CHAPTER1

What is Entrepreneurship?: An entrepreneur is an individual who owns a firm,

business, or venture, and is responsible for its development. Entrepreneurship is the practice of starting a new business or reviving an existing business, in order to capitalize on new found opportunities. Generally, entrepreneurship is a tough proposition as a good number of the new businesses fail to take off. Entrepreneurial activities differ based on the type of business they are involved in. It is also true that entrepreneurial ventures create a number of new job opportunities. A large number of entrepreneurial projects look for venture capital or angel funding for their startup firms in order to finance their capital requirements. Besides, government agencies and some NGOs also finance entrepreneurial ventures. Entrepreneurship is often associated with uncertainty, particularly when it involves creating something new for which there is no existing market. Even if there is a market, it may not translate into a huge business opportunity for the entrepreneur. A major aspect in entrepreneurship is that entrepreneurs embrace opportunities irrespective of the resources they have access to. A number of entrepreneurs are of the opinion that managing their own business offers far greater security than being an employee elsewhere. They feel entrepreneurship enables them to acquire wealth quickly and cushion themselves against financial insecurity. Additionally, an entrepreneurs future is not at peril owing to the faulty decisions of a finicky employer. So, while some people feel that being employed is less risky, entrepreneurs feel that they are better off starting a business of their own. Today, there is the increasing awareness about entrepreneurship. People arent confining themselves to one business. They are following one business with another. Such entrepreneurs are referred to as serial entrepreneurs. Sometimes these entrepreneurs become angel investors and invest their money in startup companies. As a person gains greater insight into business and entrepreneurship, his chances of succeeding in business improve.

Qualities of entrepreneur
Being an entrepreneur is about more than just starting a business or two, it is about having attitude and the drive to succeed in business. All successful Entrepreneurs have a similar way of thinking and posses several key personal qualities that make them so successful in business. Successful entrepreneurs like the ambitious Richard Branson have an inner drive to succeed and grow their business, rather than having a Harvard Business degree or technical knowledge in a particular field. All successful entrepreneurs have the following qualities:

Inner Drive to Succeed Entrepreneurs are driven to succeed and expand their business. They see the bigger picture and are often very ambitious. Entrepreneurs set massive goals for themselves and stay committed to achieving them regardless of the obstacles that get in the way. Strong Belief in themselves Successful entrepreneurs have a healthy opinion of themselves and often have a strong and assertive personality. They are focused and determined to achieve their goals and believe completely in their ability to achieve them. Their self optimism can often been seen by others as flamboyance or arrogance but entrepreneurs are just too focused to spend too much time thinking about un-constructive criticism. Search for New Ideas and Innovation All entrepreneurs have a passionate desire to do things better and to improve their products or service. They are constantly looking for ways to improve. They're creative, innovative and resourceful. Openness to Change If something is not working for them they simply change. Entrepreneurs know the importance of keeping on top of their industry and the only way to being number one is to evolve and change with the times. They're up to date with the latest technology or service techniques and are always ready to change if they see a new opportunity arise. Competitive by Nature Successful entrepreneurs thrive on competition. The only way to reach their goals and live up to their self imposed high standards is to compete with other successful businesses. Highly Motivated and Energetic Entrepreneurs are always on the move, full of energy and highly motivated. They are driven to succeed and have an abundance of self motivation. The high standards and ambition of many entrepreneurs demand that they have to be motivated! Accepting of Constructive Criticism and Rejection Innovative entrepreneurs are often at the forefront of their industry so they hear the words "it can't be done" quite a bit. They readjust their path if the criticism is constructive and useful to their overall plan, otherwise they will simply disregard the comments as pessimism. Also, the best entrepreneurs know that rejection and obstacles are a part of any leading business and they deal with them appropriately. True entrepreneurs are resourceful, passionate and driven to succeed and improve. They're pioneers and are comfortable fighting on the frontline The great ones are ready to be laughed at and criticized in the beginning because they can see their path ahead and are too busy working towards their dream.

CHAPTER2 Gender basis & women entrepreneurship

Why Women Become Entrepreneurs

Women often leave the corporate world to become entrepreneurs, by starting their own businesses, to provide additional flexibility and life balance in managing their traditional responsibilities as wife and primary caretaker of children. The primary concern for many women is the combined responsibility of work and family (Buttner and Moore, 1997). Helms explains that women often start their own business for three types of personal gains: personal freedom, security, and/or satisfaction (Helms, 1997). She describes freedom seekers as those who are dissatisfied with their employment due to pay inequities or discrimination and desire the freedom to choose their preferred type of work (i.e. hours of work, environment, and people they work with). The work flexibility provided by entrepreneurship is appealing for women in terms of location, often working at home or close to home, and the hours of work. Security seekers are those who have been prompted to become an entrepreneur due to some personal misfortune, such as layoff, downsizing, divorce, death or retirement of their spouse. These security seekers start a business to improve or maintain their family social or economic status. The satisfaction seekers are housewives who do not have any previous work skills or experience but want to prove to others or themselves that they can be productive and useful in society (Helms, 1997).

