1. Small businesses play an important role in economies by providing employment opportunities, utilizing local resources, and equitable distribution of income. 2. The Indian government has various policies and incentives to promote small businesses, such as providing financing and support through organizations like NABARD, NSIC, and District Industries Centers. 3. Small businesses are classified based on factors like investment amount and employees. They contribute to industrialization, produce a variety of goods, and encourage regional development, but can face issues like financing difficulties and global competition.

1. SMALL BUSINESS AND
ENTREPRENEURSHIP

2. Small enterprises play very important role in every country of the
world. A small business is an enterprise which operates an a small
scale requires less capital, less labour and less machines.
Small business enterprises provide better opportunity for
generating employment, better utilization of local resource, equitable
distribution of national income, etc...
In view of the contribution made by small businesses, the govt of
India has formed various policies. The govt also offers various incentives
and benefits for the growth and promotion of small scale businesses.

3. TYPES OF SMALL BUSINESS
several parameters are used to measure the size of the business. The
parameters often used are:
i. The number of persons employed in the business
ii. Capital invested in the business
iii. Power consumed for business activities
The definitions used by government of India to describe small
industries is based on the investment in plant and machinery. It is mainly
because, in India capital is scares and labour is abundant . Micro, small and
medium Enterprises Development(MSMED),Act 2006 was enacted by the
government of India. The Act covers all the micro, medium and related
service enterprises.

4. CLASSIFICATION OF SMALL INDUSTRIES
As per MSMED Act 2006, small industries are classified as follows.
Small
industries
manufacturing
micro
small
medium
Services
micro
medium
small
Village
industries
Cottage
industries

5. 1 . M A N U FA C TU R IN G
In case of enterprises engaged in the manufacturing or production of
goods pertaining to any industry specified in the first schedule to the
Industries (Development and Regulation)Act,1951, there three types of
enterprises:
a) Micro enterprises: where the investments in plant and machinery
does not exceeds twenty five lakhs rupees.
b) Small enterprises: where the investment in plant and machinery is
not more than 25 lakhs rupees
c) Medium enterprises: where the investment in plant and machinery is
not more then 5 cr rupees but does not exceeds ten cr rupees

6. 2 . SERV IC ES
In the case of enterprises engaged in providing or rendering
services there are three types of enterprises
a) Micro enterprise : where the investment in equipment does not exceed ten
lakhs rupees.
b) Small enterprise: where the investment in equipment is more than ten lakhs
rupees but does not exceed five cr rupees.
c) Medium enterprise: where the investment in equipment is more than two cr
rupees but does not exceed five cr rupees.

7. 3 . V ILLA GE IN D U STR IES
Industries means any industry located in “rural areas ”which produces any goods
or renders any services with or without the use of power.
4 .COTTAGE INDUSTRIES
cottage industries are also known as Rural Industries or Traditional Industries.
These industries are involved in making products particularly in homes using hands and
simple tools.

8. ROLE OF SMALL SCALE INDUSTRIES IN INDIA
The following points explain the importance of small enterprises in India
1. Employment generation : they are more labor intensive, they generate
more number of employment opportunity per unit of capital investment.
2. Contribution to industrialization : small industries account for 95% of
the industrial units in the country and contribute almost 40% of the total
industrial production .
3. Variety of production : small scale industries produce an enormous
variety of products, which include:
a. Consumption items: such as readymade garments, stationery, soaps,
leather goods, plastic products, rubber goods etc.
b. Sophisticated items: such as television, electro-medical equipments, air
conditioning equipment , etc..
4. Balanced regional development : small industries can be set any where in
the country. They use local resources, less capital and simple technology.

9. 5. Low cost of production: small industries enjoy the advantage of low cost of
production as they use local resources in their products
6. Quick and timely decision: Due to the small size of the organization, quick
and timely decision can be taken without consulting many people.
7. Development of entrepreneurship : small industries provide opportunity of
young men and women to start their own businesses.
8. Suitable for customized production: goods can be produced according to
needs of the customers as they use simple and flexible production
techniques.
9. Personal contact : small industries have inherent strength of adaptability
and a personal touch.

