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Concept of historical development of entreprenuership

The original entrepreneurs were traders and merchants. The first known instance of humans
trading comes from New Guinea around 17,000 BCE, where locals exchanged obsidian, a black
volcanic glass used to make hunting arrowheads for other needed goods. These early
entrepreneurs exchanged one set of goods for another. The first known instance of humans
trading comes from New Guinea around 17,000 BCE when locals exchanged obsidian, a black
volcanic glass used to make hunting arrowheads for other needed goods. Around 15,000 BCE,
the first animal domestication began taking place, and around 10,000 BCE, the first
domestication of plants. This step toward agriculture was critical for the advancement of the
human species. Now, instead of having to continually move around as nomadic tribes, seeking
new places to hunt and to gather, we could stay in one place. Agriculture allowed us to start to
form larger stationary communities and cities (the basis for civilizations), which set the stage for
the development and spread of human knowledge.  Agriculture changed everything for
humans, enabling the formation of stable rather than migratory populations and laying the
foundation for human populations to grow from 15 million to over 7 billion in the millennia
ahead. As methods of agriculture improved, the first towns and cities were seen. Dependable
food supplies allowed people to build permanent houses and settle in one area. As settlements
increased in size, new social institutions such as religious centers, courts, and marketplaces
developed. The advent of towns produced further specialization, creating jobs in tool-making,
pottery, carpentry, wool-making, and masonry, among others. The specialist created items
faster and of a better quality than each family making its own, increasing standards of living.
When the last Ice Age ended around the year 8,000 BCE, the poles melted, raising sea levels
and creating a divide between Siberia and North America. This divide created two separate
human civilizations for nearly 10,000 years, until European explorers reached the Americas
again in the 15th century.

Entrepreneurship Development Programme:

Past experience has shown that industrial promotion by provision of facilities, technical
assistance, management training, consultancy, industrial information and other services alone
are not sufficient to develop entrepreneurs. It was concluded that the focal point should aimed
at the overlooked entrepreneurial spirit and entrepreneurial characteristics of the people to be
developed. The EDP package was, therefore, launched. Over the years, the EDPs have become a
vital strategy for harness and untapped human skills, to channelise them into accelerating
industrialisation, in general sectors, the small-scale sector, in particular. of late,
entrepreneurship development has become extremely important is achieving the goals of all
round development in the country. Consequently, many entrepreneurial opportunities are
emerging in various fields. Be it electronic, medicine, engineering, agriculture, communication,

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atomic energy, tele communication, food technology and packaging, entrepreneurial
opportunities have surfaced at rapid these and many other areas. Such opportunities however,
become more perceptible and profitable to entrepreneurs when exposed to latest
developments in the respective fields either in terms of technology, use or style of living.
Accessibility and understanding of such information widens the base of opportunity sensing by
potential entrepreneurs.

Objectives of the Programme

In line with the national programme for the promotion and development of small and medium
industries in the countryside, the Industrial Service Institute (IST) under the Department of
Industrial Promotion (DIP) launched the EDP to give substance to the government's policies of
stimulation of economic growth, dispersing industries to rural areas and promoting the
processing of local raw materials. The EDP was considered a part of the industrial development
policy which was articulated in the Five Year National Economic and Social Development Plan.

The Programme had sought to develop entrepreneurial activities in the rural areas of Thailand
asvehicle for economic growth with the achievement of the following objectives

(a) To promote the development of small and medium enterprises that would encourage
self employment among potential entrepreneurs
(b) To provide, in the rural areas, special programmes designed to stimulate new ventures
and encourage expansion of existing activities of small and medium industries
(c) To generate employment and self-employment opportunities in the processing of
indegenious raw materials for local consumption and for export.
(d) To develop entrepreneurial opportunities for potential entrepreneses and upgrade
sommagerial skills for existing entrepreneurs.