In examining different theories and the reasons why women become entrepreneurs, I would argue that there is no set and standard profile that can be predictably applied. For every woman who is an entrepreneur or wants to become one, they each have their own set of reasons, motivation, and many cannot be categorized or labeled. I believe that the general profile of women entrepreneurs is similar to their male counterparts as they all are generally innovative, risk takers, autonomous, independent, have a high tolerance for ambiguity and possess an internal locus of control. Although some researchers classify the differences between men and women due to their desires, underlying reasons why they wanted to become entrepreneurs, and family duties, they still possess the same personality/profile that is required of any entrepreneur regardless of their gender. Female and Male Differences

Helm argues in her paper that men and women have different reasons for entering business and that women have internal-stable reasons (I want to be my own boss), while men have external-stable reasons (I saw a terrific market opportunity) (Helm, 1997, p. 17). In contrast, Weiler and Bernasek state the reasons as a more preferable alternative then working in a discriminatory labour market or corporation and that self-fulfillment (rather than profits) is the most significant measure of success for women entrepreneurs. Similar to Weiler and Bernaseks theory, Buttner and Moore argue that women become entrepreneurs due to the blocks in career advancement as a result of gender discrimination resulting in the popular

term glass-ceiling effect (women cannot access the highest levels in an organization or corporation due to their gender). This is not a barrier that men face, but I would argue that this type of discrimination can actually strengthen a womens determination to succeed.

In comparing the management styles of women and men entrepreneurs, Bruni, Gherardi and Poggio explain that women display distinctive features and abilities, transformational leadership. This type of leadership/management style encourages positive interactions and trust-based relationships with subordinates with whom they also share power and information. Gundry, Ben-Yoseph and Posig describe this as the relational practices engaged by women entrepreneurs. This would include collaborative, decentralized decisionmaking and an empowered team atmosphere. Their management style emphasizes open communication and their business goals reflect a concern for the communities in which their businesses resided (Gundry, Ben-Yoseph and Posig, 2002, p. 72). In contrast to other researchers, Gundry, Ben-Yoseph and Posig stated that women in non-traditional industries value money both as a motivator and the preferred outcome. Yet, Buttner and Moores research findings indicate that womens important goals are for professional growth, development, challenge, and self-fulfillment, while mens are preferred higher income. Barriers against female entrepreneurship: 1. Capital Finance

There are many barriers for women entrepreneurs when facing the prospects of starting a new business. Research finds the primary barrier is the access to capital finance. Lack of access to capital has been a primary obstacle for women entrepreneurs 2. Lack of Networks

As mentioned earlier, another prominent barrier that women entrepreneurs face is the lack of networks of information, assistance, and mentors: Networks, which generally are touted as providing valuable information conduits to efficient markets, may once again be at the source of womens difficulties, as their firms may find themselves struggling against an established male-dominated system of customers, suppliers, and creditors.

Social entrepreneur
Social entrepreneurs are individuals with innovative solutions to societys most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.

Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps. Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else. Each social entrepreneur presents ideas that are user-friendly, understandable, ethical, and engage widespread support in order to maximize the number of local people that will stand up, seize their idea, and implement with it. In other words, every leading social entrepreneur is a mass recruiter of local changemakersa role model proving that citizens who channel their passion into action can do almost anything. Over the past two decades, the citizen sector has discovered what the business sector learned long ago: There is nothing as powerful as a new idea in the hands of a first-class entrepreneur. Why "Social" Entrepreneur? Just as entrepreneurs change the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems, inventing new approaches, and creating solutions to change society for the better. While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale.

Sustainable Entrepreneurship
Sustainable entrepreneurship is a spin-off concept from sustainable development that can be defined as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families, local communities, the society and the world at large as well as future generations. Sustainable entrepreneurship is an approach that is applied mostly by large, often industrial companies. In their wake, a whole range of sustainability certificates came about. Because of the proliferation of complex and costly procedures to obtain them, Small and Medium size Enterprises (SMEs) have almost unanimously ignored and repudiated the idea of sustainable entrepreneurship.

