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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 numbe of new job r 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 entrepreneur¶s 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 aren¶t confining themselves to one business. They are following one business with another. Such entrepreneurs are referred to as ³serial 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:
True entrepreneurs are resourceful. Entrepreneurs set massive goals for themselves and stay committed to achieving them regardless of the obstacles that get in the way. They're creative. otherwise they will simply disregard the comments as pessimism. 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. Highly Motivated and Energetic Entrepreneurs are always on the move.Inner Drive to Succeed Entrepreneurs are driven to succeed and expand their business. They readjust their path if the criticism is constructive and useful to their overall plan. . The only way to reach their goals and live up to their self imposed high standards is to compete with other successful businesses. They see the bigger picture and are often very ambitious. Also. the best entrepreneurs know that rejection and obstacles are a part of any leading business and they deal with them appropriately. innovative and resourceful. full of energy and highly motivated. 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. passionate and driven to succeed and improve. Strong Belief in themselves Successful entrepreneurs have a healthy opinion of themselves and often have a strong and assertive personality. They are constantly looking for ways to improve. Entrepreneurs know the importance of keeping on top of their industry and the only way to being number one is to evolve a nd change with the times. They are focused and determined to achieve their goals and believe completely in their ability to achieve them. They are driven to succeed and have an abundance of self motivation. Search for New Ideas and Innovation All entrepreneurs have a passionate desire to do things better and to improve their products or service. Competitive by Nature Successful entrepreneurs thrive on competition. 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. 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. Openness to Change If something is not working for them they simply change.
death or retirement of their spouse. 1997). ³Security seekers´ are those who have been prompted to become an entrepreneur due to some personal misfortune. The primary concern for many women is the combined responsibility of work and family (Buttner and Moore. She describes ³freedom 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. Helms explains that women often start their own business for ³three types of personal gains: personal freedom. they still possess the same personality/profile that is required of any entrepreneur regardless of their gender. For every y woman who is an entrepreneur or wants to become one. The ³satisfaction 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. while men have external-stable reasons (³I saw a terrific market opportunity´) (Helm. security. Similar to Weiler and Bernasek¶s theory. These ³security seekers´ start a business to improve or maintain their family social or economic status. and family duties. 1997). by starting their own businesses. risk takers. 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 . and/or satisfaction´ (Helms. downsizing. I believe that the general profile of women entrepreneurs is similar to their male counterparts as they all are generally innovative. motivation. autonomous. underlying reasons why they wanted to become entrepreneurs.e. divorce.CHAPTER2 Gender basis & women entrepreneurship Why Women Become Entrepreneurs Women often leave the corporate world to become entrepreneurs. 17). environment. Female and Male Differences Helm argues in her paper that men and women have different reasons for entering business and that women have ³internal-stable reasons (³I want to be my own boss´). to provide additional flexibility and life balance in managing their traditional responsibilities as wife and primary caretaker of children. and the hours of work. 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. hours of work. I would argue that there is no set and standard profile that can be predictabl applied. such as layoff. and people they work with). often working at home or close to home. 1997). Although some researchers classify the differences between men and women due to their desires. In contrast. they each have their own set of reasons. The work flexibility provided by entrepreneurship is appealing for women in terms of location. and many cannot be categorized or µlabeled¶. In examining different theories and the reasons why women become entrepreneurs. have a high tolerance for ambiguity and possess an internal locus of control. p. 1997. independent.
