ENTREPRENEURSHIP COURSE HAND OUT

Unit 1: Basic Aspects of Entrepreneurship:

Entrepreneurship is considered as of assuming the risk of an entrepreneur. Entrepreneurship is

the capacity for innovation investment and expansion in new markets product and techniques.

Webster highlights entrepreneurship as economic venture organizing and risk taking capabilities.

From the functional view point entrepreneurship is defined as the combination of activities such

as perception of market opportunities gaining command over scarce resources purchasing input

producing and marketing of product responding to competition and maintaining relation with

political administration and public bureaucracy for concession licenses and taxes etc.

The entrepreneurship has been identified by many economists as a vital force in the process of

industrialisation in particular and economic development in general. Economic development

essentially means a change. But, at the same time, it is very difficult to define precisely the

phrase economic development’. One should realize that the term economic development does not

convey the idea of total development of the society. It only focuses itself on one aspect and one

dimension of general development. Economic development can be defined as a move towards

even more efficient and differentiated methods of supplying people with the requirements for

survival and improvement.

In the Earliest period, definition of entrepreneurship began as early as the Marco Polo who

comes to the Middle East for trade. Marco Polo has signed an agreement with the capitalists to

sell their products. In the contract merchant adventurer took a loan at 22.5% rate including

insurance. Capitalist was the passive risk bearer and merchant adventurer took the active role in

trading, bearing all physical and emotional risks.

Unit 2: Forms of Entrepreneurship:

Of late entrepreneurship amongst women has become a topic of concern for all of us. Since

women constitute nearly fifty percent of the total population of our country, it is necessary they

play a positive and constructive role in the socio-economic development of the country. After

Independence a good deal of attention has been given to spread of literacy, increasing

employment through industrial development and improving health and quality of life of women

in the country. Women entrepreneurs may be defined as the woman or a group of women who

initiate, organize and operate a business enterprise. Any women or group of women which

innovates, initiates or adapts an economic activity may be called women entrepreneurship.

For a long time women were confined to the limits of the home. Gradually more and more

women entered professions and services. Now, finally, the women entrepreneurs have arrived.

Business acumen is no longer a man’s prerogative. Women are rapidly emerging as smart and

dynamic entrepreneurs.

Women have entered almost all areas of business activity, cleaning powder – you name it.

Women have already entered the field. And the Indian women has ventured in areas like cement

manufacturing, steel works, etc. in which most of her counterparts from the more developed

countries are yet to enter.

According to McClelland the characteristics of entrepreneur has two features – first doing things

in a new and better way and second decision making under uncertainty. McClelland emphasizes

achievement orientation as most important factor for entrepreneurs. Individuals with high

achievement orientation are not influenced by considerations of money or any other external

incentives.
Unit 3: Business Plan and DPR

Entrepreneur has to search business opportunities. It’s an idea in the mind of an individual based

on valuable thought. Essentially, entrepreneurs need ideas to start and grow their entrepreneurial

ventures. Generating ideas is an innovative and creative process. Sometimes, the most difficult

aspect of starting a business is coming up with a business idea. Even if you have a general

business idea in mind, it usually needs to go through fine-tuning processes. Fruitful ideas often

occur at points where your skill set, your hobbies and interests, and your social networks

intersect. In other words, the best ideas for a new business are likely to come from activities and

people that you already know well.

Any good business ideas could be an invention, a new product or service, or an original idea or

solution to an everyday problem. A good business idea does not necessarily have to be a unique

products or services. Majority of the entrepreneurs credited their accomplishment to the

exceptional execution of ordinary ideas. The chances of success therefore will be far greater if

you can market a product that is similar to existing offerings, while providing greater value to

customers.

A survey of entrepreneurs found that most new start-up companies are involved in industries

where they had significant work experience. The personal contacts and domain expertise

developed on the job have proven to be valuable to many individuals who contemplated

launching a business of their own. Anybody who intends to start a business in a new industry are

therefore encouraged to firstly become an "apprentice" for a suitable period of time. By doing

that, you could avoid costly mistakes and at the same time be able to assess whether you enjoy

the work before making a serious financial commitment.

Unit 4: MSME’S Development and Funding:

In Indian economy small-scale and cottage industries occupy an important place, because of their

employment potential and their contribution to total industrial output and exports.

Government of India has taken a number of steps to promote them. However, with the recent

measures, small-scale and cottage industries facing both internal competition as well as external

competition.

There is no clear distinction between small-scale and cottage industries. However it is generally

believed that cottage industry is one which is carried on wholly or primarily with the help of the

members of the family. As against this, small-scale industry employs hired labour.

Small scale industries (SSIs) also known as MSMEs are defined & categorized by the Micro,

Small & Medium Enterprises Development Act, 2006. The act categorizes different scale of

industries on the basis of investment in plant & machinery in case of manufacturing industries

and on the basis of investment in equipment in case of service sector industries. The Government

of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act,

2006 in terms of which the definition of micro, small and medium enterprises is as under:

• Enterprises engaged in the manufacture or production, processing or preservation of

goods as specified below:

1. A micro enterprise is an enterprise where investment in plant and machinery does not
exceed Rs. 25 lakh;

2. A small enterprise is an enterprise where the investment in plant and machinery is more
than Rs. 25 lakh but does not exceed Rs. 5 crore; and

3. A medium enterprise is an enterprise where the investment in plant and machinery is

more than Rs.5 crore but does not exceed Rs.10 crore.
Unit 5: Government Policies And Initiatives

The 'District Industries Centre' (DICs) programme was started by the central government in 1978

with the objective of providing a focal point for promoting small, tiny, cottage and village

industries in a particular area and to make available to them all necessary services and facilities

at one place. The finances for setting up DICs in a state are contributed equally by the particular

state government and the central government. To facilitate the process of small enterprise

development, DICs have been entrusted with most of the administrative and financial powers.

For purpose of allotment of land, work sheds raw materials etc., DICs functions under the

'Directorate of Industries'. Each DIC is headed by a General Manager who is assisted by four

functional managers and three project managers to look after the following activities:

The small industries service institutes (SISI’s) are set-up one in each state to provide consultancy

and training to small and prospective entrepreneurs. The activities of SISs are co-ordinate by the

industrial management training division of the DC, SSI office (New Delhi). In all there are 28

SISI’s and 30 Branch SISI’s set up in state capitals and other places all over the country. SISI

has wide spectrum of technological, management and administrative tasks to perform.

NIESBUD is an apex organisation working under the administrative control of the Ministry of

Skill Development and Entrepreneurship, Government of India. The policy, direction and

guidance to the Institute is provided by its Governing Council whose Chairman is the Minister of

MSME.The Executive Committee consisting of Secretary (Micro, Small & Medium Enterprises)

as its Chairman and Director General of the Institute as its Member-Secretary, executes the

policies and decisions of the Governing Council through its whole-time Director General.