Technoprenuers
A technoprenuer is an entrepreneur who is technology savvy, creative, innovative, dynamic, dares to be different and take the unexplored path, and very passionate about their work. They take challenges and strive to lead their life with greater success. They don't fear to fail. They take failure as a learning experience, a stimulator to look things differently and stride for next challenge. Technoprenuers continuously go through an organic process of continual improvement and always try to redefine the dynamic digital economy. Technology and entrepreneurial skills are driving many economies to prosperity. The

most famous of them all is, Bill Gates, who makes Microsoft a household name all over the world. Steve Jobs - well known for his innovations. iPod - most carried gadget by young population. Look at the success of Google - brain child of Sergey Brin and Larry Page. Who don't know Google? Technopreneurship is not a product but a process of synthesis in engineering the future of a person, an organization, a nation and the world. In a digital, knowledge based society, strategic directions or decision-making processes will be demanding and complex. This requires tertiary level and professional development programs and training to produce strategic thinkers who will have the skills to succeed in a dynamically changing global environment. Traditional educational programs, however, lack the methodology to transform today's students into creative, innovative, visionary global leaders who understand the importance of technopreneurship.

CHAPTER3

Manager vs. entrepreneur: Major personal differences

There is a huge difference between a "Manager and an Entrepreneur." While they both hold some similarities, i.e., have to be a driven person, with the goal in sight at all times. Also, their interaction with other people is generally in a more firm tone, when directing insight into a particular project or idea. Managers, for the most part manages other personnel within a company structure. This can range from a supervisor on the flour in a factory setting, and/or the individual that is in charge of the payroll up in the front office. All these people have a great deal of responsibility and manage other people in their normal daily work schedule. It can range from entry level management, all the way to what is known as senior level management. Consisting of people, who hold the titles of President, CFO, Chairman, etc. The one common element to all this above mentioned structure is that they all report to someone else within the company. Including the President of the company, he still has to report to the board, or to the Chairman of the board. Either way all these people still have to report to another person at some point in the average work day. This is the main difference between a "Manager and an Entrepreneur," the mere fact that managers work on someone else schedule, or a set schedule from the company in which you work. Entrepreneurs for the most part work on their own time schedule. Depending on what the current project at hand may be, will dictate what the coming schedule will be like for the duration of the project. If you are a more free spirited type of person, this lifestyle will undoubtedly be more appealing than the normal work week of nine to five. Being an Entrepreneur is something that has to be constantly worked at, in order to maintain a healthy financial lifestyle. Generally this type of person has something to bring to the "proverbial" table that will make actually being an Entrepreneur a doable venture. Whether your interest lay in land acquisitions, or investments of some sort, or being an adventure

seeking person and making a living out of writing articles on different projects. This choice for making a living, definitely gives the individual more time to live life in a more free manner, without the norm of set appointments daily. Hence, not waking to a supervisor every day, just your own sweet self reflecting back in the mirror.

Intrapreneur
When a companys growth begins to dwindle, boardroom meetings grow strained and the finger pointing starts. Executives cry out, "We need a new strategy! We need to hire better people! Our culture is to blame! Our compensation is wrong!" The founder, if he or she is still around, sadly states, "We have more people, resources, and money than ever. But now we are so big we cant even get out of our own way!" Embarrassed, a politically perceptive staffer serves up a popular buzzword. "Intrapreneurs! What we need are Intrapreneurs!" The "hip" executive explains that Intrapreneurs are "Inside Entrepreneurs" who will follow their founders example. The Intrapreneur, he or she promises, will buck the corporate malaise, risk his or her career to get things done and, is willing to "do the right thing to serve the customer". As everyone looks around the room for this potential savior of growth, what do they see? Executives eyes around the table react in three different ways: 1. Most managers eyes look down hoping this latest idea dies before making them change or take chances. 2. The owners eyes look up and out the window reminiscing about the "good old days" when he or she ran a much smaller and focused company. Back then, everyone was an Intrapreneur with "fire in their bellies". 3. One or maybe two sets of younger, brighter eyes sparkle, expressing hope that their time has come to break suffocating company rules and politics stifling opportunities they see but cannot pursue. Optimistically, but sometimes fatally, these people seize the moment and volunteer as "champions" of this new company initiative. What happens? Management chooses an Intrapreneur hoping that this "champion" is victorious. If successful, will this person become the companys leader? On the other hand, will he or she leave and become an Entrepreneur? Too often, the budding Intrapreneur is "beaten" into submission by, and is "forced" to rejoin the first group. Despite their righteousness, why dont more Intrapreneurs succeed? Because in doing what is right, Intrapreneurs hold a mirror up to their peers, forcing them to confront what they and their company have become. Just like a middle-aged, weekend warrior exercising after years of complacence, when a staid company tries to perform like a growth business, the picture is not very pretty. When You Are The Intrapreneur, What Should You Do? Should You Take The Challenge? If you, the Intrapreneur, are offered such a firm-changing opportunity, consider this. You may have the chance to take your career to new heights by helping to drive the future of your company. Whether you are asked to develop a product, service, channel, or application, will you make your mark or seal your fate? Should you: 1. Seize the moment?