For a sound training programme for entrepreneurship development in India, the expert group
constituted by the NIESBUD accepted that it must be able to help selected entrepreneurs to:

 Develop and strengthen their entrepreneurial quality/motivation

 Analyse environment related to small industry and small business;
 Select project/product
 Formulate projects
 Understand the process and procedure of setting up of small enterprise
 Know and influence the source of help/support needed for launching the enterprise;
 acquire the basic management skills
 Know the pros and cons of being an entrepreneur and
 acquaint and appreciate the needed social responsibility / entrepreneurial disciplines

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Some of the other important objectives of entrepreneurial training are:

(i) To let the entrepreneur set or reset the objectives of his business and work
Individually and along with his group for their realisation.
(ii) To prepare him for accepting totally unforeseen risks of business after such training.
(iii) To enable him to take strategic decisions.
(iv) To enable him to build an integrated team to fulfil the demands of tomorrow.
(v) To communicate fast, clearly and effectively.
(vi) To develop a broad vision to see the business as a whole and to integrate his
function with it.
(vii) To enable him to relate his product and industry to the total environment, to find
whis significant in it and to take it into account in his decisions and actions.
(viii) To enable him to cope with and co-ordinate all relevant paper work, most of which
is statutory obligatory.
(ix) To make him accept industrial democracy, that is, accepting workers as partners in
enterprise and
(x) To strengthen his integrity, honesty, and compliance with law, the key to success in
the long run

2. Entrepreneurial motivation and in terms of factor dividing

The entrepreneurial motivation is the process that activates and motivates the entrepreneur to
exert higher level of efforts for the achievement of his/her entrepreneurial goals. In other
words, the entrepreneurial motivation refers to the forces or drive within an entrepreneur that
affect the direction, intensity, and persistence of his/her voluntary behaviour as entrepreneur.
So to say, a motivational entrepreneur will be willing to exert a particular level of effort
(intensity), for a certain period of time (persistence) toward a particular goal (direction).

Motivation is regarded as "the inner state that energizes activities and directs or channels
behavior towards the goal". Motivation is the process that arouses action, sustains the activity
in progress and that regulates the pattern of activity.

P.N.Sharma has identified the following motivating factors:

1. Educational backgroung

2. Occupational experience

3. Desire to do work independently

4. Desire to branch out to manufacturing and related activities

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5. Family backgroung

6. Assistance from government

7. Assistance from financial institutions

8. Availability of technology/raw material

9. Accommodation in industrial estates

10. Machinery on hire purchase

11. Financial assistance from venture capital 12. Encouragement from big business/ MNC's

12. Availability of a franchise

13. Heavy and sustained demand

14. Profit margin

15. Sick units available at a cheap price.

Entrepreneurs are tempted to enter industry because of the three main factors.

 They have strong desire to do something independent in life.

 They have technical knowledge or manufacturing experience.

 Availability of governmental and non-governmental assistance.

M. Chandra Sekhor and M. Gandhara Rao have classified factors behind entrepreneurial growth

into three categories:

(1) Entrepreneurial Ambitions

 To make money
 To continue family business
 Independent living
 To be employed
 To fulfill desire
 To gain social prestige
 To do something unique

(2) Compelling Reasons

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  Unemployment
 Dissatisfaction with the pursued occupation
 make use of idle time
 Make use of technical/professional
 Family responsibility
 Revival of sick unit

(3) Facilitating Factors

 Success stories of entrepreneurs

 Previous association
 Previous experience
 Inherited property
 Influence of others
 Association as apprentices and sleeping partners
 Encouragement and inspiration
 Reinforcing confidence
 Moral support
 Desire to achieve
 Realisation of a dream or an idea or ideas
 Availability of incentives.

3. New era women entrepreneurs and their obstacles

Before the 20th century, women used to operate businesses as a way to supplement

income. They were considered as homemakers with little to do with economy or commerce.
The word ‘entrepreneur’ was only reserved for men. However, with the turn of the century,
the status of women in India has drastically improved due to growing industrialization,
globalization, and social legislation. With the spread of education and awareness, women have
now shifted from their household chores to the higher level of professional activities.

Recent years have seen a substantial rise of women in the various spheres of life.
Women have made a mark in the corporate world, breaking through the barriers of social
compliance, both at home and workplace to become successful entrepreneurs. Today, they are
progressively putting their steps at par with men in the business arena.

According to a recent study, nearly half of India’s entrepreneurs are women. However, there
are still perceptions about the role of women in business as most of the people believe that
women can only set up businesses in designing, fashion, or something creative. 

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Here are some challenges faced by female entrepreneurs in India:

 Financial problems:

Money is to a business what food is to the human body and is vital for any business, big or
small. However, women suffer in this aspect as they do not have any access to extra funds,
familial property and at times garner zero support, material and financial from their own
families. They even face difficulty in securing funding externally as women are perceived as low
risk-takers and hence would not be able to attain the desired success for their venture. To
combat the same, women should take the aid of government schemes provided for females,
SMEs and the likes. The Pradhan Mantri MUDRA Yojana (PMMY) is especially in a place to ‘fund
the unfunded.

