The document discusses various topics related to entrepreneurship including the evolution of entrepreneurship, John Kao's model of entrepreneurship, steps in the idea generation process, identification and evaluation of opportunities, building an effective team, business strategic planning, types of business ownership such as sole proprietorships, partnerships, LLCs, corporations, cooperatives and franchising. It provides details on the definition, advantages, disadvantages and types of franchise arrangements. It also includes a franchise evaluation checklist.

1. ENTREPRENEURSHIP
DEVELOPMENT

2. EVOLUTION OF ENTREPRENTEURSHIP
• Entrepreneurship is one of the four mainstream economic factors-
land, labor, capital, and entrepreneurship. During the 14th century,
references speak about tax contractors individuals who paid a fixed
sum of money to the government for the license to collect taxes in
their region. Known as tax contractors they used to take the risk of
collecting taxes. If they collected more the than sum paid for their
license, they made profits and kept the excess. The concept of
entrepreneurship of was existing in the 17th century and was a
common topic in economic essays for much of the 18th and 19th
centuries.

3. JOHN KAO’S MODEL OF ENTREPRENEURSHIP

4. JOHN KAO’S MODEL OF ENTREPRENEURSHIP
• Entrepreneurial Personality: The overall success of a new
venture largely depends upon the skill, qualities, traits,
and determination of the entrepreneur.
• Entrepreneurial Task: It is a role played by an
entrepreneur in an enterprise. The major task of the
entrepreneur is to recognize and exploit opportunities.
• Entrepreneurial Environment: It involves the availability of
resources, infrastructure, competitive pressures, social
values, rules and regulations, stage of technology, etc.
• Organizational Context: It is the immediate setting in
which creative and entrepreneurial work takes place. It
involves the structure, rules, policies, culture, human
resource system, and communication system.

5. Steps of the idea generation process
• Step 1 – Gather raw materials
• In the advertising world, it is the agency’s job to know the client,
its products and, most importantly, its customers. Yet most
agency people stop too soon in the process of gathering
information. If enough research exists, differences between
products and consumers appear, leading to relationship
individualities that may lead to an idea. In advertising, an idea
results from a new combination of specific knowledge about
products and people with a general knowledge about life and
events. A practical step is to write information down and save it
in a systematic way on your computer. Classify and organize
information as you gather it. This helps prepare your mind for
the idea-producing process.

6. Steps of the idea generation process
• Step 2 – Blend your information together
• The second step, after thorough raw material gathering, is to
blend the information together—bringing facts together to see
how they fit. Bits of ideas may begin to appear; this can be
mentally exhausting but press on and think of it as putting a
puzzle together.
• Step 3 – Drop and forget it
• Drop the idea completely and turn it over to your unconscious
mind: In other words, let it develop while you sleep. Also, do
things that you enjoy that stimulate your mind and emotions.
Listen to music; go to the movie or theater; read poetry; or get
outside your normal routine.

7. Steps of the idea generation process
• Step 4 – Have your eureka moment
• If you’ve really done your work during the first three steps, then the
fourth happens naturally. Perhaps you’ve experienced this: a
“Eureka” or “I’ve got it” moment. You wake up with a great idea or
you are taking a shower or driving to work and the idea appears with
clarity. Write it down or commit it to memory.
• Step 5 - Share your idea
• This is when reality hits. Your bright, shiny idea may lose some of its
luster once others are made aware of it. However, the refining and
tuning process that happens when you share your ideas with the
team can offer enlightening perspective—and generate something
better. It’s important not to hold your idea too tightly: allow it to go
through a critical-thinking process. If it’s a good idea, you will see
that it has self-expanding qualities, and with this, possibilities you did
not think of may come to light.
• This five-step process, as simple as it seems, will allow you to
continue down the path of producing relevant and dramatic ideas for
your business. However, Young’s method of idea generation is not

8. Identification and Evaluation of the
Opportunity
• Opportunity identification and evaluation is a most difficult task.
Entrepreneurship does not always begin with the creative
concept for a new product, service, or process. It often begins
with the entrepreneur’s alertness to identify an opportunity.
Whether the opportunity is identified by using input from
consumers, business associates, channel members, or
technical experts, the entrepreneur needs to carefully screen
and evaluate each opportunity. This evaluation of the
opportunity is perhaps the most critical element of the
entrepreneurial process as it assesses whether the specific
product or service has the needed returns compared to the
required resources. Offering a better product, service, ...