2. Pass on the opportunity or, leave to become an entrepreneur? CHAPTER4

INDIAN FAMILY BUSINESS

Family businesses constitute most businesses in India, as anywhere else. Economic liberalisation and rapid expansion in the industrial base in recent years have not only created growth opportunities for many but also have tested their resource capabilities to respond to them; some have chosen to follow the role of a custodian of their existing wealth and followed the preservation route, while some others have followed more of an entrepreneurial route of exploiting opportunities with or without relevant resources, with mixed results. One of the key resources for all of them is their family, and their prime concern is wealth and welfare of their family. A major dilemma many of them have faced particularly in the last decade since economic liberalization began is to choose between combinations of risks and returns of business growth and conservation of wealth of the family. This, of course, is intertwined with the missions of their businesses and families. Family as a social institution is one of the oldest surviving (Goode, 1982), but only in recent years family business, an important arm of it started receiving academic attention. After a detailed review of the existing literature, Zahra and Sharma (2004) concluded that family business research has a long way to go from the present fragmented and descriptive state. There are conceptual differences between family and business (Ward 1987, 2004), though opinions on treating them as conflicting systems vary. Family businesses are found to split up like amoeba as they grow, and very few of them survive beyond three generations, supporting the age old saying, shirt sleeve to shirt sleeve in three generations (Carlock and Ward 2001, McCulloch 2004). Most discussions in this area are based on research in advanced countries. In most developing countries, including India, it still remains a black box; academics and industry observers were puzzled to witness the recent break up in the second generation of the Ambani family, the largest private sector group worth over US $ 20 billion. Even anecdotal evidence is limited to a few biographical sketches (Tripathi, 2004; Piramal, 1998) and consultant impressions (Dutta 1997; Sampath 2001). Sharma and Manikuttys (2005) study of diversified family groups is one of the few notable research pieces from India in this area. In essence, not much is known either about the survival rate or the factors contributing to the successful survival of family businesses in India. Taking the survival bar as three generations, it will be interesting and instructive to know how family businesses perform in the fourth generation. Since the implicit assumption here is that the family has survived as a single entity, it is important to know how the familys involvement in business is and also how the family and outside professionals manage the business. Relevance of success of family business For historical, evolutionary reasons, most countries have family businesses constituting the largest category in terms of ownership; estimates do vary, but is above 75 percent in all cases (Duman 1992, Paisner 1999; Watts and Tucker 2004). About a third of the companies listed in Fortune 500 are family businesses (Lee 2004). Since they normally do not have short term orientation but are interested in growing the family wealth with necessary precautions and have a different set of strategic goals compared to non-family owned private companies

(Ward, 1987; Sharma, Chrisman and Chua, 1997), their long term contribution to economy is significant. This is true with the Indian economy too. However, long term sustenance of family business depends on its smooth survival across generations as shown in Figure 1. Families that successfully survive three or four generations have a complex web of structures, agreements, councils and forms of accountability to manage their wealth (Jaffe and Lane 2004). This seems to be much more evident in the west compared to emerging economies such as India. Reflecting the complexity of the process involved, succession planning has been an area of keen interest for researchers. This could be for a variety of reasons. One, organizational transition from an entrepreneurial stage to a system driven, professionally managed firm is not easy (Churchill, 1983), and involves evolutions, revolutions and crisies (Greiner, 1998). Two, there is often a simultaneous process of transformation taking place in the family and business with the size of activities of both growing (Kepner 1991; Morris et al 1997; Sharma, Chrisman and Chua 2003) There are also challenges of multiple stakeholders for the leadership position (Lansberg,1999). Very often, there is lack of communication between the incumbent and incoming generations. The incumbents do not know how to handle the succession challenge, while the incoming generation does not know how to raise it. Studies in the American context showed that families choose their most competent member(s) to manage the business, disregarding age, gender or bloodline (Chrisman, Chua and Sharma, 1998). This is a reflection of the familys willingness to separate family hierarchy from organizational hierarchy. Given the level of socio-economic and cultural contexts prevailing, it is difficult to be true in the Orient including India. However, post-succession role of the incumbent is not often planned leading to complications. This could lead to what is often described as return of the father in 18 months into the business reflecting the retiring persons return to take charge of the business again. Hence, there is a need for determining the possible role of the incumbent as a mentor or non-executive chairperson. It is also possible for the person to pursue a totally different profession such as teaching! Retirement related planning is increasingly becoming important with growing longevity of people. Although ownership and management succession are the key concerns of a large number of business families, they do not devote enough attention to the process involved. Studies (Watts and Yucker, 2004) have reported that families hesitate to address this issue. Succession dilemma is also closely related to the family policy on entry of new generation, retirement of incumbents and mechanisms for resolving conflicts. A number of case studies on family business taught in leading business schools have brought out the critical role of open communication within the family in developing and sustaining harmony and growth. Entry of new members from the family depends also on the space available in the organization, which in turn depends on the success of the business. While management literature on strategy is rich on vision, not much has been known about the need for synergizing values and vision of family and business on an ongoing basis. This is particularly so in a dynamic environment. Family business authors (eg. Carlock and Ward, 2001) have developed approaches to strategy making in business and family. As discussed by Paisner (1999), developing a sustainable mechanism for business ownership that does not lead to inequitable wealth distribution and avoid amoebic type break up, is also an important area of concern. Paisners idea of a trust route seems to be good, but needs to be empirically validated. Families are united over generations by their vision, values and emotional bondage. There is growing realization that families have a social role to fulfill and be responsible for specific activities including community development through charity (Gallo, 2004 and Grant Thornton, 2001). All the five family businesses studied here, like most other big groups, have

