Advance Guide For Setting Up Your New Business Enterprise

6/21/2021 Advance Guide for Setting Up Your New Business Enterprise
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Advance Guide for Setting Up

Your New Business Enterprise
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An Advance Guide for Entrepreneurs for Setting Up a Better

Business Enterprise!
1. Meaning & Introduction:

The entrepreneur is derived from a French word ‘entrepreneur’ which
means to ‘undertake’ the risk of new business. (Venture).
Entrepreneurial growth is being recognised as a key to economic
development of a country.
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a. Entrepreneur – Person
b. Entrepreneurship – process
c. Enterprise – object
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Basically an entrepreneur is one who initiates, set goals and work

towards the attainment of those goals. An entrepreneur is a person
responsible for setting up of a business unit. He is the one who has the
initiative, skill and vision for high achievements.
He undertakes new projects that creates wealth, open up many

employment opportunities and leads to the growth of other sectors.
Entrepreneurship is the act of being an entrepreneur, which is a French
word meaning “one who undertakes an endeavor”.
An entrepreneur is a person who has possession of a new enterprise,

venture or idea, and assumes significant accountability for the inherent
risks and the outcome. He is an ambitious leader who combines land,
labour, and capital to often create and market new goods or services.
Entrepreneurs are considered as the backbone of nation’s progress. They

organise different factors of production like land, labour and capital and
provide goods and services to the society. Generally entrepreneurs are
risk bearers. Entrepreneurship acts as a critical factor for accelerating
economic development of a country.
2. Definitions: Privacy - Terms
i. Peter Drucker in his book “Innovative entrepreneurs” defines

entrepreneurs as innovators. They always search for change, respond to
it and exploit it as an opportunity”.
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ii. According to Evans, “entrepreneurs are persons who, initiate,

organise, manage and control the factors of production to supply goods
and services whether business pertains to agriculture, industry, trade of
profession”.
iii. According to B. C Tandon “Entrepreneurship means the function of

creating something new, organising and coordinating and undertaking
risk and handling economic uncertainty”.
iv. Entrepreneurship is a process or activity that leads an entrepreneur,

look for an opportunity. If it is a process of creating something new and
assuming the risks and rewards. It acts as a critical factor foe
accelerating economic development of a nation.
Promoter:
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Generally it is seen that the two terms ‘Entrepreneur & Promoter are
used interchangeably, but on a careful analysis it is seen that there is a
minute difference between the two terms.
A promoter is a person who does the necessary preliminary work to

bring into existence an incorporated company. He is a person who
conceives an idea of forming a company. Entrepreneurs are innovators,
while promoters are developers. It is rightly said that all entrepreneurs
are promoters and all promoters are entrepreneurs.
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According to Encarta, a promoter is “somebody who secures capital for a

financial or commercial undertaking such as a public company”.
3. Features or characteristics of entrepreneurship:

The following are the characteristics of an entrepreneurship:
1. Process:
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Entrepreneurship is a process of creating something new i.e. new idea,

new concepts, process etc. It is a function of organizing, coordinating
and undertaking risk and handling economic uncertainty.
Entrepreneurship is an exercise containing innovation and creativity.
It is concerned with conceiving an idea, identifying opportunities,

planning, raising capital and taking calculative risk in the business. It is
a process of being an entrepreneur.
It is the practice of starting a new venture or reviving an existing one.

Entrepreneurial process includes exploring, identifying, planning,
researching organizing, launching, and managing entrepreneurial
challenges. Privacy - Terms
2. Purposeful activity:
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Entrepreneurship is a purposeful activity. Entrepreneurship adds to

national development and solve unemployment problem. It place
emphasis on results and output.
The main objective of entrepreneurship is to maximize profit.