9. 14 steps to building a successful and effective
team
• Set organization goals and start planning
• Define the roles within your team
• Maximize the skills of your team member
• Embrace diversity
• Set expectations from day one
• Allow your team to take risks and experiment
• Celebrate successes and failures
• Promote individual development
• Avoid micromanagement
• Motivate your team with positivity
• Establish strong leadership
• Create a team culture
• Foster connections within the team
• Communicate frequently and effectively

10. Business Strategic Planning
• Business strategic planning is the process of creating a
business strategy and an accompanying business strategic plan
to implement a company’s vision and achieve its goals over
time. The main goal of strategic planning is to take a company
from its current state to its desired state through a series of
business actions.
• The business strategic planning process usually consists of
defining business goals, doing a SWOT analysis to assess the
company’s business environment, and developing a business
strategy. The leadership team is in charge of business strategic
planning, as it has a very important impact on the overall
direction of a company

11. The Strategic Planning Process in 3 Steps
• 1. Set Business Goals
• A business goal is simply an accomplishment that a company wants to achieve in the
short, medium or long term. Business goals can take many forms such as increasing
sales, revenue, customer satisfaction levels and brand positioning, among many other
things.
• 2. Conduct a SWOT Analysis
• The goal of a business strategy is to leverage the strengths of a business and minimize
the impact of its weaknesses. Those two things are internal factors. The strengths of a
company can become competitive advantages that can lead to business growth. There
are many types of business strengths and weaknesses such as scale, speed, or R&D,
just to name a few.
• Threats and opportunities refer to external factors such as competitors or an untapped
market. A successful business strategy considers all of these factors to define how a
product or service will be created, marketed and sold, and a SWOT analysis is a great
starting point.
• 3. Develop a Business Strategy & Strategic Plan
• Once you’ve completed your SWOT analysis, you can create a business strategy that’s
designed to help position your company in the market. Your business strategy guides
how you produce, market and sell your product or service based on internal and external
analysis.
• Then, you’ll need a strategic plan to explain how you plan to execute that business

12. Common types of ownership
• Sole proprietorship
• A sole proprietorship occurs when someone does business
activities but doesn’t register as another kind of business. There
is no separate business entity, meaning there is no distinction
between the business owner’s personal and
professional assets and liabilities.
• Sole proprietorships are simple, easy to start, and one of the
most common types of business ownership. They are a good
option for someone starting a low-risk business on a trial basis.
Also, no additional taxation!
• However, because there is no formal separation, the business
owner will become personally liable for any obligation the
business might have.

14. Partnership
• Similar to sole proprietorships, a partnership is
the simplest type of business ownership when two or
more people are involved. There are two kinds:
limited partnerships and limited liability
partnerships.
• A limited partnership has one partner with
unlimited liability while everyone else involved
has limited liability. With limited liability,
comes limited control. Since being a partner with
Liability: being responsible for something by law
Limited liability: a person’s liability is limited to a fixed sum, which usually reflects
their investment in the business
Unlimited liability: there is no limit to the liability and the owners take full
responsibility for the companies’ debts

16. Limited liability company
• Not to be confused with a limited
liability partnership, a limited
liability company (LLC) separates the owner’s
personal and professional assets. Meaning if
your business gets hit with a lawsuit or goes
bankrupt, your house, car, and personal piggy
bank are safe.
• Similar to sole proprietorships and
partnerships, LLCs do not pay additional
federal income taxes or those associated with
being a corporation. However, depending on
their location, they might be subject to other
state taxes. Also, LLCs fall under the category
of self-employment, so those taxes fall on them
as well.