their independent entities for charity in the form of trusts, often run by lady members of the family. This is one way of giving recognition and occupation for ladies, who are not generally involved in business. There exist an unwritten rule in all the families studied here that daughters-in-law do not get involved in business while daughters anyway, go to their inlaws house. The current generation shows signs of this rule changing, slowly. Another source of challenge is in the nature of competitiveness. For instance, when the Indian economy was opened up in 1991, most Indian Companies, of which a huge majority were family owned, were put under competitive pressures for the first time. Many firms, particularly those that grew under government protection (Khanna and Palepu 1997) did not have a strategy to respond and take it as an opportunity rather than threat for a variety of reasons (Ray..). This created huge tensions in business families, sometimes leading to division of assets. It is also true that most businesses face such competitive pressures at different stages in their life, under the influence of economic cycles, product life cycles and firm life cycle. Competitiveness to survive and grow depends on the organizational capabilities, which flow from the family directly and from the resources hired from outside. The need to hire non family resources to build organizations is well recognized. However, an area of conflict is the decision on the roles and responsibilities of outside professionals. Following the arguments of Agency theory (Williamson 1975, Eisenhardt 1989) and the sensitivities of separating ownership and management in family business, conflicts do arise between owner families (principals) and non-family professionals (agents). However, whether they do act as selfcentred managers or forms partnership with principals through emotional and non-monetary relationships (Ghoshal, 2004), depends on the situation. Studies of business histories of a number of groups (Tripathi, 2004, Karanjia, 1997) confirm that these relationships are not purely of the classical principalagent type. There is strong personal and family level bondages out of love and respect, generated over a period of time between the principals and agents. The extent to which such relationship determines the survival and growth of family businesses needs separate research, particularly in the days when professionals loyalty is suspected to be towards their profession and not individual organizations. In essence, the most important areas of concern for the success CHAPTER5 What is American & British trading in entrepreneurship . . . CHAPTER6 MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT 2006 An Act to provide for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental thereto. Whereas a declaration as to expediency of control of certain industries by the Union was made under section 2 of the Industries (Development and Regulation) Act, 1951; And whereas it is expedient to provide for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters

connected therewith or incidental thereto; Be it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:

1. Short title and commencement.-(1) This Act may be called the Micro, Small and Medium Enterprises Development Act, 2006. (2) It shall come into force on such date as the Central Government may, by notification, appoint; and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. 2. Definitions.-In this Act, unless the context otherwise requires, (a) Advisory Committee means the committee constituted by the Central Government under sub-section (2) of section 7; (b) appointed day means the day following immediately after the expiry of the period of fifteen days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier. Explanation.For the purposes of this clause, (i) the day of acceptance means, (a) the day of the actual delivery of goods or the rendering of services; or (b) where any objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier; (ii) the day of deemed acceptance means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services; (c) Board means the National Board for Micro, Small and Medium Enterprises established under section 3; (d ) buyer means whoever buys any goods or receives any services from a supplier for consideration; (e) enterprise means an industrial undertaking or a 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 rendering of any service or services; (f) goods means every kind of movable property other than actionable claims and money; medium enterprise means an enterprise classified as such under sub-clause micro enterprise means an enterprise classified as such under sub-clause small enterprise means an enterprise classified as such under sub-clause 3.Establishment of Board.- (1) With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Board to be known as the National Board for Micro, Small and Medium Enterpris 4.Removal of member from Board.- (1) The Central Government may remove a member of the Board from it, if he (a) is, or at any time has been, adjudged as insolvent; or (b) is, or becomes, of unsound mind and stands so declared by a competent court; or (c) refuses to act or becomes incapable of acting as a member of the Board; or (d) has been convicted of an