This type of leadership/management style encourages positive interactions and trust-based relationships with subordinates with whom they also share power and information. Lack of Networks As mentioned earlier. challenge. Their management style emphasizes open communication and ³their business goals reflect a concern for the communities in which their businesses resided´ (Gundry. In comparing the management styles of women and men entrepreneurs. 72). Gundry. decentralized decisionmaking and an empowered team atmosphere. ³Lack of access to capital has been a primary obstacle for women entrepreneurs 2. . Barriers against female entrepreneurship: 1. and mentors: Networks. This is not a barrier that men face. assistance. Yet. as their firms may find themselves struggling against an established male-dominated system of customers. This would include collaborative. Gundry. may once again be at the source of women¶s difficulties. suppliers. Social entrepreneur Social entrepreneurs are individuals with innovative solutions to society¶s most pressing social problems. p. another prominent barrier that women entrepreneurs face is the lack of networks of information. They are ambitious and persistent. tackling major social issues and offering new ideas for wide-scale change. 2002. and creditors. Ben-Yoseph and Posig describe this as the ³relational´ practices engaged by women entrepreneurs. and self-fulfillment. but I would argue that this type of discrimination can actually strengthen a women¶s determination to succeed. Bruni.term ³glass-ceiling effect´ (women cannot access the highest levels in an organization or corporation due to their gender). In contrast to other researchers. Ben-Yoseph and Posig. which generally are touted as providing valuable information conduits to efficient markets. Research finds the primary barrier is the access to capital finance. Capital Finance There are many barriers for women entrepreneurs when facing the prospects of starting a new business. development. Ben-Yoseph and Posig stated that women in non-traditional industries value money both as a motivator and the preferred outcome. Buttner and Moore¶s research findings indicate that women¶s important goals are for professional growth. ³transformational leadership´. while men¶s are preferred higher income. Gherardi and Poggio explain that women display distinctive features and abilities.
and implement with it. and engage widespread support in order to maximize the number of local people that will stand up. dynamic. dares to be different and take the unexplored path. spreading the solution. They take challenges and strive to lead their life with greater success. Technoprenuers A technoprenuer is an entrepreneur who is technology savvy. ethical. the society and the world at large as well as future generations. their families. social entrepreneurs act as the change agents for society. inventing new approaches. and persuading entire societies to take new leaps. committing their lives to changing the direction of their field. Technoprenuers continuously go through an organic process of continual improvement and always try to redefine the dynamic digital economy. They take failure as a learning experience. seize their idea. 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. understandable. concerned with the practical implementation of their vision above all else. creative. seizing opportunities others miss and improving systems. Sustainable entrepreneurship is an approach that is applied mostly by large. Why "Social" Entrepreneur? Just as entrepreneurs change the face of business. a stimulator to look things differently and stride for next challenge. and creating solutions to change society for the better. In other words.Rather than leaving societal needs to the government or business sectors. They are both visionaries and ultimate realists. In their wake. The . often industrial companies. Small and Medium size Enterprises (SMEs) have almost unanimously ignored and repudiated the idea of sustainable entrepreneurship. Social entrepreneurs often seem to be possessed by their ideas. and very passionate about their work. social entrepreneurs find what is not working and solve the problem by changing the system. every leading social entrepreneur is a mass recruiter of local changemakers²a role model proving that citizens who channel their passion into action can do almost anything. Over the past two decades. Each social entrepreneur presents ideas that are user-friendly. innovative. While a business entrepreneur might create entirely new industries. Because of the proliferation of complex and costly procedures to obtain them. a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale. Technology and entrepreneurial skills are driving many economies to prosperity. a whole range of sustainability certificates came about. 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. local communities. They don't fear to fail.
all the way to what is known as senior level management. If you are a more free spirited type of person. Generally this type of person has something to bring to the "proverbial" table that will make actually being an Entrepreneur a doable venture. CFO.e. their interaction with other people is generally in a more firm tone. or investments of some sort. In a digital. Steve Jobs . Including the President of the company. entrepreneur: Major personal differences There is a huge difference between a "Manager and an Entrepreneur. when directing insight into a particular project or idea. strategic directions or decision-making processes will be demanding and complex. or being an adventure . Also. Traditional educational programs. Managers. The one common element to all this above mentioned structure is that they all report to someone else within the company. Consisting of people. will dictate what the coming schedule will be like for the duration of the project. with the goal in sight at all times. Either way all these people still have to report to another person at some point in the average work day. iPod .most famous of them all is. All these people have a great deal of responsibility and manage other people in their normal daily work schedule. or a set schedule from the company in which you work. or to the Chairman of the board. This is the main difference between a "Manager and an Entrepreneur.well known for his innovations.most carried gadget by young population. who makes Microsoft a household name all over the world. lack the methodology to transform today's students into creative. CHAPTER3 Manager vs. i." While they both hold some similarities. knowledge based society. innovative. Chairman. Being an Entrepreneur is something that has to be constantly worked at. for the most part manages other personnel within a company structure. 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. Entrepreneurs for the most part work on their own time schedule. This can range from a supervisor on the flour in a factory setting. Who don't know Google? Technopreneurship is not a product but a process of synthesis in engineering the future of a person. Depending on what the current project at hand may be. have to be a driven person. in order to maintain a healthy financial lifestyle." the mere fact that managers work on someone else schedule. however. he still has to report to the board. It can range from entry level management. who hold the titles of President.. this lifestyle will undoubtedly be more appealing than the normal work week of nine to five. and/or the individual that is in charge of the payroll up in the front office.brain child of Sergey Brin and Larry Page. Whether your interest lay in land acquisitions. etc. an organization. visionary global leaders who understand the importance of technopreneurship. a nation and the world. Look at the success of Google . Bill Gates.