Entrepreneurship is an engine for wealth creation and economic growth.
Transforming ideas into opportunities is the role played by
entrepreneurship.
Entrepreneurship is a dynamic activity which helps the entrepreneur to

bring changes in the process of production, innovation, marketing,
management etc.
3. Individual or group activity:
Entrepreneurship is a purposeful activity of an individual or group of

associated individuals. Entrepreneurial activity depended upon the size
of the project. In case of small project the activity is undertaken by an
individual and in case of large project it is undertaken by a group.
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Entrepreneurship is a process whereby an individual or group of

individuals use organised efforts to pursue opportunities and grow by
fulfilling wants and needs through innovation and uniqueness.
4. Innovation and creativity:
Innovation may be defined as exploiting new ideas leading to the

creation of a new product, process or service. Innovation deals with
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coming up with creative idea and turning that idea in to process.

Entrepreneurship is a source of innovation.
Entrepreneurship process involves innovation and creativity.

Entrepreneurs are innovators. They constantly develop new ideas,
concepts and process to survive in a competitive business world.
Entrepreneurship is an art of finding creative solutions to the problems.

Innovation and creativity are essential for sustainable growth and
economic development.
5. Future oriented:
Entrepreneurship is future oriented. They need to forecast the upcoming

complexities in a business environment. To avoid this they have to
undergo SWOT analysis to grab the opportunities and diffuse off threats.
Entrepreneurs start businesses, develop new procedures for the

production and distribution of goods, act as middlemen between
markets and are a source of information.
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The entrepreneur is also characterised by an alertness for opportunities

which have been ignored or unseen by others. These opportunities are
almost always accompanied by some profit.
6. Risk bearing (Risk and Reward):
Entrepreneurship is often associated with uncertainty. Entrepreneurship

is an activity that has a lot of risk. Business is a – risky venture. It cannot
be avoided in business. Unless and until an entrepreneur takes risk, he
cannot make profit.
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An Entrepreneur- has to assume innumerable risk to achieve well

defined objectives and rewards. An Entrepreneur has to be innovative
and he should have good judgement to reduce the uncertainties in the
business.
Some of the risks associated with business are employees going on strike,
fluctuations in the market, changing economic policies etc.
7. Human relations:
Entrepreneurs have close involvement with people. He has to maintain

good relations with his customers. He also needs to maintain good
relations with his employees to motivate them and increase their
efficiency.
So in order to maintain good human relations effective communication

and interpersonal skills are required on the part of an Entrepreneur.
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They find it important to maintain long term relationship with suppliers,

clients, customers etc. An entrepreneur who maintains good human
relations with the community is more likely to succeed in the business.
8. Long term planning:
Planning has always been one of the major functions of an organisation

which leads to success. It is an intellectual process. An Entrepreneur has
to be visionary. He should have far sight vision.
He has to be telescopic in conducting his business activities like taking

risk, sensing opportunities, mobilising resources etc. to attain business
goals.
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9. Facilitates economic development:
Entrepreneurial development is the key to economic development.

Entrepreneur deals with creating wealth through production of goods
and services. This results into rise in per capita income of the country
and helps in upgrading the standard of living of the population.
Entrepreneurship provides employment opportunities resulting into

curbing unemployment situations. This positive trend facilitates
economic development. Therefore Entrepreneurship makes an
important contribution to economic growth
4. Steps in Setting up of a business unit:

The procedure in setting up of a business unit is a time consuming,
complex and complicated activity. It involves various steps, procedures
and formalities.
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The following diagram explains the steps in setting up off a

business unit in detail:
1. Discovery of an idea.
2. Determining the objectives.
3. Identifying opportunities.
4. Detailed investigation of an idea.
5. Undertaking various research.
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6. Designing a business plan.
7. Resource rising.
8. Setting up the enterprise.
9. Managing the enterprise.
1. Idea generation:
This is the most important function of an entrepreneur. Idea is

generated through vision. Idea generation is a critical skill in
entrepreneurship. Insight, observation, experience, education, training
etc. Idea can be generated through environmental scanning and market
survey. An entrepreneur conceives an idea for the formation of a
company.
An entrepreneur is not someone with clever ideas but someone who has
the ability to turn that idea into a real business. An entrepreneur
conceives the idea of launching the project and program the structure of
business. Converting a business idea into a commercial venture is at the
heart entrepreneurship
2. Determining the objectives:

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The next step in setting up business venture is determining the

objectives of the business. Objectives are the goals of a business venture.
Objectives are the ends towards which activities of the organisation are
directed. The entrepreneurs stress the need for high achievement. The
objectives must be realistic in nature.
3. Identifying opportunity: Privacy - Terms
This is the first step in setting up of a business unit Entrepreneur is an

opportunity seeker. As observed by Albert Einstein “In the middle of
every difficulty lies opportunity”. He perceives an opportunity and
strives to translate the opportunity into an idea.
Opportunities do not come suddenly. The entrepreneur must show

alertness to grab opportunities when they come. The opportunities must
be carefully scrutinized and evaluated.
The process of identifying opportunity involves identifying the needs and

wants of the customers, scanning the environment, understanding the
competitor’s policy etc.
4. Detailed investigation of an idea:
The entrepreneur than undergoes detailed investigation of an idea. He

analyse the idea to find out the feasibility whether the project is
profitable of not. An entrepreneur must show the initiative to develop
the idea and implement it in practical sense.
5. Undertakes various researches:
After the selection of a worthy idea, an entrepreneur undertakes various

researches relating to –
a. Market selection
b. Competition
c. Location
d. Machinery and equipment’s
e. Capital Privacy - Terms
f. Customer preferences etc.
6. Designing a business plan:
At this step an entrepreneur prepares a good business plan, the designs

and creates the organisational structure for implementation of his plan.
This plan is further used to achieve the realistic goals.
7. Resource Rising:
The entrepreneur has to proceed further for raising the resources like
men, money, machine, material to commence the venture. Huge capital
is required to install the sophisticated machinery and employ skilled
man power.
A critical step in the creation of a new venture is raising the capital. An

entrepreneur has to take certain steps and follow specified procedures to
obtain Institutional finance.
A number of financial agencies like Banks/SFCs provide loans with

certain applicable terms and conditions.
8. Setting up the Enterprise:
At this step the entrepreneur fulfill some legal formalities. He hunts for
suitable location, design the premises and install machinery. All the
statutory formalities are to be met.
i. Acquiring license.
ii. Permission from local authorities.
iii. Approvals from banks and financial institution.
iv. Registration etc. Privacy - Terms
9. Managing a business enterprise:
Once the project is set up, the entrepreneur must try to achieve the
target of a business plan. This involves setting up of an appropriate
business process. Only proper management can ensure achievement of
goals.
The entrepreneur must be capable of turning his ideas into reality. He

should also have the foresight to anticipate changes to avail of
opportunities and meeting threats likely to arise in the near future.
5. Qualities of a successful entrepreneur:

An entrepreneur has the qualities of many individuals in one.
Entrepreneurship is a creative activity. It involves the process of seeking
opportunities taking calculative risk and deriving benefits by setting a
new venture.
To handle the Entrepreneurial activity in an effective way, entrepreneurs

should have certain qualities. Thus a true entrepreneur has the ability to
identify opportunities, provide the leadership to creatively innovate new
solutions to serve those opportunities, organize, manage, and execute a
plan to serve those opportunities, inspire and motivate stakeholders,
investors, managers, and team members, lead the enterprise into the
future, and pass the mantle of leadership to others when the
organizational needs change. And finally, have the ability to replicate
this process when the opportunity presents itself.
The following are the qualities of a successful Entrepreneur:
1. Creative:
Entrepreneur need to be creative enough to make their business a

success. Creativity means to come up with new ideas, concepts, process Privacy - Terms
and products. He must have a high degree of creativity to strive in a

competitive business world.
Entrepreneurs are business leaders. They are persons with vision. They
have drive and talent and spot out the opportunities and promptly seize
them for exploiting to economic gains.
2. Risk taker:
Entrepreneurs assume high degree of risk and uncertainties. They have