10. Role /importance of Small Business in Rural India
The following points highlight the role of small business in rural India.
1. Provide employment in rural areas :Cottage and rural industries provide
employment opportunities in the rural areas, especially for the traditional
artisans and the weaker sections of the society
2. Improve economic conditions: Small industries help to improve economic
conditions and standard of living in rural areas.
3. Prevent migration: Development of rural and village industries can also
prevent migration of the rural population to urban areas to search
employment
4. Utilization of local resources: Small scale industries use local resources
such as coir, wood, etc for manufacturing different finished articles
5. Equitable distribution of national income: It ensures equitable distribution
of national income
6. Accelerate economic growth: By establishing small units in rural areas, the
economic growth is automatically accelerate

11. PROBLEMS OF SMALL INDUSTRIES
Following are the problems faced by small b businesses.
1. Shortage of finance: Small business units are suffering from lack of
adequate of working capital
2. Shortage of raw materials: These units are unable to obtain good quality
raw materials at reasonable price as they cannot purchase raw materials in
large quantity.
3. Difficulties in marketing: The small scale units cannot may not be able to
spend huge amount for advertisement and sales promotion,
4. Lack of material skill: Enterprises may not be able to hire professional
experts due to shortage of funds
5. Problem of technology: Due to lack of capital, they are not able to acquire
new machines and technologies.
6. Low quality product: Small industries are unable to supply standardized
goods of high quality due to lack of modern technology and shortage of
resources to invest in research for quality improvement.

12. 7. Idle capacity: small business firms have to operate below the full capacity
level due to shortage of demand for their products.
8. Outdated technology: most small businesses use outdated technology because
of their inability to use modern advanced technological methods.
9. Sickness: now a days, small industries are becoming sick due to various
internal and external problems. Internal problems include lack of skilled labor
and poor managerial and marketing skills. External problems include delayed
payment, shortage of working capital, lack of demand etc.
10. Global competition : the new industrial policy,1991 initiated government of
India ha the following impact on small businesses.
• They have to face competition not only from medium and large
domestic industries, but also from multi National Companies (MNCs)
• They are unable to withstand quality standards, technological skills and
financial creditworthiness of large domestic industries and MNCs
• They have limited access to markets of developed countries due to their
stringent quality requirements

13. GOVERNMENT ASSISTANCE TO SMALL BUSINESS UNITS
1. NABARD- (National Bank for Agriculture and
Rural Development )
NABARD was set up in 1982 to promote
integrated rural development. The objective of
NABARD are:
a) To provide financial support to small industries,
cottage and village industries and agriculture.
b)To provide counseling and consultancy services.
c)To organize training and development
programmes for rural entrepreneurs.

14. 2. RSBDC (THE RURAL SMALL BUSINESS DEVELOPMENT
CENTRE)
RSBDC is set up by the World association for
small and medium enterprises and is
sponsored by NABARD. The main objectives
are :
 Provide managerial and technical support
to micro and small units in rural areas
 Organizing several programmes for skill
development and training
 Providing training programs for people
employed in industries such as toy
making, candle making, ready made
garments etc..

15. 3. NSIC (NATIONAL SMALL INDUSTRIES CORPORATION )
NSIC was set up in 1955 to promote, aid and foster
the growth of small scale units in India. Its main focus
on was :
 supplying indigenous and imported machines in
easy installment
Procuring and supplying imported raw materials
Exporting the products of small business units and
developing export worthiness.
Providing mentoring and advisory services
Serving as technology business incubators
Creating awareness on technological up gradation
Developing software technology parks and
technology transfer centers.

16. 4. RWED (Rural and Women Entrepreneurship Development)
RWED programme aims to promote a favorable business
environment and to build institutional and human capacities for
promotion of entrepreneurship among rural people and women. Its
main objective are :
To create a business environment that encourages initiative of rural
and women entrepreneurs.
To foster entrepreneurial dynamism and enhance productivity.
To provide training and training manuals to women entrepreneurs
To render any other advisory services.

17. 5. SFURTI (Scheme for Regeneration of Traditional Industries)
It is a special fund set up by the Central
Government in 2005 to make traditional
industries more productive and competitive. This
has been implemented by the Ministry of Agro
and Rural Industries in collaboration with
State Government.
The main aim of this scheme are:
• To set up traditional industries in various parts
of the country
•To improve the technology of traditional
industries in order to make them competitive,
profitable and sustainable.
•To create sustained employment opportunities
in traditional industries.