weekend warrior exercising after years of complacence. "Intrapreneurs! What we need are Intrapreneurs!" The "hip" executive explains that Intrapreneurs are "Inside Entrepreneurs" who will follow their founder¶s example. Seize the moment? . Most managers¶ eyes look down hoping this latest idea dies before making them change or take chances. definitely gives the individual more time to live life in a more free manner. Hence.seeking person and making a living out of writing articles on different projects. a politically perceptive staffer serves up a popular buzzword. 2. This choice for making a living. will you make your mark or seal your fate? Should you: 1. But now we are so big we can¶t even get out of our own way!" Embarrassed. service. forcing them to confront what they and their company have become. these people seize the moment and volunteer as "champions" of this new company initiative. or application. The owner¶s eyes look up and out the window reminiscing about the "good old days" when he or she ran a much smaller and focused company. not waking to a supervisor every day. the Intrapreneur. consider this. everyone was an Intrapreneur with "fire in their bellies". and money than ever. what do they see? Executives¶ eyes around the table react in three different ways: 1. If successful. The Intrapreneur. boardroom meetings grow strained and the finger pointing starts. "We need a new strategy! We need to hire better people! Our culture is to blame! Our compensation is wrong!" The founder. when a staid company tries to perform like a growth business. 3. without the norm of set appointments daily. will this person become the company¶s leader? On the other hand. brighter eyes sparkle. What happens? Management chooses an Intrapreneur hoping that this "champion" is victorious. will he or she leave and become an Entrepreneur? Too often. When You Are The Intrapreneur. are offered such a firm-changing opportunity. but sometimes fatally. just your own sweet self reflecting back in the mirror. What Should You Do? Should You Take The Challenge? If you. and is "forced" to rejoin the first group. Intrapreneurs hold a mirror up to their peers. channel. if he or she is still around. Optimistically. Executives cry out. Despite their righteousness. As everyone looks around the room for this potential savior of growth. risk his or her career to get things done and. Intrapreneur When a company¶s growth begins to dwindle. the picture is not very pretty. resources. why don¶t more Intrapreneurs succeed? Because in doing what is right. Whether you are asked to develop a product. "We have more people. Back then. Just like a middle-aged. is willing to "do the right thing to serve the customer". will buck the corporate malaise. the budding Intrapreneur is "beaten" into submission by. sadly states. he or she promises. expressing hope that their time has come to break suffocating company rules and politics stifling opportunities they see but cannot pursue. One or maybe two sets of younger. You may have the chance to take your career to new heights by helping to drive the future of your company.
Even anecdotal evidence is limited to a few biographical sketches (Tripathi. but is above 75 percent in all cases (Duman 1992. though opinions on treating them as conflicting systems vary. Sampath 2001). it still remains a black box. In essence. with mixed results. 1982). of course. while some others have followed more of an entrepreneurial route of exploiting opportunities with or without relevant resources. most countries have family businesses constituting the largest category in terms of ownership. Since the implicit assumption here is that the family has survived as a single entity. not much is known either about the survival rate or the factors contributing to the successful survival of family businesses in India. the largest private sector group worth over US $ 20 billion. This. Most discussions in this area are based on research in advanced countries. as anywhere else. 1998) and consultant impressions (Dutta 1997. There are conceptual differences between family and business (Ward 1987. 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. Sharma and Manikutty¶s (2005) study of diversified family groups is one of the few notable research pieces from India in this area. Relevance of success of family business For historical. 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. In most developing countries. About a third of the companies listed in Fortune 500 are family businesses (Lee 2004). One of the key resources for all of them is their family. Pass on the opportunity or. Taking the survival bar as three generations. Watts and Tucker 2004). supporting the age old saying. and their prime concern is wealth and welfare of their family. 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 . estimates do vary. it will be interesting and instructive to know how family businesses perform in the fourth generation. an important arm of it started receiving academic attention. Paisner 1999. McCulloch 2004). is intertwined with the missions of their businesses and families. it is important to know how the family¶s involvement in business is and also how the family and outside professionals manage the business. leave to become an entrepreneur? CHAPTER4 INDIAN FAMILY BUSINESS Family businesses constitute most businesses in India. Piramal. but only in recent years family business. and very few of them survive beyond three generations. including India. 2004. Family as a social institution is one of the oldest surviving (Goode. academics and industry observers were puzzled to witness the recent break up in the second generation of the Ambani family. Family businesses are found to split up like amoeba as they grow. 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. evolutionary reasons.2. ³shirt sleeve to shirt sleeve in three generations´ (Carlock and Ward 2001. some have chosen to follow the role of a custodian of their existing wealth and followed the preservation route.
