cohesive way will help show that you’re serious about your venture. It will also give people the opportunity to look you up and learn more about you.  Look at the websites and branding of some successful companies. See what they have in common, what they do that’s interesting, and try to emulate that formula with your own brand. (Never steal or copy someone else’s intellectual property, though.)  Consider starting a professional blog, especially if you are in a service field. This can be an excellent way to show off your experience and ideas and help investors and customers get to know you. 3 Ask network contacts to refer you to investors. Chances are, you know someone who knows someone who’s looking for something to invest in. Many investors won’t consider “blind submissions” (business plans sent without invitation) but are happy to hear a pitch from an entrepreneur recommended by someone they already know and trust.[29]  Remember to return this favor whenever possible. People are more likely to want to help you if they feel that you will help them when and if you can. Goodwill is essential for an entrepreneur to have. 4 Acquire investors. Pitch your idea to any potential investor to get money to start your company. The type of business you’re starting will help determine who wants to invest in it. Networking is an excellent way to hear about investing tips and opportunities.  Keep in mind that venture capitalists (often referred to in the business world as “VCs”) are focused on two things: how much money investing in your business will make them, and how
  • 39. soon that profit will happen. While hundreds of thousands of businesses are started every year, only about 500 a year get VCs as investors.[30]  If you are providing a professional service, such as consulting, accounting, law, or medicine, consider forming a partnership with someone who is already established in that profession. Someone who is familiar with your field (and your knowledge of it) may be more likely to invest in your success.  Starting small and pleasing a small number of customers at first is a high-probability way to get there. If you can get your business started without spending a lot of money, that might be your best route. 5  Sell. Sell and distribute your product. If you're getting revenue, then you're in business! You're testing your theories about the market, you're finding out what really works and what doesn't, and you're getting fuel for more ideas and improvements. Stay flexible and keep working hard! Tips  Entrepreneurship is hard, even when you’re successful. Try to maintain healthy relationships with your friends and family so that you have the emotional support you need.  You don’t necessarily have to go it alone. Particularly for new startups such as law firms or restaurants, having a team of people with experience and skills in the field will boost your chances of success.  Don’t get complacent once you’re successful. Businesses have to continually adapt to changing market needs and customer demands, even when they’re doing well. Continue to network, communicate with customers, and innovate. Warnings  8 out of 10 small businesses fail in the first 18 months.[31] Even if you do everything right, failure is always still an option, so while you need to believe in yourself, you also need to understand the risks you’re taking and accept the possibility that your first business won’t work out the way you wanted.
  • 40. TYPES OF ENTREPRENEURSEntrepreneurs may be classifiedin a number of ways. A. ON THE BASIS OF TYPE OF BUSINESS. Entrepreneurs are classified into different types. They are 1) Business Entrepreneur: He is an individual who discovers an idea to start a business and then builds a business to give birth to his idea . 2).Trading Entrepreneur: He is an entrepreneur who undertakes trading activity i.e; buying and selling manufactured goods. 3) Industrial Entrepreneur: He is an entrepreneur who undertakes manufacturing activities. 4) Corporate Entrepreneur: He is a person who demonstrates his innovative skill in organizing and managing a corporate undertaking. 5) Agricultural Entrepreneur: They are entrepreneurs who undertake agricultural activities such as raising and marketing of crops, fertilizers and other imputs of agriculture. They are called agripreneurs. B. ON THE BASIS OF USE OF TECHNOLOGY: Entrepreneurs are of the following types. 1) Technical Entrepreneur: They are extremely task oriented. They are of craftsman type. They develop new and improved quality goods because of their craftmanship. They concentrate more on production than on marketing. 2) Non-Technical Entrepreneur: These entrepreneurs are not concerned with the technical aspects of the product. They develop marketing techniques and distribution strategies to promote their business. Thus they concentrate more on marketing aspects. 3) Professional Entrepreneur: He is an entrepreneur who starts a business unit but does not carry on the business for long period. He sells out the running business and starts another venture. C. ON THE BASIS OF MOTIVATION: Entrepreneurs are of the following types: 1) Pure Entrepreneur: They believe in their own performance while undertaking business activities. They undertake business ventures for their personal satisfaction, status and ego. They are guided by the motive of profit. For example, Dhirubhai Ambani of Reliance Group. 2) Induced Entrepreneur: He is induced to take up an entrepreneurial activity with a view to avail some benefits from the government. These benefits are in the form of assistance, incentives, subsidies, concessions and infrastructures. 3) Motivated Entrepreneur: These entrepreneurs are motivated by the desire to make use of their technical and professional expertise and skills. They are motivated by the desire for self- fulfillment.