18. Corporations
• There are actually a few separate types of
corporations, and each one has something that
makes it a little different.
• C corporation
• A C corporation, or just a regular corporation, is
its own entity kept separate from its owners. This
means they offer the most protection in terms of
personal liability.
• Corporations have an advantage when it comes to
funding: stock. A stock is a partial share in a
company, so when people buy stock, they are
essentially buying ownership and decision-making
responsibilities.
• However, starting a corporation costs more than
any other business structure. Not only are they
legally required to do keep more records and

19. S Corporation
• An S corporation, or S corp, is a type of
corporation that is meant to avoid the double
taxation that hits normal C corporations.
• To become an S corp and avoid that taxation,
you file a special election. Once the business
is officially an S corp, it is no longer taxed
on profits. Instead, all profits, and losses,
are passed on to the stockholders.
• However, this is not possible everywhere. There
are certain states that tax above a certain
limit and some just tax them like a C corp.

20. B corporation
• Benefit corporations, or B corps, have missions
similar to non-profit organizations, but they are,
in fact, for-profit corporations. Their stakeholders
have the goal of providing a public benefit, but
they also want to see a profit.
• Certain state governments also want to see that
public benefit; some require B corps to submit
benefit reports that prove they are contributing to
the good of the public.
• Close corporation
• A close corporation resembles the structure of a B
corp. A lot of the rules associated with smaller
companies also apply to close corporations.
• With other types of corporations, anyone can own
stock. If there is stock available and they have the
money, it’s theirs. This is where close corporations
differ: the stocks are owned by people that are

21. Nonprofit Corporation
• Nonprofit corporations work in charity,
education, religion, literature, or science.
Because they exist to serve the common good,
nonprofit corporations do not pay any state or
federal taxes on their income.
• To obtain this tax-exempt status, nonprofit
corporations must register with their state,
follow similar rules to standard C
corporations, and all money must go back into
the organization. In other words, profits can’t
be distributed to the members of the
organization. This does not mean nonprofits do
not pay their employees.

23. Cooperative
• A cooperative is a private business owned and
operated by the same people that use its
products and or services. The purpose of a
cooperative is to fulfill the needs of the
people running it. The profits are distributed
among the people working within the
cooperative, also known as user-owners.
• There is typically an elected board that runs
the cooperative, and members can buy shares to
be apart of decision-making processes

25. Franchising – Definition, Advantages,
and Disadvantages
• Definition of Franchising
• Franchising is a contractual relationship between a licensor
(franchisor) and a licensee (franchisee) that allows the
business owner to use the licensor's brand and method of
doing business to distribute products or services to
consumers.
• Franchising is the arrangement between two parties where
the first party (the franchiser) grants the second party (the
franchisee) the right to utilize its business processes,
produce and market a service or goods or simply use its
trademark. The franchiser collects a one-time payable
franchise fee and a percentage of sales from the franchisee.

26. Advantages of Franchising
• Access to Better Talent
• By franchising your business, you are attracting hard-working
people to grow and expand your brand in a number of locations.
Talented people choose to take up their own businesses and
gain incentives rather than work under a strict payroll as an
employee.
• Easy Expansion of Capital
• A franchise agreement mandates that the franchisee invests the
capital. Therefore, you increase the capital under your business
without requiring loans from investors or banks.
• Minimized Growth Risk
• Opening an outlet under the franchise model requires little risk
from the franchiser. With a low investment, you can target a
large number of areas and earn high royalties. The percentage
of return is much higher than opening company-owned outlets.