This could lead to what is often described as ³return of the father in 18 months´ into the business reflecting the retiring persons return to take charge of the business again. Sharma. Families are united over generations by their vision. Family business authors (eg. councils and forms of accountability to manage their wealth (Jaffe and Lane 2004). long term sustenance of family business depends on its smooth survival across generations as shown in Figure 1. Although ownership and management succession are the key concerns of a large number of business families. retirement of incumbents and mechanisms for resolving conflicts. Chua and Sharma. Entry of new members from the family depends also on the µspace¶ available in the organization. 1998). organizational transition from an entrepreneurial stage to a system driven. 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) have reported that families hesitate to address this issue. This is a reflection of the family¶s willingness to separate family hierarchy from organizational hierarchy. Given the level of socio-economic and cultural contexts prevailing. The incumbents do not know how to handle the succession challenge. 1997). Sharma. This is particularly so in a dynamic environment. Very often. Families that successfully survive three or four generations have a complex web of structures. 1987. professionally managed firm is not easy (Churchill. like most other big groups. Morris et al 1997. 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. developing a sustainable mechanism for business ownership that does not lead to inequitable wealth distribution and avoid amoebic type break up.1999). they do not devote enough attention to the process involved. there is lack of communication between the incumbent and incoming generations. their long term contribution to economy is significant. Hence. 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. 1983). but needs to be empirically validated. As discussed by Paisner (1999). Studies in the American context showed that families choose their most competent member(s) to manage the business. 1998). 2004 and Grant Thornton. have . Carlock and Ward. Succession dilemma is also closely related to the family policy on entry of new generation. This is true with the Indian economy too. One. This could be for a variety of reasons. revolutions and crisies (Greiner. All the five family businesses studied here. However. Reflecting the complexity of the process involved. 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. is also an important area of concern. agreements. disregarding age. Studies (Watts and Yucker. values and emotional bondage. while the incoming generation does not know how to raise it. not much has been known about the need for synergizing values and vision of family and business on an ongoing basis. gender or bloodline (Chrisman. 2001) have developed approaches to strategy making in business and family. Chrisman and Chua 2003) There are also challenges of multiple stakeholders for the leadership position (Lansberg. Chrisman and Chua. This seems to be much more evident in the west compared to emerging economies such as India. succession planning has been an area of keen interest for researchers. and involves evolutions. which in turn depends on the success of the business. there is a need for determining the possible role of the incumbent as a mentor or non-executive chairperson. While management literature on strategy is rich on vision. Paisner¶s idea of a trust route seems to be good. Two.(Ward. 2001). post-succession role of the incumbent is not often planned leading to complications. it is difficult to be true in the Orient including India. However.