18. 6.DICs (The District Industries Centers)
The scheme of District Industries Center was launched in 1978 to
provide assistance to small scale industries at the District level.
The main objective of this scheme are:
To provide an integrated administrative framework at the district
level
To provide all the services and support facilities to the
entrepreneurs for setting up small and village industries
To identify suitable schemes, prepare feasibility reports, arrange for
credit, provide for raw materials , etc…

19. ENTREPRENEURSHIP DEVELOPMENT
It is very crucial for the economic stability of a developing country like India,
where the problem of unemployment is very severe. Entrepreneurship is the
process of setting up of ones own business as distinct from going some where
else for employment or practicing some profession. The person who sets up the
business is called an Entrepreneur and the business unit set is known as an
Enterprise.
Definition
“Entrepreneurship is a set of activities performed by an entrepreneur to establish,
develop and carry on his business in a new and better way.”
Entrepreneurship is defined as, “a systematic, purposeful and creative activity
of identifying a need, mobilizing resources and organizing production with a
view to delivering value to the customer, income to the investors and profits for
the self”

20. CHARACTERISTICS OF ENTREPRENEURSHIP
The following are the characteristics of Entrepreneurship:
1. Systematic Activity: Entrepreneurship is not something that happens by
chance. It is a systematic step by step and purposeful activity. It means that
entrepreneurs are ‘not born, but are made’.
2. Lawful and purposeful activity: the entrepreneurship must be for
establishing a lawful business. The purpose of it should be creation of profit
and social gain.
3. Innovation: entrepreneurship is an innovative function as it involve doing
things in a new and better way.
4. Organization of production: production involves creation of utility such as
form utility , place utility , time utility, etc…this requires the combined
utilization of the factor of production such as land , labor ,capital and
technology.
5. Risk –taking: risk taking is an inherent and inseparable element of
entrepreneurship. He assumes the uncertainty of future. In the pursuit of
profit, there is every possibility of loss.

21. 6. Accepting challenges: Entrepreneurial persons are quick to see and seize
opportunities. They show an innovative turn of mind and convert challenges
into opportunities.
7. Gap filling function: An entrepreneur identifies the gap between human
needs and the available products and services and takes necessary steps to fill
the gap.
8. Economic Activity: Entrepreneurship is primarily an economic function
because it involves the creation and operation of an enterprise.

22. IMPORTANCE/OBJ ECTIVES OF
EN TR EPR EN EU R SHIP
1. Employment generation: Educated unemployment is an acute problem of
the nation entrepreneurs generate employment both directly and indirectly.
The entrepreneur is the employment provider and not an employment seeker.
2. National income: National income consists of the total goods and services
produced in the country. An increased number of entrepreneur are required to
meet the increasing demand for goods and services.
3. Balanced Regional Development: The government extend various
concessions and subsidies to the entrepreneurs who take initiative to set up
industries in the under developed regions.
4. Dispersal of economic power: The emergence of large number of new
entrepreneurs lead to dispersal of economic power.
5. Better standard of Living: entrepreneurs play a vital role in achieving a
higher rate of economic growth. They produce and supply quality goods at a
lower rate to the customers.
6. Capital formation: entrepreneurs mobilize the idle savings of the public.
This helps to promote capital formation.

23. 7. Backward and forward Linkages: setting up of an enterprise has several
backward and forward linkages that stimulate the process of ecomonic
development in the country.
8.Creating innovation: an entrepreneur is one who always looks for chages.
He introduces new ideas and techniques to the production of goods and
providing of services.
9.Increasing productivity: the entrepreneur ensures optimum utilisation of
scarce resources and thereby, tries to increase the productivity of factors of
production.

