Entrepreneurship is the process of creating something new with value by devoting the

necessary time and effort, assuming the accompanying financial, psychic, and social risks,

and receiving the resulting rewards of monetary and personal satisfaction and

independence.

The Evolution of the Entrepreneur

Entrepreneurs have shaped the face of business and enterprise since the dawn of man. From the
first wheel to the advent of the internet, these clever businesspeople evolved for centuries into their
most recent incarnation, the social media entrepreneur.
Harvard School theory
Given by Cole (1949)

Envisages entrepreneurship as purposeful activity that initiate, maintain and develop a profit-
oriented business.

Focus on two activities --co-ordination activity --sensitivity to the environment.

Theory of Adjustment of Price

Given by Kirzner. According to him entrepreneur has following characteristics.

 Adjustment of price is the main role of entrepreneur.

 Alertness to disequilibrium.
 Entrepreneurs are unpredictable.

Startup India – A Government Initiative

Startup India Scheme is an initiative by the Government of India for generation of employment and
wealth creation. The goal of Startup India is the development and innovation of products and
services and increasing the employment rate in India. Benefits of Startup India Scheme is
Simplification of Work, Finance support, Government tenders, Networking opportunities. Startup
India was launched by Prime Minister Shri. Narendra Modi on 16th January 2016. Let us learn more
about Benefits and Eligibility of Startup India.

Action Plan of Startup India Scheme

The action plan of Startup India is based on the following factors:

1. Simplification of Work-

This initiative simplifies the work for the new entrants in order to motivate them. This includes
following steps taken by the government:

 Firstly, the government has set-up Startup India hubs where all the works related to
incorporation, registration, grievance handling, etc.

 Secondly, an application and an online portal is set-up by the government to facilitate

registration from anywhere and anytime.

 Thirdly, the patent acquisition and registration is now fast for the startups.

 Lastly, according to the Insolvency and Bankruptcy Bill, 2015 facilitates fast winding up
of the startups. A new startup can wind-up itself within 90 days of the incorporation.
2. Finance Support

In order to motivate the startups, the government provides various financial supports. These steps
taken by the government are as follows:

The government has set up a corpus of Rs.10,000 crores for 4 years (Rs.2500 crore each year). From
such fund, the government invests in various startups.

Special funds are provided, investment in which leads to exemption from the income tax on the Capital
Gain.
Income tax exemption is available for the startups for the first 3 years after the incorporation.

Benefits of Startup India

 Financial Benefits

 Income Tax Benefits

 Registration Benefits

 Government Tenders

 Huge Networking Opportunities

Eligibility for Registration under Startup India Scheme

1. Firstly, the company to be formed must be a private limited company or a limited liability
partnership firm.

2. Secondly, the firms should have obtained approval from the Department of Industrial Policy and
Promotion.

3. Thirdly, it must have a recommendation letter by an incubation.

4. The firm must provide innovative schemes or products.

5. It should be a new firm or not older than five years.

6. The total turnover of the company should be not exceeding 25 crores.

7. Lastly, it should not be a result of splitting up, or reconstruction, of a business already in existence.

Challenges faced by Startup India

1. People generally believe startups are just about thinking about a new idea or plan. But in reality,
execution of such plan is more necessary than just thinking about it.
2. The view or perspective of the government on startup India plan is quite short-term in nature. It
does not look at the long-term path of the startups.
3. For the success of any new business, competent workforce is necessary. But in case of startups,
skilled workforce is not possible due to the lack of funds at the initial phase.
4. The risk of reaching failure is greater in the start-ups as compared to other organizations. It is
because they tend to take steps quite fast.

Ease of doing business in India

India has moved 14 places to be 63rd among 190 nations in the World Bank’s ease of doing business
ranking released on Thursday on the back of multiple economic reforms by the Narendra Modi
government. However, it failed to achieve government's target of being at 50th place.

Completing the procedures required to build a warehouse now costs only 4% of the warehouse
value. Building quality control measures were also improved, and now only six economies in the
world score better than India’s 14.5 out of 15 on this index.

Importing and exporting became easier for companies for the fourth consecutive year. With the
latest reforms, India now ranks 68th globally on this indicator and performs significantly better than
the regional average. The time necessary for the logistical processes of exporting and importing
goods has been significantly reduced.

Doing business ranking is based on quantitative indicators on regulation for starting a business,
dealing with construction permits, getting electricity, registering property, getting credit, protecting
minority investors, paying taxes, trading across borders, enforcing contracts and resolving
insolvency.

MSME (Micro Small Medium Enterprises)

The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the
apex executive body for the formulation and administration of rules, regulations and laws relating to
micro, small and medium enterprises in India.