In essence. Many firms. small and medium enterprises and for matters . Competitiveness to survive and grow depends on the organizational capabilities. This is one way of giving recognition and occupation for ladies. sometimes leading to division of assets. depends on the situation. particularly in the days when professionals¶ loyalty is suspected to be towards their profession and not individual organizations. go to their inlaw¶s house. 1951. whether they do act as selfcentred managers or forms partnership with principals through emotional and non-monetary relationships (Ghoshal.). often run by lady members of the family. 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. SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT 2006 An Act to provide for facilitating the promotion and development and enhancing the competitiveness of micro. generated over a period of time between the principals and agents. of which a huge majority were family owned. . The current generation shows signs of this rule changing. small and medium enterprises and for matters connected therewith or incidental thereto. under the influence of economic cycles. 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«. who are not generally involved in business. This created huge tensions in business families. However. the most important areas of concern for the success CHAPTER5 What is American & British trading in entrepreneurship . CHAPTER6 MICRO. 2004). . conflicts do arise between owner families (principals) and non-family professionals (agents). The need to hire non family resources to build organizations is well recognized. Karanjia. And whereas it is expedient to provide for facilitating the promotion and development and enhancing the competitiveness of micro. slowly. when the Indian economy was opened up in 1991. were put under competitive pressures for the first time. There is strong personal and family level bondages out of love and respect. However.their independent entities for charity in the form of trusts. Studies of business histories of a number of groups (Tripathi. an area of conflict is the decision on the roles and responsibilities of outside professionals.. which flow from the family directly and from the resources hired from outside. 2004. Another source of challenge is in the nature of competitiveness. Following the arguments of Agency theory (Williamson 1975. There exist an unwritten rule in all the families studied here that daughters-in-law do not get involved in business while daughters anyway. Eisenhardt 1989) and the sensitivities of separating ownership and management in family business. For instance. most Indian Companies. 1997) confirm that these relationships are not purely of the classical principalagent type. The extent to which such relationship determines the survival and growth of family businesses needs separate research. It is also true that most businesses face such competitive pressures at different stages in their life. product life cycles and firm life cycle.
Definitions.² (a) ³Advisory Committee´ means the committee constituted by the Central Government under sub-section (2) of section 7. Small and Medium Enterprises Development Act. Short title and commencement. for the purposes of this Act. or (c) refuses to act or becomes incapable of acting as a member of the Board. 2006. (f) ³goods´ means every kind of movable property other than actionable claims and money. the day of the actual delivery of goods or the rendering of services. unless the context otherwise requires. pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act.(1) The Central Government may remove a member of the Board from it. (c) ³Board´ means the National Board for Micro.(1) With effect from such date as the Central Government may. the day on which such objection is removed by the supplier. by whatever name called. if he² (a) is. of unsound mind and stands so declared by a competent court. or (b) is.Removal of member from Board. or at any time has been. Small and Medium Enterpris 4. 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. (2) It shall come into force on such date as the Central Government may. 1951 or engaged in providing or rendering of any service or services. by notification.. or becomes. (d ) ³buyer´ means whoever buys any goods or receives any services from a supplier for consideration. (b) ³appointed 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. 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.²For the purposes of this clause.Establishment of Board. there shall be established.-(1) This Act may be called the Micro. appoint. 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. 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. in any manner. 2. engaged in the manufacture or production of goods. (e) ³enterprise´ means an industrial undertaking or a business concern or any other establishment. Explanation. adjudged as insolvent. by notification. Small and Medium Enterprises established under section 3. a Board to be known as the National Board for Micro.-In this Act.connected therewith or incidental thereto.. appoint. (ii) ³the day of deemed acceptance´ means. Be it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows: 1. or (d) has been convicted of an .² (i) ³the day of acceptance´ means.² (a) the day of the actual delivery of goods or the rendering of services.