27. Disadvantages of Franchising
• Less Control Over Managers
• You cannot have complete hold over the operations of the outlet. The franchisee
will run the business as an independent model with different goals. Conflicts
between the parties can lead to legal trouble. For example, a franchiser collects a
percentage of sales as a royalty. The franchisee earns via profits generated in the
outlets. A franchiser may issue promotional coupons to boost sales. However,
coupons may boost sales but not boost profits. Thus, the franchisee may object to
it.
• A Weaker Core Community
• Franchisees try to gather profits from each other’s efforts in generating business.
It isn’t easy to get franchisees to work together compared to hired store
managers under one brand name. For example, a franchisee may try to avoid
investing towards advertisement expenses as he may take for granted that the
other franchisees will do it anyway. He may rely on their expenses for his growth
and profits. This may lead to no advertisement at all for the brand name.
• Innovation Challenges
• Introducing a new idea or concept may prove to be a challenge in the franchise
framework. You will have to negotiate with your franchisees and convince them to
accept the new introduction instead of your own outlets where you simply put the
new idea to use.

28. TYPES OF FRANCHISE ARRANGEMENTS
• SINGLE-UNIT FRANCHISE
• Single Unit Franchise (or Direct Unit Franchise) is the most
traditional and historically the most common form of franchising.
Franchisor grants to an entity (the franchisee) the right and
obligation to establish and operate one franchise. The franchisees
have to invest their own capital and apply their own management
skills (generally hands-on).
• MULTI UNIT FRANCHISE
• Franchisor grants to an entity (the multi-unit franchisee) the right and
the obligation to establish and operate more than one franchised
unit. The multi-unit franchisee agrees up front to open a specific
number of locations during a defined period of time. The multi-unit
franchisee must have the financial and managerial capability to
develop multiple units itself.

29. TYPES OF FRANCHISE ARRANGEMENTS
• AREA DEVELOPMENT FRANCHISE
• This type of franchising arrangement is similar to the multi-unit franchise-
the franchisor grants to an entity (the area developer) the right and the
obligation to establish and operate more than one franchised unit. The
area developer agrees up front to open a specific number of locations
during a defined period of time within a defined area.
• MASTER FRANCHISE
• Franchisor grants the right to an entity (the master franchisee) for a
specific country, region or continent, empowering the master franchisee to
provide the full range of products and services of the franchisor through
sub-franchising, in just the same way that the franchisor runs its own
business. The master franchisee, in addition to having the right and
obligation to open and operate a number of locations in a designated area,
also has the right (and sometimes- obligation) to recruit other franchisees.
In effect, the master franchisee becomes sort of a franchisor to those
franchisees who join the system through its master franchise.

30. franchise evaluation checklist
• Find a franchise that fits you
• Owning a franchise is a long-term commitment. Hence ask yourself what interests
you, what you are good at, your goals, your prior experience. How much time can you
commit? Are you comfortable managing employees? Is owning and operating the
franchise going to give you the lifestyle you want? Imagine what a regular day
operating this business will look like.
• Research about franchisors
• Obtain direct information or research online. What is their reputation? Do they have
any lawsuits or disputes? If the franchisor is publicly held, annual financial statements
are published by the Securities and Exchange Commission. The more information you
have, the easier it will be to pick the right franchisor for you. You can also write down
a list of questions for your franchisor before you decide to buy.

31. franchise evaluation checklist
• Find a franchise that suits your budget
• Franchisors usually disclose their financial requirements to potential investors.
However, start-up payments required can vary significantly from franchise to
franchise.
• Obtain franchisee feedback
• Talk to the existing franchisee and get their feedback on the support they are
receiving from the franchisor. Do they have sufficient training and marketing
assistance from the franchisor? Will they be willing to franchise again with the
same franchisor?

32. franchise evaluation checklist
• Examine the Uniform Franchise Offering Circular (UFOC)
• Many franchisors are reluctant to share this document until the interested investor has
applied for the franchise, had his or her background and finances investigated, and
interviewed with the franchisor. The UFOC contains a wealth of information that allows
potential franchisees and their CPAs or attorneys to evaluate the franchise. It includes
information about audited financial statements, franchise fees and start-up payments
required, information regarding any litigation involving the franchisor, required franchise
agreement, and any other contracts the franchisee has to sign. It also includes the
franchisor’s claims regarding the earnings of its franchises. Make sure you receive enough
information to evaluate earnings. Ask for information on the results of franchises in the
same geographical area. If the franchisor is reluctant to provide the information needed for
a good evaluation, it’s a red flag. Federal law requires that franchisors allow at least 10
days for the potential franchisee to review the UFOC.