to be innovative to adjust themselves to tackle the changing situations in
the business. He should have the capability to take risk in the critical
situation and learn quickly from the failure.
They do not take more risk, but they try to eliminate risk. They assume
all possible risk of business such as changes in consumer preferences,
technology up-gradation, new inventions etc.
Successful entrepreneurs are not people who never fail but have the
capacity to bounce back after failure. They take their failures as part of
their learning curve.
3. Leadership:
Entrepreneurs should possess the quality of leadership. Leadership is

the act of stimulating other to attain the goals and objectives of the firm.
An Entrepreneur should have leadership skill to direct and guide the
subordinates to get the work done from them and achieve the
organisational objectives.
An entrepreneur is a natural leader with the vision and the drive to do

things right and take the company toward success with ease.
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4. Education:
An Entrepreneur should have a certain minimum level of academic

background. Education enlightens the person and helps them to face ups
and downs of the business with ease.
He should acquire new techniques for handling the business through

training. Excellent communication skills are critical in enabling to
interact well with people of varying personalities.
5. Self-Confidence:
To be successful in life one has to have confidence in himself. An

entrepreneur should have enough confidence to inspire others and
handle the situation in difficult times.
Right aptitude and self confidence helps entrepreneurs to succeed in the

business efficiently and effectively. An entrepreneur has to be optimistic.
He has to be confident even in negative business situations. As the
entrepreneur assumes risk, he must have self-confidence.
6. Decision maker:
Decision making is the fundamental characteristics of an entrepreneur.

It is an act of selecting the correct alternative from the several one. He
has to take decisions regarding –
i. Setting of goals
ii. Formulating policies
iii. To motivate the employees etc.
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Entrepreneurs must have the quality of decisiveness. The success of

business depends upon the right decision. But the entrepreneur should
avoid taking hasty decisions.
7. Organiser:
An entrepreneur should be good organiser. He should have adequate

knowledge to organise and manage the resources viz. capital, human and
natural resources. He has to plan, co-ordinate and control. Such
organisational skills help the entrepreneur to build an enterprise,
nurture it and make it grow.
8. Knowledgeable:
An entrepreneur, to be successful should have good political, legal,

technological knowledge. He should also have a good level of academic
background. He should also be versed with financial and administrative
matters and managerial knowledge like planning, organising, leading,
decision making etc. He should also posse’s technical knowledge and
other technical aspects of trade.
9. Initiative:
Entrepreneurs play a key role in any economy. They are the people who
have the skills and initiative necessary to take good new ideas to market
and make the right decisions to make the idea profitable. They take
initiative of assuming risk and develop their idea into an enterprise.
10. Personality:
An entrepreneur must have good physical, social and mental personality.

He should be intelligent enough to take right decisions and right steps at
the right time.
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He must have social personality, as he interact and has to go along with

the different sections of the society that includes customers,
shareholders, employees, government, suppliers etc.
11. Communication skill:
An entrepreneur needs to be effective communicators. He has to get the

things done from his employees at the right time. For that he needs to
provide instructions and orders clearly.
He also has to keep a track with the customers to understand their

preferences to produce quality produce as per the consumers demand.
6. Problems in setting up of a business:

The factors that affect the growth of business are explained in
detail:
1. Lack of legal knowledge:
The entrepreneur should have adequate legal knowledge to handle legal

affairs efficiently. Lack of legal knowledge on the part of entrepreneurs
may affect smooth conduct of business. He should have knowledge
regarding Factories Act, Wages & Salaries Act, and Workers
Compensation Act etc.-
2. Lack of experience:
An entrepreneur should have enough experience to manage the business

efficiently. Lack of adequate experience may create major problems and
adversely affect the experience.
The major hurdles that the new entrepreneurs face are the availability of
resources to carry out such a business. The most important is the
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allocation of funds that comes in the form of money to research and

development.
3. Lack of finance:
Finance is the life blood of every business. To start up a new venture

requires adequate capital. It is required to meet business expenses like
purchase of raw material, payment of wages and salaries; payment of
interest on loans etc. Lack of finance can create hurdles in setting up of a
business unit.
4. Lack of technology:
Technology is never constant, it keeps on changing. Sophisticated