perform all or any of the following functions. (ii) a small enterprise. small and medium enterprises 7. involves moral turpitude.The Board shall. shall be excluded. is necessary or expedient for facilitating the promotion and development and enhancing the competitiveness of the micro. or (iii) a medium enterprise.Subject to other provisions of this Act. 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. ³8.² (a) a micro or small enterprise. and (c) advise the Central Government on the use of the Fund or Funds constituted under section 12. subject to the general directions of the Central Government.. whether proprietorship.²For the removal of doubts. at his discretion. Powers and functions of Member-Secretary of Board. the Central Government may. his position as a member of the Board as to render his continuance in the Board detrimental to the interests of the general public. where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees. where the investment in equipment is more than two crore rupees but does not exceed five crore rupees. small and medium enterprises. for the purposes of this Act.-(1) Notwithstanding anything contained in section 11B of the Industries (Development and Regulation) Act. namely:² (a) examine the factors affecting the promotion and development of micro. advisory committee and memorandum of micro.. advisory committee and memorandum of micro. classify any class or classes of enterprises. in the opinion of the Central Government. by notification and having regard to the provisions of sub-sections (4) and (5). 1951. 1951. as² (i) a micro enterprise. by whatever name called.(1) Any person who intends to establish. as² (i) a micro enterprise. (ii) a small enterprise. 6. where the investment in equipment does not exceed ten lakh rupees. 1951 . small and medium enterprises. in the opinion of the Central Government. in the opinion of that Government. partnership firm. or (b) a medium enterprise engaged in providing or rendering of services may.. or (iii) a medium enterprise. (b) make recommendations on matters referred to in clause (a) or on any other matter referred to it by the Central Government which. the cost of pollution control. or (e) has so abused. 5. where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees. where the investment in plant and machinery does not exceed twenty-five lakh rupees.offence which. (b) in the case of the enterprises engaged in providing or rendering of services. association of persons. industrial safety devices and such other items as may be specified. research and development. where the investment in plant and machinery is more than twenty-five lakh rupees but does not exceed five crore rupees. CHAPTER III Classification of enterprises. may. Classification of enterprises. the Member-Secretary of the Board shall exercise such powers and perform such functions as may be prescribed.Functions of Board. 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. co-operative society. Explanation 1. Memorandum of micro. small and medium enterprises CHAPTER III Classification of enterprises. at his discretion. by notification. Hindu undivided family. company or undertaking.² (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. it is hereby clarified that in calculating the investment in plant and machinery.
where there is no agreement in this behalf. minimise the incidence of sickness among and enhance the competitiveness of such enterprises.(1) The Central Government shall have the power to administer the Fund or Funds in such manner as may be prescribed. 13.For facilitating promotion and development of micro and small enterprises. credit to the Fund or Funds by way of grants for the purposes of this Act.Administration and utilisation of Fund or Funds.Where any supplier. provisioning for technological upgradation marketing assistance or infrastructure facilities and cluster development of such enterprises with a view to strengthening backward and forward linkages. .. as it may deem fit. by order notify from time to time. 10. (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. 12.There shall be constituted. by notification. particularly of the micro and small enterprises. supplies any goods or renders any services to any buyer.Measures for promotion and development..Procurement preference policy.The Central Government may.Credit facilities. as the case may be.Liability of buyer to make payment. the buyer shall make payment therefor on or before the date agreed upon between him and the supplier in writing or..9. from time to time. CHAPTER V Delayed payments to micro and small enterprises CHAPTER V Delayed payments to micro and small enterprises 15. preference policies in respect of procurement of goods and services. 11. the Central Government or the State Government may. by notification.. 14. 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. for the purposes of facilitating the promotion and development and enhancing the competitiveness of micro. such programmes.-The Central Government may. such sums of money as that Government may consider necessary to provide.. produced and provided by micro and small enterprises. after due appropriation made by Parliament by law in this behalf. to ensure timely and smooth flow of credit tosuch enterprises. small and medium enterprises shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank.. or its aided institutions and public sector enterprises. 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. Grants by Central Government. guidelines or instructions. management and entrepreneurs. (2) The Fund or Funds shall be utilised exclusively for the measures specified in sub-section (1) of section 9.Funds. by its Ministries or departments. specify. from time to time.The policies and practices in respect of credit to the micro. by way of development of skill in the employees. small and medium enterprises.