 Fierce competition

Women are still struggling to find their footing in a man’s world and entrepreneurship is no
different. There is a lot of competition between existing and upcoming businesses anyway, add
to that a woman trying to make it big without proper financial aid and organizational machinery
to help her with advertising and marketing, promotions and canvassing. Also, having a
standalone product that manages to grab eyeballs of people in the market is hard to manage
which ultimately leads to failure or liquidation of women-run businesses. There is only one way
to race ahead your competition as an entrepreneur – stay lean, position strengths to
weaknesses, aggressively chasing big clients and knowing your numbers. This approach paired
with the right amount of dedication would sure work wonders.

 Lack of education

This is a major hindrance for women as it can be both a foundation of success or failure in any
sphere of life. Nearly 60% of the women are reportedly illiterate in India which has always been
one of the greatest socio-economic problems faced by our country till date. Due to lack of
education and even basic awareness, women are far from happenings around the world,
especially about technological disruptions, rising and falling markets and business knowledge of
any kind. Therefore, lack of education and adequate exposure is also one huge impediment in
the way of women and one of the top problems of women entrepreneurs. However, access to
technology can help accelerate the participation of women in business. Imparting qualitative
education in science, technology, engineering and mathematics subjects (STEM), digital literacy
and early training programs are vital. Also, enabling access to broadband and encouraging
women to have a sound knowledge of hardware, software, and other digital tools will not only
arm with this knowledge for life but will also allow them to scale their businesses.

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  Striking a balance between family & business

Women especially married women with children shoulder plenty of responsibilities. Naturally,
they find it had flitting between home, family, and business and it really can be considered an
‘art’ to be able to achieve a work-life balance with so much on your plate. Working for yourself
does bring about a lot of flexibility, but every business is a roller-coaster ride for the most part,
and managing the same can become extremely difficult with childcare, taking care of old
parents and of course, one’s spouse. Needless to say, it counts as one of the problems of
women entrepreneurs. But, time management is the key here. Setting time for meeting clients,
emails and admin work should be prioritized while keeping in mind familiar duties and the
hours to be devoted to family and children. An effective and right team who can manage the
work delegated to them, stay sharp and stick to commitments can make women’s everyday life
a lot easier.

 Male-dominated Industry

Yes, women entrepreneurs are making waves in the market with their dedication and vigour,
women continue to be seen as inferior to men despite having the right attitude and aptitude for
the job. Male chauvinism is still prevalent in India, and not restricted to simply rural areas but
urban setups as well. The societal and cultural expectations of women have always been
different than that of a man. Though women are now performing both domestic and
professional duties with aplomb, they are perceived as taking on the role of a husband and
outrunning him, thanks to our patriarchal culture. Even in the industry, there are nearly 47% of
women in the workforce yet it is biased towards a ‘male way of doing things.’ To combat this
situation, women can equip themselves with such armour which can help them not just in a
professional space, but lifelong. Cultivating confidence and being assertive so a man, or people,
in general, can hear you. Staying positive will attract more good people and being an aggressive
lifelong learner will help you stay on top of your game. Also, conflict and crisis handling, being
more proactive, taking on leadership roles and supporting your peers is one way to be
respected and revered. This is one of the burning societal and top problems of women
entrepreneurs.

4. Rural entrepreneurship vs urban entrepreneurship

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 Rural entrepreneurship is defined as entrepreneurship whose roots lie in the rural
areas but has a lot of potential to drive various endeavours in business, industry, agriculture,
etc. and contribute to the economic development of the country. India is a country of villages.
Nearly 70% of its major population reside in villages and their livelihood is supported by
agriculture and allied activities. Thus the nations’ economic development depends largely on
the standard of living of the people who live in the rural areas and the level of development
which has actually taken place there.

Indian agriculture is exposed to low productivity, natural calamities, agriculture & cash crop
mismatch, disparities in various public private partnerships. Since the land area for agriculture
is limited, not everyone is employed. This leads to migration of people from rural to urban
areas. Rural development can be made possible through the growth of rural entrepreneurs
which further would contribute in reducing levels of poverty, unemployment, etc. Rural
entrepreneurship also means rural industrialisation.

Urban entrepreneurship is business activity that seeks to address the needs of densely
populated communities. An organization and a set of programs that encourages, facilitates, and
enables the development of for-profit businesses that explicitly and intentionally address the
needs of urban communities. The term “urban entrepreneur” has two principal connotations:
someone who starts with no resources and builds a company or brand into a success; and
someone who uses the perfect blend of book and street smarts to run their business well.