  • 41. 4) Spontaneous Entrepreneur: They are motivated by their desire for self-employment and to achieve or prove their excellence in job performance. They are natural entrepreneurs. D. ON THE BASIS OF STAGES OF DEVELOPMENT: They may be classified into; 1) First Generation Entrepreneur: He is one who starts an industrial unit by means of his own innovative ideas and skills. He is essentially an innovator. He is also called new entrepreneur . 2) Modern Entrepreneur: He is an entrepreneur who undertakes those ventures which suit the modern marketing needs. 3) Classical Entrepreneur: He is one who develops a self supporting venture for the satisfaction of customers’ needs. He is a stereo type or traditional entrepreneur. E. CLASSIFICATION ON THE BASIS OF ENTREPRENEURIAL ACTIVITY: They are classified as follows: 1) Novice: A novice is someone who has started his/her first entrepreneurial venture . 2) Serial Entrepreneur: A serial entrepreneur is someone who is devoted to one venture at a time but ultimately starts many. He repeatedly starts businesses and grows them to a sustainable size and then sells them off. 3) Portfolio Entrepreneurs: A portfolio entrepreneur starts and runs a number of businesses at the same time. It may be a strategy of spreading risk or it may be that the entrepreneur is simultaneously excited by a variety of opportunities. F. CLASSIFICATION BY CLARENCE DANHOF: Clarence Danh of, On the basis of American agriculture, classified entrepreneurs in the following categories: 1) Innovative Entrepreneurs: They are generally aggressive on experimentation and cleverly put attractive possibilities into practice. An innovative entrepreneur, introduces new goods, inaugurates new methods of production, discovers new markets and reorganizes the enterprise. Innovative entrepreneurs bring about a transformation in lifestyle and are always interested in introducing innovations. 2) Adoptive Or Imitative Entrepreneurs: Imitative entrepreneurs do not innovate the changes themselves, they only imitate techniques and technology innovated by others. They copy and learn from the innovating entrepreneurs. While innovating entrepreneurs are creative, imitative entrepreneurs are adoptive. 3) Fabian Entrepreneurs: These entrepreneurs are traditionally bounded. They would be cautious. They neither introduce new changes nor adopt new methods innovated by others entrepreneurs. They are shy and lazy. They try to follow the footsteps of their predecessors. They follow old customs, traditions, sentiments etc. They take up new projects only when it is necessary to do so.
  • 42. 4) Drone Entrepreneurs: Drone entrepreneurs are those who refuse to adopt and use opportunities to make changes in production. They would not change the method of production already introduced. They follow the traditional method of production. They may even suffer losses but they are not ready to make changes in their existing production methods. There is another classification of entrepreneurs. According to this, entrepreneurs may be broadly classified into commercial entrepreneurs and social entrepreneurs. Commercial Entrepreneurs: They are those entrepreneurs who start business enterprises for their personal gain. They undertake business ventures for the purpose of generating sales and profits. Most of the entrepreneurs belong to this category. Social Entrepreneurs: They are those who identify, evaluate and exploit opportunities that create social values and not personal wealth. Social values refer to the basic long standing needs of society. They focus on the disadvantaged sections of the society. They play the role of change agents in the society. In short, social entrepreneurs are those who start ventures not for making profits but for providing social welfare. 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. Q)7) short notes: Business plan. (2014) 10 marks