offence which, in the opinion of the Central Government, involves moral turpitude; or (e) has so abused, in the opinion of the Central Government, his position as a member of the Board as to render his continuance in the Board detrimental to the interests of the general public. 5.Functions of Board.- The Board shall, subject to the general directions of the Central Government, perform all or any of the following functions, namely: (a) examine the factors affecting the promotion and development of micro, small and medium enterprises and review the policies and programmes of the Central Government in regard to facilitating the promotion and development and enhancing the competitiveness of such enterprises and the impact thereof on such enterprises; (b) make recommendations on matters referred to in clause (a) or on any other matter referred to it by the Central Government which, in the opinion of that Government, is necessary or expedient for facilitating the promotion and development and enhancing the competitiveness of the micro, small and medium enterprises; and (c) advise the Central Government on the use of the Fund or Funds constituted under section 12. 6. Powers and functions of Member-Secretary of Board.- Subject to other provisions of this Act, the Member-Secretary of the Board shall exercise such powers and perform such functions as may be prescribed. CHAPTER III Classification of enterprises, advisory committee and memorandum of micro, small and medium enterprises CHAPTER III Classification of enterprises, advisory committee and memorandum of micro, small and medium enterprises 7. Classification of enterprises.-(1) Notwithstanding anything contained in section 11B of the Industries (Development and Regulation) Act, 1951, the Central Government may, for the purposes of this Act, by notification and having regard to the provisions of sub-sections (4) and (5), classify any class or classes of enterprises, whether proprietorship, Hindu undivided family, association of persons, co-operative society, partnership firm, company or undertaking, by whatever name called, (a) in the case of 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, as (i) a micro enterprise, where the investment in plant and machinery does not exceed twenty-five lakh rupees; (ii) a small enterprise, where the investment in plant and machinery is more than twenty-five lakh rupees but does not exceed five crore rupees; or (iii) a medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees; (b) in the case of the enterprises engaged in providing or rendering of services, as (i) a micro enterprise, where the investment in equipment does not exceed ten lakh rupees; (ii) a small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees; or (iii) a medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees. Explanation 1.For the removal of doubts, it is hereby clarified that in calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as may be specified, by notification, shall be excluded. 8. Memorandum of micro, small and medium enterprises.- (1) Any person who intends to establish, (a) a micro or small enterprise, may, at his discretion, or (b) a medium enterprise engaged in providing or rendering of services may, at his discretion; or (c) a medium enterprise 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

9.Measures for promotion and development.- The Central Government may, from time to time, for the purposes of facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises, particularly of the micro and small enterprises, by way of development of skill in the employees, management and entrepreneurs, provisioning for technological upgradation marketing assistance or infrastructure facilities and cluster development of such enterprises with a view to strengthening backward and forward linkages, specify, by notification, such programmes, guidelines or instructions, as it may deem fit.

10.Credit facilities.- The policies and practices in respect of credit to the micro, small and medium enterprises shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank, from time to time, to ensure timely and smooth flow of credit tosuch enterprises, minimise the incidence of sickness among and enhance the competitiveness of such enterprises. 11.Procurement preference policy.- For facilitating promotion and development of micro and small enterprises, the Central Government or the State Government may, by order notify from time to time, preference policies in respect of procurement of goods and services, produced and provided by micro and small enterprises, by its Ministries or departments, as the case may be, or its aided institutions and public sector enterprises. 12.Funds.- There shall be constituted, by notification, one or more Funds to be called by such name as may be specified in the notification and there shall be credited thereto any grants made by the Central Government under section 13. 13. Grants by Central Government.-The Central Government may, after due appropriation made by Parliament by law in this behalf, credit to the Fund or Funds by way of grants for the purposes of this Act, such sums of money as that Government may consider necessary to provide. 14.Administration and utilisation of Fund or Funds.- (1) The Central Government shall have the power to administer the Fund or Funds in such manner as may be prescribed. (2) The Fund or Funds shall be utilised exclusively for the measures specified in sub-section (1) of section 9. (3) The Central Government shall be responsible for the coordination and ensuring timely utilisation and release of sums in accordance with such criteria as may be prescribed. CHAPTER V Delayed payments to micro and small enterprises CHAPTER V Delayed payments to micro and small enterprises 15.Liability of buyer to make payment.- Where any supplier, supplies any goods or renders any services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day: Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptance.