Problems faced by MSMEs

1. Problem of Raw Material: A major problem that the micro and small enterprises have to
contend with is the procurement of raw material. The problem of raw material has assumed
the shape of:

 An absolute scarcity,

 A poor quality of raw materials, and

 A high cost.

The small units that use imported raw material face raw material problem with more severity mainly
due to difficulty in obtaining this raw material either on account of the foreign exchange crisis or
some of other reasons. Even the micro and small enterprises that depend on local resources for raw
material requirements face the problem of other type. An example of this type is handloom industry
that depends for its requirement of cotton on local traders.
Nonetheless, micro and small enterprises with no special staff to liaise with the official agencies,
these units are left with inadequate supplies of raw material. As a result, they have to resort to open
market purchases at very high prices. This, in turn, increases their cost of production, and, thus, puts
them in an adverse position vis-a-vis their larger rivals.

 Problem of Finance: An important problem faced by micro and small enterprises in the
country is that of finance. The problem of finance in micro and small sector is mainly due to
two reasons.

 Firstly, it is partly due to scarcity of capital in the country as a whole.

 Secondly, it is partly due to weak credit worthiness of micro and small enterprises in
the country. Due to their weak economic base, they find it difficult to take financial
assistance from the commercial banks and financial institutions.

As such, they are bound to obtain credit from the money lenders on a very high rate of interest and
are, thus, exploitative in character.

 Problem of Marketing: One of the main problems faced by the micro and small enterprises
is in the field of marketing. These units often do not possess any marketing organisation. In
consequence, their products compare unfavourably with the quality of the products of the
large-scale industries. Therefore, they suffer from competitive disadvantages vis-a-vis large-
scale units.

 Problem of Under-Utilization of Capacity: Studies shows the gross under-utilization of

installed capacities in micro and small enterprises. On the basis of All India Census of Small-
Scale Industries, 50 to 40 per cent of capacity were not utilized in micro and small
enterprises.

 Power deficit- The problems of under-utilization of capacity is further enhanced by power

problem faced by micro and small enterprises. In short, there are two aspects to the
problem: One, power supply is not always available to the small units on the mere asking,
and whenever it is available, it rationed out, limited to a few hours in a day. Also, unlike
large-scale industries, the micro and small enterprises cannot afford to go in for alternatives;
like installing own thermal units, because these involve heavy costs. Since micro and small
units are weak in economic front, they have to manage as best as it can within their
available meager means.

 Lack of Coordination: There has been lack of effective co-ordination among the various
support organisations set up over the period for the promotion and development of these
industries. Quality consciousness has not been generated to the desired level despite
various measures taken in this regard.
PESTEL analysis of Indian business environment
The PESTEL analysis of a business macro-environment entails the consideration of diverse factors
which include Political, Economic, Social, Technological, Environmental and Legal factors. The
decisions made by business managers are immensely affected by the above factors either directly or
indirectly. The relevance of PESTEL analysis is business cannot be overemphasized. In fact, the very
design of PESTEL analysis was solely for the purpose of scanning the business environment. 

Moreover, the very continued existence of the business is dependent on the factors addressed
through PESTEL analysis. Before the business undertakes product development, change of strategy
or change of the entire business model, it is very crucial to put into serious consideration the factors
addressed in PESTEL analysis.

 The political environment of India is highly determined by diverse factors such as political
stability and government’s policies, the ideologies of various political parties, politicians’
interests, as well as the influence political forums possess. Therefore, multivariate political
factors affect the Indian business environment (Chakranarayan 2009). They include taxation
which is well developed due to its three-tier structure of governments: Union, state and
Urban & Rural bodies.
 Social factors such as changes in trends have profound impacts on a business environment.
For instance, India’s ageing population has seen a rise in pension costs to firms as well as
increased recruitment of older workers. Being the world’s second highly populated nation,
India’s population is estimated at 1.1 billion. 
 Technological factors influence new product development as well as invention of fresh
processes. Technological has great impacts on cost reduction, quality, as well as innovation.
India is now served with the 3G technology steered by the installation of optic fibre cable.
This has facilitated innumerable projects in technology. Moreover, India boasts of a strong IT
sector as well as being a very strong market for mobile and communication provision. There
 is a continuous IT development, funding of technology by the government, software
upgrade, as well as technological transfer.

RAMP MODEL
R, which stands for Return. Return really is return on investment.

R Is it profitable? Will your revenues be higher than your expenses?

R Time to breakeven (how long before cash flow positive? How long until the company

begins to have an aggregate net income)

R Investment Needed. How much money will it take to start-up this venture. Will it be

$20,000, $200,000, or $2,000,000?

A stands for advantages.