24. STARTUP INDIA SCHEME
The startup India scheme is an initiative of the Government of India with an
objective of nurturing innovations and startups in the country.
Aims/Objectives of Startup India Scheme
1) Developing entrepreneurial culture: The schemes aims at developing
entrepreneurial culture and instilling entrepreneurial values in the society.
2) Projecting the image of an entrepreneur: it is meant for creating awareness
about the charms of being an entrepreneur. It helps to develop awareness
about the process of entrepreneurship among the youth.
3) Encouraging more dynamic startups: the scheme encourages more
dynamic startups by motivating educated youth, scientists and technologies
to consider entrepreneurship as a attractive career.
4) Initial support: it supports the initial phase of entrepreneurship
development, such as pre-startup phase, nascent phase, early post startup
phase and growth phase.
5) Broad basing the entrepreneurial supply: it helps to broad base the
entrepreneurial supply by meeting specific needs of under represented
target groups like women, socially and economically backward
communities, SC and ST

25. STARTUPS
A start up is an young entrepreneurial venture that is just beginning to develop.
A startup is an entrepreneurial venture which is newly emerged one that aims
to meet s marketplaces need, want or problem by developing a viable business
model around products, services, processes or platforms
As per the notification dated February 17,2017 ,issued
by Ministry of Commerce and Industry, a startup means:
i. An entity incorporated or registered in India
ii. Not older than five years.
iii.Annual turnover does not exceed 25 cr in any
preceding year.
iv.Working towards innovation, development or
commercialization of products or services or
processes.

26. STARTUP INDIA INITIATIVE: ACTION POINTS
1. Simplification: The registration and other formalities connected with
commencing and registering startups have been simplified.
2. Startup India hub: the objective of the hub is to create a single point of
contact for the entire startup ecosystem.
3. Legal support for parents and IPRs: the scheme helps the startups to protect
their intellectual property right .
4. Easily exit: a startup can close its business within 90 days from the date of
application of winding up
5. Tax exemption: the profit of startup ventures are exempted from income tax
for a period of 3 year .
6. Research and development facilities: research and development is well
associated with startups.
7. Easy access to funds: a fund of Rs 10000 Crs is set by the govt to provide
fund to the startup as venture capital. Venture capital is the private or
institutional financial support given to the startups at their early stage.
8. Harnessing private sector for incubator setup.

27. FUNDING OF STARTUPS
1. Bootstrapping : It also known as itself financing, is starting up of a
company with personal savings alone, without any outside financial support.
2. Crowd funding: it is the practice of funding a project or venture by raising
small amount of money from a large number of people , through the
internet.
3. Angel investment: this investors are individual with surplus cash who take
keen interest to invest in new startups.
4. Venture capital : it is the risk capital provided to the startups at their earl
stage.
5. Business incubators and accelerators: a business incubator is a company
that helps startup companies to develop by providing management training
or office space. Business accelerators are those who help startups to get
establishes and self sufficient through mentorship, financial and other
supports.
6. Micro finance and NFBCs: microfinance is a type of banking service
provided to unemployed or low income individuals or small businesses by
offering small amount of working capital. Non banking Financial
Corporation (NBFC)provide banking services without meeting legal
requirements of a bank.

28. INTELLECTUAL PROPERTY RIGHT(IPR)
Intellectual property right play a vital role in the development of global
economy. Property created by human intellect is called intellectual property.
The IP is the outcome of an invention developed out of an idea. Legal rights
conferred on intellectual properties from govt are called intellectual property
rights (IPRs).It exists in books, paintings , songs, images, industrial designs
etc. The owner of IP can rent ,transfer or sell it to other people.
The term intellectual property right refers to the legal rights granted with the
aim to protect the creations of intellect . IP is usual divided into two broad
categories
1) Industrial property: it include trade marks, patents, industrial designs
and geographical indicators of source
2) Copy right :It includes
i. Literary works such as novels books , poem , song lyrics,
computer programme etc
ii. Artistic works such as drawing, painting , sculptures etc
iii. Dramatic work such as dance or mime, screen play etc.

29. FEATU R ES OF IN TELLEC TU A L PR OPERTY
1) Intangible: the intellectual property is intangible in nature. It cannot be
defined or identified by its own physical nature.
2) Territorial: the intellectual property is protected and governed by appropriate
national legislations.
3) Exclusive right to the owner: it gives the right only to the real owner.
4) Assignable: since they are rights, they can be clearly assigned(licensed)
5) Commercial application: it should be capable of industrial application
6) Constantly evolving: the scope of intellectual property widens with the
inclusion of newer forms.