The term urban entrepreneur can be found in research papers dated as early as the 1990’s.
Traditionally, the term “urban” referred to inner-city, low income minorities, while
“entrepreneurs” referred to those that used limited resources to serve their neighborhoods
with business solutions. Nowadays the term has evolve to categorize entrepreneurs that work
in and for cities. In The Emergence of the Urban Entrepreneur, Boyd Cohen states “Currently,
600 cities account for 60 percent of the global economy; by 2025, it is predicted that the top
100 cities will account for 35 percent of the world’s economy.” As a result cities ripe for Urban
Entrepreneurship have garnered much attention in the recent years. Foundations, universities,
venture capitalists and even governments are now pouring resources into cities to create strong
local economies that will transform into international powerhouses.

We assume three hypotheses first, the main difference of rural and urban entrepreneurs is the
different resources in two areas, second, the main difference of rural and urban entrepreneurs
is the cultural differences in two areas, third, rural area has high push effects, urban area has
pull effects

5. Micro, Small and Medium Enterprises Development Act, 2006 and 2020

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Micro, Small and Medium Enterprises Development Act, 2006:

The Micro, Small and Medium Enterprises Development Act, 2006 is an Act of the Parliament of
India. According to the act, "any buyer who fails to make payment to MSMEs, as per agreed
terms or a maximum of 45 days, would be liable to pay monthly compounded interest at three
times the bank rate notified by RBI". Industries are divided into 2 categories. Manufacturing
and services. They are further divided into micro, small and medium. In manufacturing sector,
micro industries capital requirements are under 25 lakh rupees. Small industries are from 25 to
500 lakhs and medium industries are 500 to 1000 lakhs. In services sector, micro industries
capital requirements are under 10 lakh rupees. Small industries are from 10 to 200 lakhs and
medium industries are 200 to 500 lakhs.

Objectives of the Micro, Small and Medium Enterprises Development Act, 2006 The Micro,
Small and Medium Enterprises Development Act was framed with the following objects:

(1) To facilitate the promotion and development of micro, small and medium scale enterprises;
(2) To enhance the competitiveness of micro, small and medium enterprises;
(3) To concentrate on the related matters of micro, small and medium enterprises;
(4) To extend the scope of benefits from small-scale industries undertaking and ancillary
industries to micro, small and medium enterprises.

Salient features of the Micro, Small and Medium Enterprises Development Act, 2006

(1) Establishment of a statutory National Board for micro, small and medium enterprises;
(2) Filing of memorandum;
(3) Measures for protection, development and enhancement of competitiveness of micro,
small and medium enterprises;
(4) Credit facilities;
(5) Provisions related to delayed payments to micro, small and medium enterprises.

Micro, Small and Medium Enterprises Development Act, 2020:

Nobody has any doubt that the Government has always been in favor of providing
benefits to Micro, Small and Medium Enterprises (MSMEs) and that why there are many
benefits of MSME registration. There are many benefits of MSME registration in India, which
can be only availed if the business had registered itself as an MSME/SSI under MSME Act.

It is important to note that the industry was waiting for definition change in MSME for quite a
long time. As there was fear among MSME that if they grow in terms of number, they might
lose the title of being MSME and lose benefits of Government provided for MSME.

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Therefore, it was great news for everyone when a revision in MSME definition was announced
in the Aatmanirbhar Bharat Package on 13 th May, 2020. MSME will no longer have to worry that
growing in number might make them ineligible to avail MSME benefits.

The Government, in the Ministry of Micro, Small and Medium Enterprises has issued
a notification number S.O.1702 (E), dated the 1st June, 2020,  to make the change the MSME
definition in accordance with Aatmanirbhar Bharat Package on 13th May, 2020. New definition
and criterion have been notified and will come into effect from 1st July, 2020.

As per said notification number S.O.1702 (E), dated the 1st June, 2020, the definition of Micro
manufacturing and services units was increased to Rs. 1 Crore of investment and Rs. 5 Crore of
turnover. The limit of small unit was increased to Rs. 10 Crore of investment and Rs 50 Crore of
turnover. Similarly, the limit of medium unit was increased to Rs. 20 Crore of investment and
Rs. 100 Crore of and Rs. 250 Crore of turnover.

Classification of Enterprises (w.e.f. 01.07.2020):

As per revised definition, An enterprise shall be classified as a micro, small or medium

enterprise on the basis of the following criteria, namely:–

Revised MSME Classification

Sr. Enterprises Investment in and Turnover Limit

No.