A Look at cost structure (suppliers, what each element will cost to source or

manufacture)

A Barriers to entry (large competitors, regulations, patents, large capital requirements.

If there are many barriers to entry, it will be difficult to enter a market. The higher the

barriers to entry, the more disadvantaged you will be.

A Intellectual Property. Do you have a proprietary advantage such as a patents or

exclusive licenses on what you will be selling.

A Distribution Channel. How will you be selling your product? Will you sell it direct to

the consumer via the Internet, sell it to wholesales, sell it to businesses, or sell it to

retail stores. If can develop a unique distribution channel this can surely be an

advantage.

M stands for Market.

M The Need. Is there a big need for this product or service. Try to avoid ideas that

sound cool but there is no real need for. Make sure your product or service fills and

need or solves a problem.

M Target market (who are you selling to? businesses? consumers? what

demographics?)

M Analyze target market (who are you selling to? businesses? consumers? what
demographics?)

M Pricing (what you they charge, what will be the price, will there be a high enough

markup).

M Analyze market size

P stands for potential.

P Risk vs. Reward. How risky is the opportunity? If it is very risky, it there a chance for

the business to do very well. Will there be a high reward for the founders and

investors if the company succeeds?

P The Team. Is the team right for the business. Do you have knowledge in this area.

P Timing. Is the market ready for your product. You may have a great idea

for flying cars, but if consumers are not ready for your product you may not be able to

turn your idea into a successful business.

P Goal Fit. Does the business concept fit the goals of the team to create a high

potential or lifestyle business?

By using the RAMP model, you should be able to do a thorough job analyzing your

business ideas and opportunities presented to you.

THE CREATIVE PROCESS

Idea Germination: The seeding stage of a new idea- Recognition

Preparation: Conscious search for knowledge- Rationalization

Incubation: Subconscious assimilation of information- Fantasizing

Illumination: Recognition of idea as being feasible- Realization

Verification: Application or test to prove idea has value- Validation

1. Preparation stage: As you begin the creative journey, the first stage involves prep work and
idea generation. This is when you gather materials and conduct research that could spark an
interesting idea. Brainstorm and let your mind wander, or write in a journal to foster
divergent thinking; this will help you consider all possible approaches to building out your
idea. In this first part of the process, your brain is using its memory bank to draw on
knowledge and past experiences to generate original ideas.

2. Incubation stage: When you have finished actively thinking about your idea, the second
stage is where you let it go. Part of creative thinking is taking a step away from your idea
before you sit down to flesh it out. You might work on another project or take a break from
the creative process altogether—regardless, you are not consciously trying to work on your
 idea. Walking away from your idea might seem counterproductive, but it’s an important
stage of the process. During this time, your story or song or problem is incubating in the
back of your mind.

3. Illumination stage: Sometimes called the insight stage, illumination is when the “aha”
moment happens. The light bulb clicks on as spontaneous new connections are formed and
all of that material you’ve gathered comes together to present the solution to your problem.
In this third stage, the answer to your creative quest strikes you. For example, you overcome
writer’s block by figuring out the ending to your story. It can take you by surprise but after
the incubation stage, an idea has emerged.

4. Evaluation stage: During this stage, you consider the validity of your idea and weigh it
against alternatives. This is also a time of reflection when you look back at your initial
concept or problem to see if your solution aligns with your initial vision. Business
professionals might do market research to test the viability of the idea . During this phase,
you might go back to the drawing board or you might forge on, confident in what you’ve
come up with.

5. Verification stage: This is the final stage of the creative process. It’s when the hard work
happens. Your creative product might be a physical object, an advertising campaign, a song,
a novel, an architectural design—any item or object that you set out to create, propelled by
that initial idea that popped into your head. Now, you finalize your design, bring your idea to
life, and share it with the world.

Porter’s Five Forces Model

Porter's Five Forces is a framework for analyzing a company's competitive environment.

The number and power of a company's competitive rivals, potential new market entrants, suppliers,
customers, and substitute products influence a company's profitability.

Five Forces analysis can be used to guide business strategy to increase competitive advantage.

Porter’s Five Forces Model are-

Competition in the Industry

The first of the five forces refers to the number of competitors and their ability to undercut a
company. The larger the number of competitors, along with the number of equivalent products and
services they offer, the lesser the power of a company. Suppliers and buyers seek out a
company's competition if they are able to offer a better deal or lower prices.

Potential of New Entrants Into an Industry

A company's power is also affected by the force of new entrants into its market. The less time and
money it cost for a competitor to enter a company's market and be an effective competitor, the
more an established company's position could be significantly weakened.