technology helps in increasing the production capacity and quality of the
products. Lack of suitable technology can hamper the reputation of the
firm. Adoption of suitable technology can prove beneficial to the
business success and vice versa.
5. Problem of human resource:
Organisation is made up of people and people make an organisation. A

firm requires skilled, qualified and talented employees. Lack of
competent staff is another major issue for a business unit.
6. Problem of data:
Entrepreneurship is based on research work. The Entrepreneur need to

conduct a survey for gathering information regarding market condition,
competition, technology, consumer etc. the data collected may not be
accurate and precise. At times it is incorrect and outdated. This hampers
the survival of a business.
7. Problem of marketing:
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The Entrepreneur should have marketing knowledge. This helps to face

cut-throat competition in all sectors. Lack of marketing efforts and
knowledge with respect to product, pricing, distribution and promotion
hampers the Entrepreneurial growth.
7. Types of Entrepreneur:
Entrepreneurs in modern day world found to be engaged in various
types of activities. They are found to be among labourers, exporters,
professionals and commercial activities.
The following are the different types of Entrepreneurs:
1. Business Entrepreneur:
Business Entrepreneurs are those who conceive an idea to start a

business and turn their ideas into reality. They set up and promote
business unit. They grab the market opportunities.
Business Entrepreneurs are not concerned with manufacturing activities

and so in the recent years they are treated as trading Entrepreneurs.
2. Agricultural Entrepreneurs:
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The Entrepreneurs who undertake agricultural activities like planting

crops, cash crops, floriculture, animal husbandry, fertilizers and other
inputs of agriculture are termed as agricultural Entrepreneurs.
The government motivates today’s Entrepreneurs to use sophisticated

technology for more volume of production.
3. Technical Entrepreneur:
Technical entrepreneur demonstrates innovative capabilities in

production of goods and services. They are technically educated and
expertised. As they are technically trained, they focus more on
production than marketing.
4. Induced Entrepreneurs:
Such Entrepreneurs are induced to take up Entrepreneurial task due to

various policy measures, incentives, concessions and take benefits
offered by the government to start a venture.
The government announces industrial policies in which subsidies and

incentives in various forms are provided to the person interested to start
a venture.
5. Women Entrepreneurs:
Women Entrepreneur is those women who generate a business idea,

identify opportunities, mobilise resources and operate enterprise. In
today’s world women Entrepreneurs contribute and plays a significant
role in the economic development of a country.
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6. Professional Entrepreneurs:
Those Entrepreneurs are interested in establishing new enterprise by

selling out existing business. They are dynamic and flexible and keep on
identifying innovative ideas to develop alternative projects.
7. Rural Entrepreneurs:
Entrepreneurs who select rural based industrial opportunity in either

khadi or village industries are termed as rural Entrepreneurs. The rural
Entrepreneurs are given ample scope to establish village industry for
bringing regional balance. Rural Markets constitute an important
segment of overall economy.
8. Entrepreneurs by inheritance:
Those are the Entrepreneurs who inherit the business of family through
succession. In India there are large numbers of family owned business
houses. Entrepreneurs like Tata’s, Birla’s, Ambani come under this
category. Such type of business is passed from one generation to
another.
8. Challenges before Indian entrepreneurs:

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The youth of today are more entrepreneurial. Entrepreneurs are the

backbone of any economy. They are technologically competent,
passionate, independent and challenging. They believe in continuous
improvement and revolutionary change.
The most important responsibility of an entrepreneur as an individual is

the establishment of ethical climate for his venture. Globalization
brought both challenges and opportunities for Indian entrepreneurs.
The following are the challenges before Indian entrepreneurs:
a. Lack of knowledge and information:
One of the most important inputs of an entrepreneur is “information”,

without which it is difficult to take any decision. The entrepreneur has to
gather information relating to market, consumer behaviour, and
competitors, technical, financial and legal aspects. Collecting relevant
information can prove a challenge to an entrepreneur.
b. Competition:
In today’s dynamic world of global competition, an entrepreneur must

continuously innovate new and innovative products to compete
successfully. They generally face potential threats from larger
corporation. An entrepreneur has to be innovative because the presence
of innovation drives them towards profit.
c. Legal provisions:
An entrepreneur usually face possible risk associated with laws and

regulation. There are many important legal issues in starting a new
venture. The entrepreneur should be prepared for future legislations.
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He must be well versed with legal and procedural formalities related to

acquiring license, financial assistance etc. to succeed in the business.
d. Managing resources:
Management of resources is a major challenge before an entrepreneur.