(i) A Micro Investment in plant and does not exceed one crore
Enterprises machinery or rupees
equipment; AND (<Rs. 1 crore)

Turnover does not exceed five crore

rupees
(<Rs. 5 crore)

(ii) A Small Investment in plant and does not exceed one crore
Enterprise machinery or rupees
equipment; AND (<Rs. 10 crore)

Turnover does not exceed five crore

rupees
(<Rs. 50 crore)

(iii) A Medium Investment in plant and does not exceed one crore

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 Enterprise machinery or rupees
equipment; AND (<Rs. 50 crore)

Turnover does not exceed five crore

rupees
(<Rs. 250 crore)

Earlier, MSMEs are classified in two categories, such as manufacturing and service enterprises.
Now it has been removed both will be the same. MSMEs were defined on the basis of
investments they put, now the revised definitions will also include turnover of the company,
this will be notified once changes in the law are made.Under the new definition, manufacturing
and service MSMEs will be defined under a common metric that will be a mix of investment in
plants and machinery or equipment and turnover.

Existing Definition of MSME valid upto 30th June 2020.

Existing MSME Classification

Criteria: Investment in Plant and Machinery or Equipment

Classification Micro Small Medium

Manufacturing Investment <Rs. 25 Investment <Rs. 5 Investment <Rs. 10

Enterprises lakh crore crore

Service Enterprises Investment <Rs. 10 Investment <Rs. 2 Investment <Rs. 5

lakh crore crore

6. Role of small business in Indian economy

In every economy, small businesses are a million little integral parts of a lavish car which help
the engine keep running but all that someone can see from the outside are the four tyres (i.e
big corporations) that give the car speed. It is confirmed that 65-75% of the innovation in India

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come from the industry of small business. Let us learn about the vital role small businesses play
in our economy and the problems they face.

 Industrial units

In an economy so enormous as India, 95% of the industrial units in the country consist of small
business and 40% of total industrial output is contributed by these small industries. Again, small
businesses bag around 45% of the total exports from India

 Labour-oriented

Small business provides immense opportunities in the rural and semi-urban areas. The weight
of the unemployment faced by the Indian economy is lifted by these small businesses. It is one
of the most important roles of them. Like any other economy having a large labour force, the
Indian government also encourage the operations of small businesses to utilise the labour by
drafting policies and establishing low loan interest rates.

 Human resource

After agriculture, small businesses are the second largest employment provider in the Indian
economy. In comparison to big corporations, small businesses generate the most number of
employment opportunities per unit of capital invested. Therefore, they are the second largest
generators of employment in human resource.

 Utilisation of local resources

The awareness of needs and demands of the local community make the small businesses
emerge in rural and semi-urban areas. Small business is community-based and generally
focused on fewer areas. This gives the opportunity to the businesses to utilise the local
resources like raw material, local talent, labour and demographic opportunities. The utilisation
and the mobilisation of the local resources help elevate the economic condition of that
particular area.

 Flexible and Adaptable

New business opportunity is captured at right time. The strength to adapt and grow in the face
of upcoming changes gives an edge to the small businesses. Also, being the manufacturer and
distributor, small businesses develop a sense of personal touch with the area of business and
their customers. Limited in size and finance, there is little or no government intervention.

Any business whether small, medium or large has its opportunities and challenges. Every coin
has two sides and every line has a lineage.

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Problems of by Small Businesses

 Finance

The inadequacy of funds to funnel in the operations of a small business prove to be a major
hindrance to the development of the small business. Small businesses lack the creditworthiness
needed in the capital market. Small businesses have a poor creditworthiness. The banks and
industrial investors need a collateral security, due to most of the small businesses being
operated in the rural and semi-urban area, these businesses lack the collateral security to get
finance for their business.

 Raw material

For the production purposes, the businesses need raw materials. To get some output, they
need to give some input. The quality of the raw material completely depends upon the quality
of input. But due to a tight budget, these businesses are unable to get a good quality raw
material for their production. Bargaining power is non-existent because of the small quantity of
purchase. Another issue linked here is the shortage of storage facility, because of the shortage
of storage facility the production needs to be quick and the sale good. This puts a heavy strain
on these small businesses to sell their stock as quickly as possible.

 Managerial skills

The operations of small businesses are carried out by a limited number of employees. This
means that a single person usually manages the operations. The pressure on this manger is
immense to satisfy the demands of production. Also, the manager might lack managerial skills
required to operate a unit.