33. MICRO, SMALL, AND MEDIUM
ENTERPRISES(MSME)
• Micro, Small, Medium Enterprises (MSME’s) are entities that are involved in production,
manufacturing and processing of goods and commodities.
• The concept of MSME was first introduced by the government of India through the Micro,
Small & Medium Enterprises Development (MSMED) Act, 2006.
• Classification of MSME’s
Size of the Enterprise Investment and Annual Turnover
Micro Investment less than Rs. 1 crore
Turnover less than Rs. 5 crore
Small Investment less than Rs. 10 crore
Turnover up to Rs. 50 crore
Medium Investment less than Rs. 20 crore
Turnover up to Rs. 100 crore

34. LEGAL REQUIREMENTS IN SETTING UP
• Legal Framework
The conceptual and legal framework for small scale and
ancillary industrial undertakings is derived from the Industries
Development and Regulation Act, 1951. The Small and Medium
Enterprises Development Bill 2005 which was enacted in June
2006 was renamed as “Micro, Small & Medium Enterprises
Development Act, 2006” aims at facilitating the promotion and
development of small and medium enterprises. MSMEs are
governed by Micro, Small & Medium Enterprises Development
Act, 2006

35. Salient Feature of the Act
• Setting up a National Board for MSMEs
• Classification of Enterprises
• Advisory committees to support MSMEs
• Measures for promotion development and enhancement of MSMEs
• Schemes to control delayed payments to MSMEs
• Enactment of rules by State Governments to implement the MSME Act, 2006 in their
respective states.
• Thus broadly MSMEs are classified into two categories:
a) Manufacturing Enterprises: The enterprises engaged in the manufacture or
production of goods pertaining to any industry specified in the first schedule to the
industries (Development and Regulation) Act, 1951)9or employing plant and
machinery in the process of value addition to the final product having a distinct
name or character or use.

36. b) Service Enterprises: The enterprises engaged in providing or
rendering service.
• Section 2(e) of the Act ” enterprise” means an industrial
undertaking or business concern or any other establishment, by
whatever name called, engaged in the manufacture or
production of goods, in any manner, pertaining to any industry
specified in the First Schedule to the Industries (Development
and Regulation) Act, 1951 or engaged in providing or the
rendering of any service or services.

37. Classification of Enterprises
• For Manufacturing Enterprises investment in plant and machinery
• Micro Enterprises investment in plant and machinery or equipment: not more than INR 10cr and
Annual Turnover, not more than INR 5cr
• Small Enterprises investment in P&M: not more than INR 10cr and annual turnover, not more than
INR 50cr
• Medium Enterprises investment in P&M: not more than INR 50cr and annual turnover, not more
than INR 250cr
• For Service Providers investment in plant and machinery
• Micro Enterprises Does not exceed Rs. 10 lacs
• Small Enterprises More than Rs. 10 lacs but does not exceed Rs. 2 crore
• Medium Enterprises More than Rs. 2 Core but does not exceed Rs. 5 crore