partnerships. are called microbusinesses (term used by international organizations such as the World Bank and the International Finance Corporation) or SoHos. make a reference to the Micro and Small Enterprises Facilitation Council. photographers. However. at three times of the bank rate notified by the Reserve Bank. or sole proprietorships. guest houses. CHAPTER7 Small business A small business is a business that is privately owned and operated.For any goods supplied or services rendered by the supplier. accountants. a small business generally has under 50 employees. turnover and balance sheet totals). a small business is defined by the Fair Work Act 2009 as one with fewer than 15 employees. Small businesses are normally privately owned corporations. restaurants. often located in private homes. 250 in the European Union and fewer than 200 in Australia.. with regard to any amount due under section 17. as required under section 15. 18.16. the buyer shall be liable to pay the amount with interest thereon as provided under section 16. In the United States the Small Business Administration establishes small business size standards on an industry-by-industry basis. Small businesses are usually not dominant in their field of operation. a medium sized business or mid-sized business has under 500 employees in the US. from the date immediately following the date agreed upon. other small shops (such as a bakery or delicatessen). other methods used to classify small companies include annual sales (turnover). Typical examples include: convenience stores. depending on the economic system in operation.(1) Notwithstanding anything contained in any other law for the time being in force. as the case may be. Small businesses are common in many countries. alone or in a mixed definition. In addition to number of employees. 17. with a small number of employees and relatively low volume of sales. but generally specifies a small business as having fewer than 100 employees. The smallest businesses.Date from which and rate at which interest is payable. 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 . for instance (headcount.Reference to Micro and Small Enterprises Facilitation Council.. The legal definition of "small" varies by country and by industry. in Australia. notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force. These criteria are followed by the European Union. hairdressers. value of assets and net profit (balance sheet).In the European Union.Recovery of amount due. tradesmen. By comparison. small-scale manufacturing etc. any party to a dispute may.. lawyers. the buyer shall. be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed day or.Where any buyer fails to make payment of the amount to the supplier.
for instance. go. and take all the necessary steps. Competition 10. success can be yours if you are patient. Why Small Businesses Fail Small Business Administration has seen lots of small businesses come and. Low sales These figures aren't meant to scare you. such as those operated completely by one person or by 1-3 employees. . unfortunately. willing to work hard. Lack of experience 2. There is a notable trend to further segment different-sized microbusinesses. However. over 50% of small businesses fail in the first five years. Personal use of business funds 8. Over-investment in fixed assets 6. the advantages of business ownership far outweigh the risks. According to the SBA. But for the right person. Why? What goes wrong? In his book Small Business Management. Michael Ames gives the following reasons for small business failure: 1. Insufficient capital (money) 3. Unexpected growth Gustav Berle adds two more reasons in The Do It Yourself Business Book: 9. Poor location 4.owners. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. On the Upside It's true that there are many reasons not to start your own business. Poor inventory management 5. the term Very Small Business is now being used to refer to businesses that are the smallest of the smallest. Poor credit arrangements 7. When judged by the number of employees. but to prepare you for the rocky path ahead. the American and the European definitions of a microbusiness are the same: under 10 employees.
what a business owner most often needs to have within their self before starting a business. or perhaps both? Where is my customer from? How much can I make on every product I sell? When you can answer these questions. The entrepreneur is one that is self-confident. you should form a business plan. 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. customers and you as the business owner will be vital. learn from mistakes and continue to move on in the business. Tips for a quick start business owner Before jumping into any business you should be aware of what an entrepreneur. is more likely to be successful in the long run. The business owner. Earning and growth potential are far greater. Quick start businesses are built to last. In starting any business. you have researched your quick start business fairly well and are ready to put your plan into action. Yet. We each have our own values. another trait of the entrepreneur is good communication skills. Avoid investing or starting any business without being able to answer those quick questions listed above. in your skills and in your dedication. for your success we suggest that an entrepreneur is one that is able to deal with failure. Do you want to start a business now that is going to start putting money into your account? You can find links. Failures are a learning . CHAPTER8 Quick Start Business A quick start business is one that you can implement and put into action right now. to be more successful. Additionally.You will be your own boss. Your quick start business plan is going to tackle some quick topics such as: y y y y y y y 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. Good ethics and good work habits are traits of an entrepreneur. You have to be confident in your abilities. Hard work and long hours directly benefit you. In order for a business to last and be profitable. rather than increasing profits for someone else. Running a business provides endless challenge and opportunities for learning. A new venture is as exciting as it is risky. information and directories on this site that will lead you to the answers you have been searching for about a quick start business. Being able to apply ethics and work habits to a quick start business will give you an edge. Set goals for your business that you can turn back to. A business plan is going to help you set goals. which will apply to any and all situations within our lives. who is well informed. good communication between vendors.