Power of Suppliers

The next factor in the five forces model addresses how easily suppliers can drive up the cost of
inputs. It is affected by the number of suppliers of key inputs of a good or service, how unique these
inputs are, and how much it would cost a company to switch to another supplier. The fewer
suppliers to an industry, the more a company would depend on a supplier.

Power of Customers

The ability that customers have to drive prices lower or their level of power is one of the five forces.
It is affected by how many buyers or customers a company has, how significant each customer is,
and how much it would cost a company to find new customers or markets for its output. A smaller
and more powerful client base means that each customer has more power to negotiate for lower
prices and better deals.

Threat of Substitutes

Substitute goods or services that can be used in place of a company's products or services pose a
threat. Companies that produce goods or services for which there are no close substitutes will have
more power to increase prices and lock in favorable terms. When close substitutes are available,
customers will have the option to forgo buying a company's product, and a company's power can be
weakened.

Some of the problems faced by women entrepreneurs are as follows: 

1. Problem of Finance:

Finance is regarded as “life-blood” for any enterprise, be it big or small. However, women
entrepreneurs suffer from shortage of finance on two counts.

Firstly, women do not generally have property on their names to use them as collateral for obtaining
funds from external sources. Thus, their access to the external sources of funds is limited.

Secondly, the banks also consider women less credit-worthy and discourage women borrowers on
the belief that they can at any time leave their business. Given such situation, women entrepreneurs
are bound to rely on their own savings, if any and loans from friends and relatives who are
expectedly meager and negligible. Thus, women enterprises fail due to the shortage of finance.

2. Scarcity of Raw Material:

Most of the women enterprises are plagued by the scarcity of raw material and necessary inputs.
Added to this are the high prices of raw material, on the one hand, and getting raw material at the
minimum of discount, on the other. The failure of many women co-operatives in 1971 engaged in
basket-making is an example how the scarcity of raw material sounds the death-knell of enterprises
run by women (Gupta and Srinivasan 2009).

3. Stiff Competition:

Women entrepreneurs do not have organizational set-up to pump in a lot of money for canvassing
and advertisement. Thus, they have to face a stiff competition for marketing their products with
both organized sector and their male counterparts. Such a competition ultimately results in the
liquidation of women enterprises.

4. Limited Mobility:

Unlike men, women mobility in India is highly limited due to various reasons. A single woman asking
for room is still looked upon suspicion. Cumbersome exercise involved in starting an enterprise
coupled with the officials humiliating attitude towards women compels them to give up idea of
starting an enterprise.

5. Family Ties:

In India, it is mainly a women’s duty to look after the children and other members of the family. Man
plays a secondary role only. In case of married women, she has to strike a fine balance between her
business and family. Her total involvement in family leaves little or no energy and time to devote for
business.

Support and approval of husbands seem necessary condition for women’s entry into business.
Accordingly, the educational level and family background of husbands positively influence women’s
entry into business activities.

6. Lack of Education:

In India, around three-fifths (60%) of women are still illiterate. Illiteracy is the root cause of socio-
economic problems. Due to the lack of education and that too qualitative education, women are not
aware of business, technology and market knowledge. Also, lack of education causes low
achievement motivation among women. Thus, lack of education creates one type or other problems
for women in the setting up and running of business enterprises.

7. Male-Dominated Society:

Male chauvinism is still the order of the day in India. The Constitution of India speaks of equality
between sexes. But, in practice, women are looked upon as abla, i.e. weak in all respects. Women
suffer from male reservations about a women’s role, ability and capacity and are treated
accordingly. In nutshell, in the male-dominated Indian society, women are not treated equal to men.
This, in turn, serves as a barrier to women entry into business.

Identify more business opportunities.

1. Listen to your potential clients and past leads

When you’re targeting potential customers listen to their needs, wants, challenges and frustrations
with your industry. Have they used similar products and services before? What did they like and
dislike? Why did they come to you? What are their objections to your products or services?

This will help you to find opportunities to develop more tailored products and services, hone your
target market and identify and overcome common objections.

2. Listen to your customers

When you’re talking to your customers listen to what they saying about your industry, products and
services. What are their frequently asked questions? Experiences? Frustrations? Feedback and
complaints?

This valuable customer information will help you identify key business opportunities to expand and
develop your current products and services.

3. Look at your competitors

Do a little competitive analysis (don’t let it lead to competitive paralysis though) to see what other
startups are doing, and more importantly, not doing? Where are they falling down? What are they
doing right? What makes customers go to them over you?

Analysing your competitors will help you identify key business opportunities to expand your market
reach and develop your products and services.

4. Look at industry trends and insights

Subscribe to industry publications, join relevant associations, set Google alerts for key industry terms
and news and follow other industry experts on social media.

Absorb yourself in your industry and continually educate yourself on the latest techniques and
trends.