38. Governmental Policies for SMEs
• 1. Atal Incubation Centre (AIC)
• Atal Incubation Centre is a funding scheme that Started in the year 2016. Envisioned by
the NITI Aayog, this aims at supporting entrepreneurs by covering their operating costs of
capital. The approved business ventures can avail up to Rs. 10 crores over a five-year term.
Atal Incubation Centre allows researchers, students, and startup owners to apply for the
scheme across different verticals and sectors. The entrepreneurs can set their company as
a Public-private partnership, Public organization, or as a completely private organization.
The entrepreneur needs to set up space of around 10,000 sq. ft. and should set up the
physical infrastructure within six months of the disbursement of financial assistance.
• 2. MSME Business Loans in 59 Minutes
• Right now, the MSME Business Loans in 59 Minutes is undoubtedly the most discussed
business loan scheme. This program was introduced in the year 2018 by the Government
of India. This scheme is introduced to provide financial assistance to micro, small, and
medium enterprises. The entrepreneurs can avail of loans of up to one crore under this
scheme. This scheme is very quick and, within 59 minutes, you will know about your
eligibility. Disbursement of the financial assistance happens within 1-2 weeks. A majority
of the public sector banks are a part of this scheme

39. Governmental Policies for SMEs
• 3. National Small Industries Corporation Subsidy
• NSIC subsidy offers two forms of financial benefits for small businesses: Raw Material
Assistance and Marketing Assistance. Raw Material Assistance helps to purchase raw
materials from abroad and from India. Marketing Assistance, on the other hand, helps to
improve the sales of products and services with an efficient marketing process. The
program is introduced to provide loans to SMEs who are looking for growth or rapid
expansion.
• 4. MSME Market Development Program
• This development program is designed to provide market expansion assistance to micro,
small, and medium enterprises using international events, trade fairs, and roadshows. This
system helps in the growth of the business by providing them assistance in terms of
expansion into international markets.
• Any startup organization registered under District Industries Centre can apply for this
program under which the to and fro traveling expenses will be borne by the government
for participating in international exhibitions. Not only that, it bears half of the
accommodation charges and ¾ the amount of the participation charges.

40. Governmental Policies for SMEs
• 5. MUDRA Loans
• The Government of India initiates MUDRA loans for providing business finance for micro-
business units. This program was launched with the single motive of ‘paying the unfunded’.
Since most of the time, the small-medium enterprises suffer from lack of funds, the
government launches this program to encourage participation and growth of the startups
across different sectors like trading, manufacturing, services, etc.
• 6. Swarojgar Credit Card
• Swarojgar Credit Card was initiated to provide loans to small-time businessmen like fishers,
homemakers, travel operators, shopkeepers, etc. Under this scheme, the small-time
business owners can take a loan of Rs. 25000 in terms of credit card facilities. A passbook is
also provided to keep track of the financial transactions. The card will be valid for five years
and can be renewed upon satisfactory results from the initial investments.
• 7. Coir Udyami Yojana
• The primary objective of this scheme is to build coir units throughout India. This Coir Board
oversees this system which provides financial assistance up to Rs. 10 lakh to eligible units.
However, the credit term should not exceed one-quarter of the project value. Individual
entrepreneurs, joint ventures, private institutions, the public-private enterprises can avail of
benefits under this scheme.

41. Governmental Policies for SMEs
• 8. Refinancing by NABARD
• This program launched by NABARD focuses on providing refinancing to lending institutions
in agricultural areas. This aims to provide growth to rural enterprises based in diverse areas.
Various handicraft manufacturing industries, rural institutions, and agricultural setups have
taken part in this scheme and made rapid growth.
• 9. The Women Entrepreneurship Platform
• The Government of India introduced the Woman Entrepreneurship Platform to promote
women’s entrepreneurship. The NITI Aayog is the primary driver behind this program and
aims to boost the morale of young and dynamic women entrepreneurs. This scheme has got
three divisions: Gyaan, Iccha, and Karma Shakti. Iccha Shakti aims to empower women to
start a company. Gyaan Shakti offers a favorable environment for setting up a business.
• 10. Stree Shakti Package
• The Stree Shakti Package is provided in India by most branches of the State Bank of India
(SBI) and focuses on providing women in business with a business loan. The biggest benefit
of this startup business loan for women is that loans up to Rs. 5 lakh need no protection. In
addition, some concessions are made by the bank, such as having a reduced interest rate in
the event of the loan exceeds Rs. 2 lakh. But the main downside of this loan is that it is only
open to women who hold a 51% or greater share in the business.