The independent. such as payroll. or as they are more commonly called. companies began employing the outsourcing model to carry out narrow functions. billing and data entry. Business process outsourcing encompasses call center outsourcing. the independent operator pays an initial fee and royalties to the owner of the franchise. what is outsourcing? Outsourcing is contracting with another company or person to do a particular function. outsourcing takes many forms. Typically. trademarked goods and services and the "goodwill" and name recognition developed by the company. Take charge of your life. Currently. Those processes could be done more efficiently. The company that grants the independent operator the right to distribute its trademarks. 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. no matter what type of business you start. and therefore more cost-effectively. third party operators. and claims processing outsourcing. just waiting for you to put it into action. for example. you will find there is one out there. Although outsourcing has been around as long as work specialization has existed. But some organizations outsource whole operations. Almost every organization outsources in some way. The independent operator does business using the marketing methods. or techniques is known as the franchiser. in recent history. products. Dwelling on mistakes and failures will spell doom for your business. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO). Organizations still hire service providers to handle distinct business processes. such as benefits management. service providers. a franchise business is a method a company uses to distribute its products or services through retail outlets owned by independent. You make your own choices.What is Outsourcing? So. be your own boss using your creative ideas along with the quick start business ideas to build a business for yourself. by other companies with specialized tools and facilities and specially trained personnel. finance and accounting outsourcing.experience and will benefit you if you learn from them and move on. As you investigate and learn about any type of quick start business. These outsourcing deals involve multi-year contracts that can run into hundreds of millions of . take charge of your business. In exchange. human resources outsourcing (HRO). Franchise Simply. The outside firms that are providing the outsourcing services are third-party providers. the function being outsourced is considered non-core to the business. Outsourcing . An insurance company. third party business person distributing the franchiser's products or services through retail or service outlets is called the franchisee.
Always remember that an investor who agrees to place venture capital in a company is looking to make a healthy return. 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 people performing the work internally for the client firm are transferred and become employees for the service provider. The process of outsourcing generally encompasses four stages: 1) strategic thinking. Some nimble companies that are short on time and money. CSC.dollars. to decide on the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it. project management. to software coding. to testing. Frequently. to work out the legal. Early stage financing includes seed financing. to develop the organization's philosophy about the role of outsourcing in its activities. . the ability to understand the terms and conditions of the contracts and service level agreements (SLAs). The challenges of outsourcing become especially acute when the work is being done in a different country (offshored). above all. 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. There are three different types of venture capital investment. Seed financing refers to a small amount of venture capital given to an entrepreneur or inventor who wishes to start a business. outsourcing success depends on three factors: executive-level support in the client organization for the outsourcing mission. apply multisourcing -. from product design. and the client's ability to manage its service providers. asking for her funds back or renegotiating the original deal. start-up financing and first stage financing. and may also wish to have a position on the director¶s board. Accenture and Capgemini. and 4) outsourcing management or governance. to localization. to refine the ongoing working relationship between the client and outsourcing service providers. EDS. HP. pricing and service level agreement (SLA) terms.using both internal and service provider staff -. since that involves language. such as start-up software publishers. 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. She can demand repayment by the sale of the company. ACS.in order to speed up the time to launch. communication. The investment is usually for a period of five to seven years. When investing venture capital. and even to marketing and sales. 3) contract development. and. ample communication to affected employees. the willingness to be flexible as business needs change. Dominant outsourcing service providers in the information technology outsourcing and business process outsourcing fields include IBM. They hire a multitude of outsourcing service providers to handle almost all aspects of a new project. cultural and time zone differences. the investor may want receive a percentage of the company¶s equity. In all cases. 2) evaluation and selection.
Their product will not have been sold commercially yet. regardless of their stage of development. It is used when company restructuring is taking place. Another common form of venture capital is acquisition financing. The company is trading and has growing accounts and inventories. It is a short term.It may be used to build a management team. The company they buy out can either be a private or a public company. Bridge financing covers a variety of different meanings. Another type of venture capital investment is expansion financing. and they will just be ready to start doing so. It may be used in the acquisition of real estate or for further in-depth product development. DAYA NADAR . in which the investment is used to acquire a percentage or the whole of another company. Start up financing refers to venture capital that is given when a business has been operating for less than a year. This covers second and third stage financing and bridge financing. although it may not yet be showing a profit. Third stage financing is an investment to companies that are breaking even or becoming profitable. Venture capital can also be used by a management group to buy out another a line of products or business. interest only investment. The money can also be used if an initial investor wants to liquidate his position and sell his stock. for market research or to develop a business plan. First stage financing is used when companies wish to expand their capital and to proceed full scale and enter the public business arena. The venture capital is used to expand the business. Second stage financing is an investment used to expand a company that is already on its feet.