16.Date from which and rate at which interest is payable.- Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer shall, notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at three times of the bank rate notified by the Reserve Bank. 17.Recovery of amount due.- For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the amount with interest thereon as provided under section 16. 18.Reference to Micro and Small Enterprises Facilitation Council.- (1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council.

CHAPTER7

Small business
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. The legal definition of "small" varies by country and by industry. In the United States the Small Business Administration establishes small business size standards on an industry-by-industry basis, but generally specifies a small business as having fewer than 100 employees.In the European Union, a small business generally has under 50 employees. However, in Australia, a small business is defined by the Fair Work Act 2009 as one with fewer than 15 employees. By comparison, a medium sized business or mid-sized business has under 500 employees in the US, 250 in the European Union and fewer than 200 in Australia. In addition to number of employees, other methods used to classify small companies include annual sales (turnover), value of assets and net profit (balance sheet), alone or in a mixed definition. These criteria are followed by the European Union, for instance (headcount, turnover and balance sheet totals). Small businesses are usually not dominant in their field of operation. Small businesses are common in many countries, depending on the economic system in operation. Typical examples include: convenience stores, other small shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing etc. The smallest businesses, often located in private homes, are called microbusinesses (term used by international organizations such as the World Bank and the International Finance Corporation) or SoHos. The term "mom and pop business" is a common colloquial expression for a single-family operated business with few (or no) employees other than the

owners. When judged by the number of employees, the American and the European definitions of a microbusiness are the same: under 10 employees. There is a notable trend to further segment different-sized microbusinesses; for instance, the term Very Small Business is now being used to refer to businesses that are the smallest of the smallest, such as those operated completely by one person or by 1-3 employees.

Why Small Businesses Fail

Small Business Administration has seen lots of small businesses come and, unfortunately, go. According to the SBA, over 50% of small businesses fail in the first five years. Why? What goes wrong? In his book Small Business Management, Michael Ames gives the following reasons for small business failure: 1. Lack of experience 2. Insufficient capital (money) 3. Poor location 4. Poor inventory management 5. Over-investment in fixed assets 6. Poor credit arrangements 7. Personal use of business funds 8. Unexpected growth Gustav Berle adds two more reasons in The Do It Yourself Business Book: 9. Competition 10. Low sales These figures aren't meant to scare you, but to prepare you for the rocky path ahead. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps. On the Upside It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks.

You will be your own boss. Hard work and long hours directly benefit you, rather than increasing profits for someone else. Earning and growth potential are far greater. A new venture is as exciting as it is risky. Running a business provides endless challenge and opportunities for learning. CHAPTER8

Quick Start Business

A quick start business is one that you can implement and put into action right now. Do you want to start a business now that is going to start putting money into your account? You can find links, information and directories on this site that will lead you to the answers you have been searching for about a quick start business. In starting any business, you should form a business plan. A business plan is going to help you set goals. Set goals for your business that you can turn back to, that you can reflect about when you need to take action to expand and create additional sales for your business during the growing stages of business. Your quick start business plan is going to tackle some quick topics such as:

Who am I going to sell to? Where will the product come from? Do I need to invest a lot of money? Do I need a large space? Will I operate online or offline, or perhaps both? Where is my customer from? How much can I make on every product I sell?

When you can answer these questions, you have researched your quick start business fairly well and are ready to put your plan into action. The business owner, who is well informed, is more likely to be successful in the long run. Avoid investing or starting any business without being able to answer those quick questions listed above. Tips for a quick start business owner Before jumping into any business you should be aware of what an entrepreneur, what a business owner most often needs to have within their self before starting a business. The entrepreneur is one that is self-confident. You have to be confident in your abilities, in your skills and in your dedication. Good ethics and good work habits are traits of an entrepreneur. We each have our own values, which will apply to any and all situations within our lives. Being able to apply ethics and work habits to a quick start business will give you an edge, to be more successful. Yet, another trait of the entrepreneur is good communication skills. Quick start businesses are built to last. In order for a business to last and be profitable, good communication between vendors, customers and you as the business owner will be vital. Additionally, for your success we suggest that an entrepreneur is one that is able to deal with failure, learn from mistakes and continue to move on in the business. Failures are a learning

experience and will benefit you if you learn from them and move on. Dwelling on mistakes and failures will spell doom for your business, no matter what type of business you start. Take charge of your life; take charge of your business, be your own boss using your creative ideas along with the quick start business ideas to build a business for yourself. You make your own choices. As you investigate and learn about any type of quick start business, you will find there is one out there, just waiting for you to put it into action.