30. IM PORTA N C E OF ‘ IPR ’ TO EN TR EPR EN EU R S
1. Encourages invention: IPR encourages new creation as it gives protection
to inventions, creations and investments.
2. Recognition for the work: IP rights help authors, creators, developers and
owners to get recognition for their work.
3. Protection against competitors: IP rights provide protection from
competitors from copying the idea.
4. Financial benefits: IPR ensures that entrepreneurs get all the financial
benefits from their ideas.

31. TRADE RELATED INTELLECTUAL PROPRTY SYSTEMS
(TRIPS) AGREEMENT
The agreement on Trade Related Aspects of Intellectual Property
Rights(TRIPS) is an international legal agreement between all the member nations
of the World Trade Organization(WTO). It came into force on 1st
january,1995.the areas covered under this agreement are: copyright, trade mark,
geographical indications of goods, patents, designs, pant varieties, integrated
circuits, etc.
FACETS OF IPs
There are three facets that come under IP. They are:
1. Law : IPR are legal rights conferred upon the creator or owner of IP to
prevent others from using the protected subject matter.
2. Technology: IPR with respect to technology covers various aspects of
information technology , automobiles , pharmaceuticals, biotechnology etc.
3. Business and economics: IPR should help in the development of industry and
in the success of businesses.

32. D IFFER EN T TY PES OF IPS
1. COPY RIGHT
It is a form of intellectual property, applicable to certain forms of
creative works which establishes the exclusive right to the creator to reproduce
literary, dramatically ,musical, artistic and cinematographic works. Copyright is
the right to ‘not copy'. It is an exclusive right of the creator to prohibit the
unauthorized use of its contents. Copy right in India is governed by the
Copyright Amendment Act , 2012.Copyright is vested with the publishers. In
some countries it is called ‘author’s right’.

33. 2. TRADEMARK
Trademark in India is governed by the Trademark Act,1999. A Trademark is
a recognizable word , name , symbol , design ,etc. which help to identify the
products or services of a particular individual or a business organization. It
may be categorized as
i. Conventional Trademark: The conventional Trademark includes words ,
color combination, label, logo etc.
ii. Non conventional Trademark: it include
a) sound mark which represents a melody that is graphically
presented by notes
b) Dynamic mark which are directions and symbols used to indiacate
degree of loudness,

34. 3. GEOGRAPHICAL INDICATION
The geographical indications is governed by the Geographical Indication of
Goods (Registration and protection)Act,1999. a GI is a sign or place of origin used
on products that have a specific geographical region of origin and possesses some
special qualities and characteristics attributable to its geographical origin.
E.g.:- Nagpur orange , Darjeeling Tea , Banaras saree , marayoor sarkara, Nilambur
teakwood etc.

35. 4. PATENT
The patent is governed by The Patent Act,2005. A patent is a form of
intellectual property which provides legal protection for an invention. It is right
granted by the government which provides the exclusive right to the inventors and
prevents others from using such inventions. An invention may be a produce, a
process or a combination of both.
Conditions to be fulfilled for an invention to be patented
 It must be new
 It must be non-obvious
 Industrial application
 It should be useful

36. 5. DESIGN/INDUSTRIAL DESIGN
Designs is governed by Designs Act,2000. a design is a form of
intellectual property, which forms the ornamental or aeathetic aspect of useful
articles of mass production.it includes shape,pattern,and arrangement of lines or
coloue combination that is applied to any article. The term of protection of a desig
is valid for 10 years,which can be renewed for further 5 years after expiration of
this term.

37. 6. PLANT VARIETY AND FARMER RIGHTS
It refers to grouping of plants into categories based on their botanical
characteristics. It is a type of variety which is bred and developed by farmers. This
helps is conserving, improving and making available plant genetic resources.
The protection of plant variety and farmers Rights Act,2001 Is an act for
the establishment and protection of farmers and plant breeders

38. 7.SEMICONDUCTOR INTERATED CIRCUITS LAYOUT DESIGN
A semi conductor integrated circuits is an integral part of every
computer chip used in modern computers and smart phones. The layout designs of
these semiconductor integrated circuits are simply some artworks. The trios
agreement provides protection to the layout design of integrated circuits for a
period of ten years.