 Skilled labour

Due to a shortage of funds, small businesses are unable to hire the proper candidate for the
job. Also, they are not in a position to give high wages to the employees. This results in the drop
in productivity per employee and rate of labour are high. This proves to be a major obstruction
in the operations of productions.

 Marketing

Marketing is one of the most important links to sell whatever the business plan to or has
produced. Without marketing these businesses will not be able to achieve their goal of sales
they planned. Direct marketing is not possible due to the lack of necessary infrastructure. The

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shortage of finance does not let the business hire a good middleman. These middlemen exploit
these businesses by paying low prices and delaying payments.

“Small businesses already play a pivotal role in India’s economy.But if the country is to fulfil its
ambition of becoming a global manufacturing hub, the sector must grow rapidly.” –Amarendra
Sinha, Special Secretary and Development Commissioner at India’s Ministry of Micro, Small and
Medium Enterprises, on how the sector can lead the manufacturing charge.

7. Most recent fastest growing small sectors and reasons for their growth
After years of strong small business growth, the COVID-19 pandemic up ended everything we
thought we knew, slowing the economy and forcing social distancing. Many small businesses
are struggling or have closed their doors for good as the pandemic continues into its second
year and the recovery effort continues. But the news is not all bad. Many businesses have
found ways to grow and thrive despite widespread uncertainties and the slow return to a new
normal.

Here’s a look at some of the fastest-growing small businesses in recent months.

 Residential remodeling

The construction industry took a hit from the pandemic, with many large scale projects
canceled or delayed. But the combination of a resilient real estate market (thanks to historically
low interest rates) and an uptick in home improvement projects is driving a boom in residential
remodeling jobs. If you’re wondering what businesses are in high demand, ask your local
general contractor, carpenter, electrician and landscaper how their schedules look. In some
regions, they are booked months in advance. The average homeowner spends $7,560 per year
on residential home improvements, and since it's impractical for most major corporations to
perform home improvements on a national scale, skilled construction workers are in demand.
Large-scale projects are also driving growth in some cities. Learn more in our report on “Best
U.S. cities for construction jobs.”

 Home health care

Home health care was already one of the fastest-growing industries before the pandemic, and
this trend is likely to continue. Traveling nurses and other in-home caregivers who are willing to
assist elderly and disabled patients with basic living needs can earn a comfortable wage, even
with little education. As the U.S. population continues to age and medical costs for long-term
care facilities continue to rise, families will be looking for less expensive alternatives to caring
for their elder family members at home. The COVID-19 pandemic might also have a lasting

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impact on the healthcare industry and how people view in-home support. With many home
health aides and personal care assistant jobs requiring only a high school diploma and projected
job growth at 34%, this field will be highly in-demand for many years to come.

 Digital fitness

Gyms across the country shut down in response to the pandemic, sending millions of Americans
to exercise in their living rooms. Though gyms in some states have started to reopen, many
people are unwilling to give up the safety and convenience of at-home workouts. If you’re a
fitness enthusiast who’s good with technology, digital fitness can be an opportunity. The U.S.
Bureau of Labor Statistics (BLS) projects job growth for fitness trainers and instructors to grow
by 15% through 2029 — much faster than average across all job categories. With no advanced
degrees required and a median wage of nearly $20 per hour, becoming an online fitness trainer
has a low barrier of entry for health-conscious entrepreneurs.

 Tutoring

Schools across the country shut their doors seemingly overnight when the coronavirus hit, and
it’s having a lasting effect on students and the way kids learn. Learning pods of isolated student-
teacher groups is a trend that’s continuing into 2021, along with more traditional private one-
on-one tutoring sessions are also in demand. If it’s a career opportunity you’re exploring, you
can learn more in our article about how to start a tutoring business from home.

 Food delivery

COVID-19 has driven incredible growth in the food delivery market, which was already
skyrocketing before the pandemic. By 2025, the online food delivery industry is projected to
grow by nearly 20% to reach a whopping $200 billion in annual sales. While there are already
established players in the market, such as Uber Eats, GrubHub and DoorDash, you can capture a
piece of this financial pie by subcontracting with one of these major delivery players.
Alternatively, you could leverage your local relationships and compete on a local level by
offering cheaper, faster delivery and undercutting the service fees of the national
conglomerates. It’s a competitive market, but there is potential in this fast-growing industry.

 Online plant nurseries

Houseplants were already a millennial trend before COVID-19. Now that people are staying
home more than ever, they’re taking their interest in plants and gardening to a whole new
level. Amazon certainly believes in the trend towards online gardening, as evidenced by the
2018 launch of its Amazon Plants Store. With over $2 billion dollars in online lawn and garden

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sales each year, the online eCommerce giant has proven that an online nursery business model
has merit. While there is certainly a place for brick and mortar nurseries where people can see
and touch the plants, going virtual lets you minimize your startup costs while tapping into a
significant portion of the population that is at home.

8. Sources of finance for small scale sector

Various sources of finance for a small business can be broadly categorized into equity or debt
financing. Equity financing means offering a part in ownership interest in the company against
finance. Debt financing means loans – companies owe money and has to pay interest on the
loan. If we look at investor perspective, research suggests that small businesses fail at a higher
rate than big businesses, thus default risk is also high. This is the reason that small businesses
have less access to credit than larger companies because lending to a small business is riskier
and more expensive than lending to larger companies. Additionally, evaluating small companies
is difficult and not very cost effective as its data is not as easily accessible as large companies. In
spite of all the hurdles, there are many financing options available to small companies. Let’s
look at some of the financing options and deal with the problem of ‘How to Finance a Small
Business?’
Following are some of the Sources of Finance for a Small Businesses:

 Own Capital / Savings :

Number one & the easiest source of finance for a small business is one’s own savings. At
any stage of business, when a business is in need of capital, an entrepreneur can tap into his
personal assets such as – stocks, mutual funds, real estate or jewelry – to raise money. He
can either sell the assets to raise money or take a loan on any of the assets. Entrepreneurs
can invest such personal capital in their business as equity capital, or they can give loans to
their own company.

 Family & Friends :

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Parents, sibling, extended relatives & friends who have excess cash to lend may be willing to
finance your business. They may lend the money to the business in the form of a loan or may be
willing to take an equity stake in the company.

 Banks :

Banks have a special department dedicated to providing loans to small companies. To get a loan
from a bank, companies have to qualify for bank’s minimum criteria. Every bank has its own
criteria with regards to earning potential, annual turnover, credit scores, etc. There are many
types of loans that banks offer such as working capital loans, term loans, loan against property,
etc. Companies can choose the type of loans as per their requirement.

 Small Business Loans:

Each country has certain banks or institutions dedicated to providing loans only to small
businesses, an example of such institute in India is SIDBI, in the USA there is SBA. The main
target of these institutions is to lend money to small businesses who have not been able to
obtain financing on reasonable terms through normal lending channels. These entities usually
give money as loans only.

 Personal loans:
If a company is unable to get a business loan, the entrepreneur might consider getting a
personal loan & using it in their business. The entrepreneur must have a good credit history for
raising a personal loan. We can get a personal loan by mortgaging home, jewelry, etc.

 Trade Credit :
Some small businesses might have suppliers willing to sell on credit. Such credit may range
anywhere from one month to three months. This is a very good method for small companies to
fulfill short-term funding needs. This is an inexpensive method of finance for any small
business.

 Private Equity Firms :

Private equity is a type of equity capital that is not listed on any stock exchange. These firms
raise funds from investors. It then invests these funds to buy capital of promising startups &
small businesses. The drawback of such finance is that the private equity firms will acquire a
controlling position or substantial minority position in a company and then look to maximize

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the value of their investment. Thus, the entrepreneur might not have sole control over the
business decisions, which may lead to conflict.

 Venture Capital Firms :

Venture capital firms are a type of private equity firms, but venture capitalist provides funds to
only those companies who are in the early stages of their business cycles. These are emerging
small companies with high growth potential. Venture capital firms invest in emerging
companies in exchange for equity, or an ownership stake. Small start-up firms may receive
series of rounds of financing from venture capital firms.

 Crowdfunding :

Crowdfunding is a relatively new method when we consider sources of finance. It is a method

of raising funds by borrowing a small amount of money from a large group of people. A typical
example of crowdfunding is proposing people to invest US$ 10, and even if 1000 people invest,
the company can raise US$ 10,000. Such financing is usually done for a particular project. The
benefit of crowdfunding is that small company can make flexible proposals as per their
requirement. They can offer equity against the money or take the money on loan; they can
offer simple interest payments as against compound interest like most regular loans.
Crowdfunding gained popularity after the rise of social media because it became easier to reach
a number of people by putting minimum effort.

9. Special Economic Zone (SEZ) and their role in

developing enterprenuership
A special economic zone (SEZ) is an area in a country that is subject to different economic
regulations than other regions within the same country. The SEZ economic regulations tend to
be conducive to—and attract—foreign direct investment (FDI). FDI refers to any investment
made by a firm or individual in one country into business interests located in another country.

When a country or individual conducts business in an SEZ, there are typically additional
economic advantages for them, including tax incentives and the opportunity to pay lower
tariffs. Special economic zones (SEZs) are typically created in order to facilitate rapid economic

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growth by leveraging tax incentives to attract foreign investment and spark technological
advancement. While many countries have set up special economic zones (SEZs), China has been
the most successful in using SEZs to attract foreign capital.

SEZs are usually created in order to facilitate rapid economic growth in certain geographic
regions. This economic growth is accomplished by leveraging tax incentives as a way of
attracting foreign dollars and technological advancement.

SEZs may also increase export levels for the implementing country and other countries that
supply it with intermediate products. However, there is a risk that countries may abuse the
system and use it to retain protectionist barriers (in the form of taxes and fees). SEZs can also
create a high level of bureaucracy due to their regulatory requirements. This can have the
effect of funneling money away from the system, making it less efficient.

While there are benefits for businesses, individuals, or entities operating within an SEZ, the
macroeconomic and socioeconomic benefits for a country using an SEZ strategy are subject to
debate.

Some of the benefits of SEZ:

 Creation of Economic enclave to cater overseas market.

 Generation of employment opportunities.
 Promotion of investment – domestic and foreign.
 Significant Foreign Exchange Earnings through exports.
 Development of world class infrastructure facilities.

10.Issues in the small scale business marketing and

new forms of marketing techniques

Marketing problems in small scale sector:

Marketing is one of the major stumbling blocks foe small scale industries. Most of the
problems which they face in marketing their products are enumerated below:

 Lack of standardization
 Poor designing
 Poor quality
 Lack of quality control

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  Lack of precision
 Poor bargaining power
 Lack of service after sales
 Scale of production
 Brand preferences
 Distribution contacts
 Lack of marketing language
 Competition
 Ignorance and potential markets
 Financial weakness
 Limited resources
 Lack of building brand image
 Absence of marketing strategy
 Limited local market, heavy dependence on middleman
 Lack of liasion
 Delayed payments and
 Weak bargaining position

As mentioned earlier, because of his weak financial base a small industrialist cannot afford to
spend as beavily as a large unit does on marketing his products. A rare exception is the
pharmaceutical industry, in which the gap between the manufacturing in cost and the selling
price is very large. This is a special situation, in which marketing techniques are different, and
therefore the cost of marketing is very high, particularly the marketing cost of those drugs for
which there is stiff competition. The small industrialists in this line have to follow this trend in
order to survive.

In the absence of a marketing channel of their own, many small units sell their products to large
selling houses. Voltas, for instance, markets a number of products produced by small units.
Similarly, the Bata Shoe Company sells shoes manufactured by the small sector. As a result,
small units invariably get a raw deal. The large companies make handsome profits from
marketing the products of small units by charging a much higher price from the consumer. In
this respect, there is a need for a large number of marketing consortia, whose primary
responsibility will be to assist small units.

New marketing techniques:

1. CTA Copy Test

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2. Email Preview

3. Blog Post Title Test

4. Brand Storytelling

5. A Topic-Based Content Strategy

6. Growing Email Subscriptions

7. Historical Optimization

8. Podcasting

9. Link Building

10. Social Media Based Public Relations

11. Audience Segmentation

12. Brand Extensions

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Reference:
 https://www.mbaskool.com/

 https://en.wikipedia.org/wiki/Micro,_Small_and_Medium_Enterprises_Development_A

ct,_2006

 https://taxguru.in/income-tax/classification-enterprises-micro-small-medium-

enterprises-msme-w-e-f-01-07-2020.html

 https://www.toppr.com/guides/business

 https://www.nextinsurance.com/blog/fastest-growing-small-businesses/

 https://efinancemanagement.com/sources-of-finance/for-small-business

 https://www.investopedia.com/terms/s/sez.asp

 https://blog.hubspot.com/marketing/marketing-techniques

 http://www.simplynotes.in

 Text books:

 T1: Poornima M. Charantimath, Entrepreneurship Development and Small Business

Enterprises, Pearson Publications, New Delhi, 2016.
 T2: Vasant Desai, Fundamentals of Entrepreneurship and Small Business Management,
Himalaya Publishing House, 2019

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