Management of human resource includes judgement, insight, creativity,
vision and intelligence of individual members in an organisation.
Managing human resource includes social skill on the part of an
entrepreneur.
An entrepreneur should also have competency in managing financial

resources. Financial represents money assets. They form a valuable
resource without which no firm can get very far. It is the challenge before
an entrepreneur to determine the sources of resources.
e. Business planning:
Planning is one of the major challenges faced by an entrepreneur. As

planning precedes organizing, directing, motivation and controlling.
Business plan should be properly planned and implemented. Effective
decision depends upon proper planning.
Decision-making pervades all managerial functions. The effectiveness of

management depends upon the quality of decision-making.
9. Entrepreneurial Development Programme:

1. Entrepreneurship acts as a critical factor for accelerating economic
development of a country. The EDP covers the entire venture creation
process, from idea generation to building a viable global business.
2. It helps in the creation of self-employment opportunities and

reduction of unemployment. In recent years the government and private Privacy - Terms
agencies have initiated strategies and programme for Entrepreneurial

growth.
3. There are number of schemes which are offered by various

government and semi government organisations to promote
Entrepreneurship. The following are discussed in detail:
4. The credit of sowing the seeds for Entrepreneurial Development

Programme in India can be given to Dr. D. C. Mclelland; a noted
psychologist from Haward University in USA. This programme was
conducted for energetic and potential Entrepreneurs.
5. Entrepreneurship is regarded as one of the important determinants of

the industrial growth of the country. Various attempts have been made
to promote and develop entrepreneurship by giving specific assistance to
improve the competence of the entrepreneurs and his enterprise so as to
make him and his entrepreneurial so that more people become
entrepreneurs.
6. In order to meet the global demand and the new challenges thrown to
the Indian industry and also to generate employment, entrepreneurship
development has to be given a priority.
The entrepreneurs should possess required skills, ability to grasp

opportunities which offer economic advantages, orientation towards
applying knowledge to maximize gains, business skills, and leadership
qualities and above all confidence that one can make things happen.
10. Objectives of EDP:

Entrepreneurial development programme act as a driving force for
encouraging people to make their career in entrepreneurship. It was
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designed with the aim of encouraging self employment and creating

wealth among educated unemployed youth.
This programme acts as a motivator and develops potential skills among

people to undertake their own ventures.
1. Accelerating industrial development.
2. Developing Entrepreneurial qualities.
3. Motivating the prospective entrepreneurs to achieve the goals.
4. Enhancing the growth of small and medium scale enterprise.
5. They offer better potential for employment generation and wider

dispersal of industrial ownership.
6. It has provided a new path and career choices to large number of

people.
7. Aims at making optimum utilisation of resources.
8. Eradicate unemployment and poverty.
9. Balanced regional development and developing backward areas by

encouraging rural entrepreneurs.
10. Improving standard of living.
Various Institutions conducting Entrepreneurship

Development Programmes in India:
1. Entrepreneurship Development Institute of India (EDII):

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The Entrepreneurship Development Institute of India (EDI) is an

autonomous body, set up in 1983. It is sponsored by apex financial
institutions, namely the IDBI Bank Ltd, IFCI Ltd. ICICI Ltd and State
Bank of India (SBI).
This Institute is registered under the Societies Registration Act 1860 and
the Public Trust Act 1950. EDI undertake research and training activities
for encouraging new and emerging entrepreneurs.
2. Small Industry Development Bank of India (SIDBI):
This is a subsidiary if Industrial Development Bank Of India (IDBI).
SIDBI was established in April 1990 under an Act of Indian