Franchise

Simply, a franchise business is a method a company uses to distribute its products or services through retail outlets owned by independent, third party operators. The independent operator does business using the marketing methods, trademarked goods and services and the "goodwill" and name recognition developed by the company. In exchange, the independent operator pays an initial fee and royalties to the owner of the franchise. The company that grants the independent operator the right to distribute its trademarks, products, or techniques is known as the franchiser. The independent, third party business person distributing the franchiser's products or services through retail or service outlets is called the franchisee.

Outsourcing - What is Outsourcing?

So, what is outsourcing? Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. An insurance company, for example, might outsource its janitorial and landscaping operations to firms that specialize in those types of work since they are not related to insurance or strategic to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers. Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing and data entry. Those processes could be done more efficiently, and therefore more cost-effectively, by other companies with specialized tools and facilities and specially trained personnel. Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO). Business process outsourcing encompasses call center outsourcing, human resources outsourcing (HRO), finance and accounting outsourcing, and claims processing outsourcing. These outsourcing deals involve multi-year contracts that can run into hundreds of millions of

dollars. Frequently, the people performing the work internally for the client firm are transferred and become employees for the service provider. Dominant outsourcing service providers in the information technology outsourcing and business process outsourcing fields include IBM, EDS, CSC, HP, ACS, Accenture and Capgemini. Some nimble companies that are short on time and money, such as start-up software publishers, apply multisourcing -- using both internal and service provider staff -- in order to speed up the time to launch. They hire a multitude of outsourcing service providers to handle almost all aspects of a new project, from product design, to software coding, to testing, to localization, and even to marketing and sales. The process of outsourcing generally encompasses four stages: 1) strategic thinking, to develop the organization's philosophy about the role of outsourcing in its activities; 2) evaluation and selection, to decide on the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it; 3) contract development, to work out the legal, pricing and service level agreement (SLA) terms; and 4) outsourcing management or governance, to refine the ongoing working relationship between the client and outsourcing service providers. In all cases, outsourcing success depends on three factors: executive-level support in the client organization for the outsourcing mission; ample communication to affected employees; and the client's ability to manage its service providers. The outsourcing professionals in charge of the work on both the client and provider sides need a combination of skills in such areas as negotiation, communication, project management, the ability to understand the terms and conditions of the contracts and service level agreements (SLAs), and, above all, the willingness to be flexible as business needs change. The challenges of outsourcing become especially acute when the work is being done in a different country (offshored), since that involves language, cultural and time zone differences. CHAPTER9

Venture capital
Venture capital is the term used when investors buy part of a company. A venture capitalist places money in a company that is high risk and has a high growth. The investment is usually for a period of five to seven years. The investor will expect a return on his money either by the sale of the company or by offering to sell shares in the company to the public. When investing venture capital, the investor may want receive a percentage of the companys equity, and may also wish to have a position on the directors board. Always remember that an investor who agrees to place venture capital in a company is looking to make a healthy return. She can demand repayment by the sale of the company, asking for her funds back or renegotiating the original deal. There are three different types of venture capital investment. Early stage financing includes seed financing, start-up financing and first stage financing. Seed financing refers to a small amount of venture capital given to an entrepreneur or inventor who wishes to start a business.

It may be used to build a management team, for market research or to develop a business plan. Start up financing refers to venture capital that is given when a business has been operating for less than a year. Their product will not have been sold commercially yet, and they will just be ready to start doing so. First stage financing is used when companies wish to expand their capital and to proceed full scale and enter the public business arena. Another type of venture capital investment is expansion financing. This covers second and third stage financing and bridge financing. Second stage financing is an investment used to expand a company that is already on its feet. The company is trading and has growing accounts and inventories, although it may not yet be showing a profit. Third stage financing is an investment to companies that are breaking even or becoming profitable. The venture capital is used to expand the business. It may be used in the acquisition of real estate or for further in-depth product development. Bridge financing covers a variety of different meanings. It is a short term, interest only investment. It is used when company restructuring is taking place. The money can also be used if an initial investor wants to liquidate his position and sell his stock. Another common form of venture capital is acquisition financing, in which the investment is used to acquire a percentage or the whole of another company. Venture capital can also be used by a management group to buy out another a line of products or business, regardless of their stage of development. The company they buy out can either be a private or a public company.

DAYA NADAR