Parliament as the principal financial institution for:
1. Promotion.
2. Financing.
3. Development of industry in the small scale sector.
4. Coordinating the functions of other institutions engaged in similar

activities.
The Small Scale Industries (SSIs) sector is a vibrant and dynamic sector
of the Indian economy.
3. National Institute for entrepreneurship and small business

development (NIESBUD):
It was established in 1983 by the Ministry of Industry, Government of

India. It aims at co-ordinating the activities of various institutions
engaged in entrepreneurship development. Privacy - Terms
It provides training aid and helps to develop entrepreneurial culture in

the society. It conducts national level and international level training
programmes.
4. National Alliance of Young Entrepreneurs (NAYE):
NAYE was established in 1967, NAYE contributed in encouraging women

entrepreneurs. It set up women’s wing in 1975. Federation of Indian
Women Entrepreneurs (FIWE), .is a National-level organization which
was founded in 1993, is one of India’s Premier Institution for Women
thoroughly devoted towards Entrepreneurship Development.
The objective of this organization is to promote the Economic

Empowerment of Women, particularly the SME segment, by helping
them to become successful entrepreneurs and become a part of the
mainstream industry.
a. Technology obsolescence
b. Managerial inadequacies
c. Delayed Payments
d. Poor Quality
e. Incidence of Sickness Privacy - Terms
f. Lack of Appropriate Infrastructure
g. Lack of Marketing Network
Entrepreneurship plays an important role in the development of

economy. Every developed nation have benefited from
theirentrepreneurs in building the economy. Bill Gate in USA is one such
entrepreneur, who steered the software industry to new heights through
his Microsoft Company. In India, numerous successful entrepreneurs
exist, who successively built empire of their corporate structure.
Dhirubhai Ambani grew to a phenomenal height through Reliance

industries. Jamsheedjee Tata, in Steel Industry, Ratan Tata etc. is few
other examples of successful entrepreneurs in recent times.
11. Project report:

Project report is the summary of the entire project. Project report
contains details about the purpose, objectives, scope, sponsorship and
other details of the proposed project. Project report is the report on
entire plan and scheme of the proposed project.
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Project reports must be clear, concise and complete and contain the right
level of detail for target audience. A good plan of action is useless unless
it is executed efficiently; the entrepreneur or promoter with the help of
the expert prepares a project report.
It is prepared on the basis of project planning. Project report helps in

availing financial aid from banks and financial institutions.
12. Feasibility Study:

A feasibility study is an evaluation of a proposed project. It is the study
of the project to find out whether the project is profitable or not. In other
words, feasibility study involves an examination of the operations.
Project has to be viable not only in technical terms but also in economic
and commercial terms too. The objective of financial analysis is to
ascertain whether the proposed project will be financially viable.
Feasibility study is a detailed investigation of the proposed project to

determine whether the project is financially, economically and
technically viable or not. Feasibility Study contains the comprehensive,
detailed information about the business structure, availability of
resources and whether the business will run efficiently or not.
Feasibility study is conducted in the following areas:
Market Feasibility:
It involves study of market situation, current market, anticipated future

market, competition, potential buyers, etc.
Technical Feasibility:
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This study involves study of technological aspects related to the business,

like location of the business, layout, infrastructure, transportation,
resource availability etc.
Financial Feasibility:
Financial feasibility denotes the financial aspects of the business. This

study helps to understand requirement of start-up capital, sources of
capital, returns on investment, etc. It helps to assess the financial health
of the business.
Personnel Feasibility:
This study is important to determine the size and particulars of

manpower, their job description, job titles and standards. Also, salary
rates and allowance are noted in this type of standard.
13. Feasibility Report:

Feasibility report is the final conclusion drawn about the business after
conducting the feasibility study. The feasibility report includes the
confirmation of the proposed project. It gives the detail about technical,
economic and financial, environmental, socio-cultural and operational
aspects of the project.
It is a formal document prepared by the experts. It gives the information

on the authenticity of the feasibility study. The feasibility report answer
the question ‘ the plan must be implemented or not’.
The feasibility report contains information on:
a. It helps him to determine the viability of the venture.
b. It provides guidance to the entrepreneur in planning realistic goals. Privacy - Terms
c. It helps to identify possible roadblocks.
d. It is a pre-requisite to obtain finance.
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TABLE OF CONTENTS
1. Meaning & Introduction:

2. Definitions:
3. Features or characteristics of entrepreneurship:
4. Steps in Setting up of a business unit:
5. Qualities of a successful entrepreneur:
6. Problems in setting up of a business:
7. Types of Entrepreneur:
8. Challenges before Indian entrepreneurs:
9. Entrepreneurial Development Programme:
10. Objectives of EDP:
11. Project report:
12. Feasibility Study:
13. Feasibility Report:
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Advance Guide For Setting Up Your New Business Enterprise

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Advance Guide For Setting Up Your New Business Enterprise

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6/21/2021 Advance Guide for Setting Up Your New Business Enterprise

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Advance Guide for Setting Up

An Advance Guide for Entrepreneurs for Setting Up a Better

1. Meaning & Introduction:

Image Courtesy : agrifood.net/wp-content/uploads/DG-meeting.jpg

Basically an entrepreneur is one who initiates, set goals and work

He undertakes new projects that creates wealth, open up many

An entrepreneur is a person who has possession of a new enterprise,

Entrepreneurs are considered as the backbone of nation’s progress. They

2. Definitions: Privacy - Terms

i. Peter Drucker in his book “Innovative entrepreneurs” defines

ii. According to Evans, “entrepreneurs are persons who, initiate,

iii. According to B. C Tandon “Entrepreneurship means the function of

iv. Entrepreneurship is a process or activity that leads an entrepreneur,

A promoter is a person who does the necessary preliminary work to

According to Encarta, a promoter is “somebody who secures capital for a

3. Features or characteristics of entrepreneurship:

Entrepreneurship is a process of creating something new i.e. new idea,

It is concerned with conceiving an idea, identifying opportunities,

It is the practice of starting a new venture or reviving an existing one.

Entrepreneurship is a purposeful activity. Entrepreneurship adds to

The main objective of entrepreneurship is to maximize profit.

Entrepreneurship is a dynamic activity which helps the entrepreneur to

3. Individual or group activity:

Entrepreneurship is a purposeful activity of an individual or group of

Entrepreneurship is a process whereby an individual or group of

4. Innovation and creativity:

Innovation may be defined as exploiting new ideas leading to the

coming up with creative idea and turning that idea in to process.

Entrepreneurship process involves innovation and creativity.

Entrepreneurship is an art of finding creative solutions to the problems.

Entrepreneurship is future oriented. They need to forecast the upcoming

Entrepreneurs start businesses, develop new procedures for the

The entrepreneur is also characterised by an alertness for opportunities

6. Risk bearing (Risk and Reward):

Entrepreneurship is often associated with uncertainty. Entrepreneurship

An Entrepreneur- has to assume innumerable risk to achieve well

Entrepreneurs have close involvement with people. He has to maintain

So in order to maintain good human relations effective communication

They find it important to maintain long term relationship with suppliers,

8. Long term planning:

Planning has always been one of the major functions of an organisation

He has to be telescopic in conducting his business activities like taking

9. Facilitates economic development:

Entrepreneurial development is the key to economic development.

Entrepreneurship provides employment opportunities resulting into

4. Steps in Setting up of a business unit:

The following diagram explains the steps in setting up off a

2. Determining the objectives.

4. Detailed investigation of an idea.

5. Undertaking various research.

6. Designing a business plan.

8. Setting up the enterprise.

9. Managing the enterprise.

This is the most important function of an entrepreneur. Idea is

2. Determining the objectives:

The next step in setting up business venture is determining the

3. Identifying opportunity: Privacy - Terms

This is the first step in setting up of a business unit Entrepreneur is an

Opportunities do not come suddenly. The entrepreneur must show

The process of identifying opportunity involves identifying the needs and

4. Detailed investigation of an idea: