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ENTREPRENEURIAL DEVELOPMENT
V SEMESTER B.COM
ENTREPRENUERIAL DEVELOPMENT
Question Bank previous year papers solved

2019,2018,2017,2016
Prepared by
Prof. TAMIL SELVAN .V
ASST PROFESSOR
SMT NALINI RAGHUNATHA RAO DEGREE COLLEGE,JIGANI
SNR DEGREE COLLEGE,JIGANI

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V SEM B.COM EXAMINATION NOV/DEC 2019
ENTREPRENEURIAL DEVELOPMENT TIME:3 HRS MARKS :70
I.SECTION A ANSWER ANY 5 SUB QUESTIONS 5 X 2 = 10
a. Define entrepreneurship?
The capacity and willi9ngness to develop, organize and manage a business venture along with any of its risks
in order to make a profit is called entrepreneurship.
b. What is cottage industry?
A cottage industry is a traditional industry, catering mainly to the local population and dependent upon local
raw materials. They are located usually at the homes of the producers, hence the name cottage industry.
c. State the importance of market feasibility?
Market feasibility studies analyze the economic, demographic and competitive factors that impact the
development project. The market feasibility study represents the most complete research on demographic
trends and the marketing environment that determine the success of the development.
d. Define Business plan?
The business plan is written document prepared by the entrepreneur that describes all the relevant external
and internal elements involved in starting a new venture.
A business plan is a blue print of step by step process that would be followed to convert business idea into
successful business venture.
e. Give the meaning of venture capital?
Venture capital is the money put into an Enterprise while may be lost if the enterprise fails to earn profits.
Businessman starting of a business will invest venture capital, of his own but that will probably need extra
funding from a search than his own product.
f. Who is spontaneous entrepreneur?
Spontaneous entrepreneurs are the entrepreneurs start their business because of their natural talents. They
are the persons with initiative, boldness and confidence in their ability which motivate them to undertake
entrepreneurial activity.
g. State any two objectives of AWAKE.
1. It organizes conventions and seminars.
2.Aims to empower the women through entrepreneurial development to improve economic condition.

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II. Section – B Answer any three questions. Each questions carries 6 marks 3 X 6 =18
2.State the qualities of an Entrepreneur?
Qualities of successful Entrepreneur

An Entrepreneur should possess all such qualities with the help of which he can perform successfully
1.Calculated Risk taker:
An entrepreneur is calculated risk taker. He enjoys the excitement of a challenge but he does not gamble. An
entrepreneur avoids low risk situation because there is a lack of challenge and he avoids high risk situation
because he wants to succeed.
2.Innovator:
An entrepreneur exploits the invention commercially and produce newly and better goods which gives him
profit and satisfaction .
3.Organizer:
An entrepreneur has to bring together various factors of production, minimize losses and reduce the cost of
production. He produced the best result as organizer.
4.Creative:
Successful innovation is depend on creativity and one of the most important requirement of an entrepreneur
is to be creative as creativity may be taken as the cause and successful innovation as the effect.
5.Achievement Motivated:
An entrepreneur is a achievement oriented person not money hungry. He works for his desire for challenge,
accomplishment and service to others.
6.Technically competent:
An entrepreneur must have reasonable level of technical knowledge it is the ability that people can acquire
with hard work.
7.Self confident:
It is necessary for an entrepreneur to be self confident . he should have faith in himself, only then he can trust
others.
8.Optimistic:
An entrepreneur should approach his task with hope of success and optimistic attitude. He attempts any task
with the hope that he will succeed rather than with a fear of failure.
9.Socially responsible:
The changing Environment calls for a socially responsible entrepreneur who is not threatened by progress of
others. The entrepreneur should have responsibility to create jobs for others.
10 . Mental Ability:
An entrepreneur must be intelligent ,adaptable, creative and he must be able to engage in analysis of various
problems and situations in order to deal with them.

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11.Communication ability:
An entrepreneur must possess the good communication ability with others.
12.Decsion making :
An entrepreneur must be clear and creative when it is about decision making. Decisions which affect
organizations feature should be taken with the conscious mind.
13. A venture capitalist:
To start a new venture would be existing opportunity for economically strong person or he should in a
position to arrange capital for his new business.
14. Leadership:
This is an essential quality of an entrepreneur . Entrepreneurs as the leaders should provide the necessary
spark to motivation by guiding, inspiring, assisting and directing the members of the group for achievement of
unity of action, efforts and purpose.
15. Dynamism:
Entrepreneur faces the adversities boldly and bravely. They become tougher during adverse situation . they
have faith in themselves and attempt to solve problems given under pressure.
3.List the objectives of an entrepreneur?
1. To promote the first generation Business man and Industrialists

2.To create awareness about availability of Resources
3.To promote the small scale ,cottage and Local Industries
4.To encourage self employment tendencies
5.To provide knowledge about Government plans and programmes
6.To make a successful entrepreneur
7. To provide training to operate Business
8.To create awareness about marketing
9.To develop entrepreneurs in all areas of the country
10.To remove doubts of Entrepreneurs, give solutions and suggests remedies of problems
4.Briefly explain the registration procedure of SSIs?
1.Selecting the name of the company

The entrepreneur must select the name of the industry in which he wants to start his business.
The name must be selected which can give the overall view about the type of the industry.

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2.Filling up of form:
The prescribed form is to be filled –up for the registration of firm in whatever the name .The entrepreneur
must register his firm at the office of the registrar of firms. It should full fill all the necessary details about the
firm.
3.Deciding the form of ownership:
The entrepreneur has to decide whether he would like to start 1. Sole proprietorship firm 2.Partnership firm
3.Private ltd company 4.Public ltd company. Etc .
4.Submission of the form:
The prescribed form for the registration of small scale industry can be submitted in the office of the director of
industries in various states.
5.Inspection and approval:
Inspection by the inspector of the office of director of Industries is required thereafter. After submitting the
prescribed application form to the director of Industries. The inspector from the office of the Directors of
Industries to check the correctness and the viability of the project.
5.Discuss the steps involved in formulation of Business plan?
1.Indtroductory Page
2.Executive summary
3.Description of venture
4.Market Analysis
5.Feasibility Analysis
6.Production plan
7.Marketing plan
8.Technical plan
9.Operation and Management plan
10.Human resources plan
11.Critical risk and contingency plan
12.Appendix

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6.What are the advantages of Industrial Estate?

1.Economies of scale units located in an industrial estate can adapt centralized buying and selling.
2.Economies of Agglomeration
3.benefits of interrelatedness
4.Low investments
5.Availability of infrastructure
6.Availability of support facilities
7.Mutual co operation
8.Focus on Business
9.Balanced regional development
10.External economies
11.Savings of time and effort
12.Fewer risks.
III. Section –c Answer any 3 questions. Each questions carries 14 marks. 3 X 14 =42
7. Describe the role of SSIs in Indian Economic Development
Role played by SSI in the development of Indian Economy

1. Employment Generation
SME sector in India creates large employment opportunities for Indian. Next only to agriculture has been
estimated that a lakh rupees of investment in fixed asset in ssi generate employment for 4 persons.
2. Production:
The SME sectors plays a vital role for the growth of the country. It contributes 40% of the gross
Manufacturing to the Indian economy.
3. Export Contribution:
SME sectors plays major role in India ‘s present export performance .45%- 50% of the Indian exports is
being contributed by SME sectors. The no of SSI that undertake direct exports would be more than 5000.
4. Innovation and Development:
SME are quick in assimilating new design trends ,developing contemporary products and bringing them to
the market place ahead of competition .
5. Utilizing Resources Optimally:
SME are notably skillful in the maximizing the use of the scarce capital resources and are able to partner
with large scale firms by supplying locally available raw materials in unprocessed or semi processed forms.
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6. Developing Entrepreneurial capacity:

SME can act as the seed bed for the development of entrepreneurial skills and innovation. They provide
part in the provision of services in the community. they can make important contribution to the regional
development.
7. Increases GDP:
The SME sectors contributes about 9 percent of the country’s GDP, 45% of manufactured output and 40 %
of its exports. The SME provides employment to over million persons through more than 31 million
enterprises with lower labour to capital ratio and produces 6000 products.
8. Feeder to Large Scale Industries:
SME is complementary to the Large Scale Industries manufactured various types of component s, spare
parts, tools and accessories which required by the large scale sector.
9. Opportunities for Artisan:
In villages artisan/ specialist are having expertise in different fields are found. Because of lack of
opportunities their skills do not come to the light. SME industries are provide such a industry.
10.Increase Standard of Living:
With the establishment of small business in Rural areas or nearby regions villages get many type of facilities.
For example Employment, Electricity, water, Roads , Banks and mode of transport etc. in such a situation
promotion of standard of Living is inevitable.
11.Less pressure of population on Agriculture:
As more population depends upon land for survival the land is further divided into small pieces. It no longer
remains beneficial to do farming on such small fields .In every year there is a further increase of approximately
thirty lakhs people who depend on agriculture.
12.Equitable Distribution of Income :
With the establishment of the business the income of the country is not just concentrated with some handful
of city industrialists. This helps to reduce the gap between the rich and the poor in the country.
13.Social advantage
SME s offer opportunities for an independent way of life of people with a small means. They offer savings in
social overheads like Education, housing and medical facilities by taking industry near to the people. They help
to rise per capita income and standard of living in the country.

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8.Explain the functions of an Entrepreneur?
FUNCTIONS OF ENTREPREUNERS
1. INNOVATION:-
The entrepreneur basically an innovator who introduces new combinations of production that is innovation.
Entrepreneurship is a creative activity and the entrepreneur introduces something new in any branch of
economic activity.
Introduction of new product, new technology ,new market for product, discovery of new sources of supply.
RISK BEARING:-
Risk taking is an uncertainty bearing implies assuming the responsibility for loss that may occur in the
unforeseen contingencies of the future. Business is a game of skill where risk and rewards both are great.
Ability of highest order is required for success in entrepreneurship. An entrepreneur is an especially talented
and motivated person who under takes the risk of Business.
2. Organizations and Management:
Recognize organization and management of the enterprise is the main function of the entrepreneur. Planning
of an enterprise, co-ordination , administration and control of employees routine type of supervision of
employees.
3. Other functions:
a) Understanding one’s own capacity
Examine dominant aspects of the business, Identify and compare own personal qualities and skills.
Know one ‘s Strength, Weakness and the overall capability.
b) Identifying new venture opportunity:
Study market needs and wants, Recognition innovation possibilities. Think about a new idea,
process, device product or services .Carrying out Market research, Be well aware of competitions
c) Planning new venture:
Planning the Human resource requirement . Planning the financial requirement, assts requirement,
Shareholders fund, investment and capital requirement.
d) Organizing new venture:
Choose the form of ownership, determine organizational structure
Ensure fearless from different authorities, obtain certificate of registration etc.
e)Managing Finance:
Arrange own and borrowed capital, prepare and review from time to time sectional and master budget
with fund flow estimate. Analyze financial requirement and statements. Maintain proper books of
accounts.
a) Managing Production operation:
Acquiring detail of basic technical knowledge and production operation .Formulating purchasing policy
and inventory control system. Formulate frame work for total quality control.

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b) Managing Work Force:

Arrange systematic manpower planning , prepare job descriptions for all positions at all level. Recruit
the right person for the right job, Evaluate each employees performance periodically.
c) Managing Market:
Collect and analyze regularly data on customer desires with special reference to product quality, price
and service sales after service. Select and review marketing channel and ensure smooth flow of goods
to market place. Motivate sales and servicing personnel.
9.Explain the importance of Business Plan?

1. To give direction to the vision formulated by the entrepreneur
2. To objectively evaluate the prospectus of business
3. To monitor the progress after implementing business plan
4. To persuade others to join business
5. To seek loans from financial institutions
6. To visualize concept in terms of market availability, organizational, operational, and financial
feasibility
7. To guide entrepreneur in actual implementation of plan
8. To identify actual strength and weakness of plan
9. To identify challenges in terms of opportunities and threats from the external markets.
10.To clarify ideas and identify gaps in management information about their business, competitors and
market.
11.To identify the resources that would be required to implement the plan
12.To document ownership arrangements, future prospectus and projected growth of the business
venture.
10.Explain the role of Commercial Banks in development of SSIs?
Commercial banks provide short term and medium term loans in the industry.
1. Mobilizing savings for Capital Formation
2. Financing Industry
3. Financing Trade
4. Financing Agriculture
5. Financing Employment generating activities
6. General purpose term loans
7. Liberalized credit for SSI
8. Entrepreneur scheme
9. Equity fund scheme

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10. Shree shakthi package

11. Composite loan schemes
12. Margin money scheme
13. .Mahila udayam nidhi scheme
14. Export finance scheme
11.Discuss the various problems encountered by Women entrepreneurs in India?
Problems faced by women entrepreneurs: 11. Lack of self confidence

1. Patriarchal society 12. Lack of training
2. Absence of entrepreneurial attitude 13. Low risk bearing ability
3. Marketing problems 14. Lack of education
4. Financial Problems 15. Lack of Business experiences
5. Family conflicts 16. Negative attitude of banks and financial
6. Credit facilities institutions
7. Shortage of raw materials 17. Inadequate infrastructural facilities
8. Heavy competition 18. Male domination
9. High cost of production 19. Lack of encouragement from family
10. Social barriers 20. Lack of access to advanced technology

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I. SECTION A ANSWER ANY 5 SUB QUESTIONS 5 X 2 = 10

a. Give the meaning of Entrepreneur
A person who organizes and manages any enterprise, especially a business usually with considerable
initiative and risk is called entrepreneur.
b. What is tiny industry?
A tiny industrial unit is one with an investment limit of RS 2.5 million in plant and machinery
irrespective of location of the unit.
c. What is feasibility report?

A feasibility report is a project report of a new enterprise or of an expansion which provides in general,
primary Economic, Information, Financial data and Technical details.
d. What do you mean by Industrial Estate?

The United Nation has defined an Industrial Estate as “ a planned clustering of enterprises, offering
standard factory buildings erected in advance of demand and variety of services and facilities to the
occupants”
e. Who is spontaneous entrepreneur?

Spontaneous entrepreneurs are the entrepreneurs start their business because of their natural talents.
They are the persons with initiative, boldness and confidence in their ability which motivate them to
undertake entrepreneurial activity.
f. Expand TECSOK?
TECSOK: Technical Consultancy Services Organization of Karnataka
g. What is Innovation?
The process of translating an idea or invention into a goods or service that creates value or for which
customers will pay is called innovation

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II. SECTION B ANSWER ANY 3 OF THE FOLLOWING 3 X 6 =18
2.List out the advantages of small scale Industry?
Advantages of small scale industries:

1. Small scale industries are generally labour incentives and don’t require large amount of capital. The
energy of employment and under employed people may be used for productive purpose in economy
2. Small scale industries projects can be undertaken in a short period and hence can increase production
both in short run and long run.
3. Most developing countries are rich in certain agricultural, forest and mineral resources. Small scale
enterprises can be based on the processing of locally produced raw materials.
4. It is possible both to Save and Foreign Exchange goods from local resources.
5. S.S.I are the trying ground for local entrepreneur and decision making
6. By creating opportunities for the small business industrial enterprises can think about more equitable
distribution of income which is socially necessary and desirable
7. Small scale enterprises in developing countries help to create jobs in economic stability in society by
controlling the monopoly system
8. The development of small scale will create jobs in rural areas of the developing countries where the
unemployment is high
9. Small scale enterprises will make possible transfer of manufacturing activities from metropolitan to
small areas. This will also help in bringing about geographical requirement of skill and technology in a
country
10. Apart from the linkages between agriculture of rural development between small industrial
enterprises. There is an essential relationship between small scale industries and the farmers which
facilitates the growth
11. Small scale enterprises have their own place in a country’s economy Imperfect competition protects
the small firms, markets and enables them to exist even where they are not efficient in terms of cost
12. Small scale industries create immediate and permanent employment at a relatively small capital cost
3.What are the aspects to examined while deciding technical feasibility?
.Technical feasibility:
1. Material inputs, raw materials

2. Production/product mix
3. Location and site
4. Structures and civil works
5. Technical know-How
6. Project charts and layouts
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7. Manufacturing process and technology

8. Plant capacity
9. Selection and procurement of machinery and equipment
10. Scale of operations
11.Collaboration agreements
12. Work scheduling
4.Explain the objectives of seminars and conventions organized by AWAKE?
Association of Women entrepreneurs of Karnataka(AWAKE):

Association of Women entrepreneurs of Karnataka(AWAKE) is a non profit . non Governmental
organization, established in 1983. It aims to promote entrepreneurship among women and thereby
empower them to join the economic mainstream.
Services of AWAKE:
1. It conducts Entrepreneurship Development Program(EDP) for women and youth intending to start a
business in urban and rural areas.
2.AWAKE conducts need based skill development programmes for women in various sectors like food
processing, handicrafts, tailoring, embroidery, garments, artificial jewellary, candle making , herbal
products, housekeeping ,beautician training etc
3.AWKE will conducts the progamme for both in rural and urban areas considering the business
opportunities and market trend of the environment.
4. AWAKE to encourage the women interested in food processing established a business incubator for
food processing at Bangalore.
5. AWAKE owes the success of its EDPs because to its holistic approach in including all developmental
agencies. Both the Govt and NGO.
6. AWAKE provides special assistance to women entrepreneurs.
7. Business counseling is conducted for potential entrepreneur aspiring to start her own business
enterprises.
8.Under this programme AWAKE informs and creates awareness amongst women entrepreneurs.
9. AWAKE in association with various government and non governmental agencies provides a platform for
its members and trainees for marketing their products and build their business network.
10.It conducts various programs and workshops on various topics such as Finance, Tax planning, Computer
skills, Information technology, packing in marketing, Export/import, communication skills and HRM.

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5.What are the objectives of Industrial Estate?

Industrial estate is a place where the required facilities and factory accommodation are provided by the
government to the entrepreneurs to establish their industries there.
industrial region, industrial park, industrial area, industrial zone, etc.
ROLE/Objectives of Industrial Estates:
1. Provide infrastructure and accommodation facilities to the entrepreneurs
2. Encourage the development of small-scale industries in the country
3. Decentralize industries to the rural and backward areas
4. Encourage ancillary industries in surroundings of major industrial units and
5. Develop entrepreneurship by creating a congenial climate to run the industries in these estates/area
/township, etc.
6.What is the role of SSI in stimulating the economic activities?
Role played by SSI in the development of Indian Economy

1.Employment Generation
SME sector in India creates large employment opportunities for Indian. Next only to agriculture has been
estimated that a lakh rupees of investment in fixed asset in ssi generate employment for 4 persons.
2.Production:
The SME sectors plays a vital role for the growth of the country. It contributes 40% of the gross Manufacturing
to the Indian economy.
3.Export Contribution:
SME sectors plays major role in India ‘s present export performance .45%- 50% of the Indian exports is being
contributed by SME sectors. The no of SSI that undertake direct exports would be more than 5000.
4.Innovation and Development:
SME are quick in assimilating new design trends ,developing contemporary products and bringing them to the
market place ahead of competition .
5.Utilizing Resources Optimally:

SME are notably skillful in the maximizing the use of the scarce capital resources and are able to partner with
large scale firms by supplying locally available raw materials in unprocessed or semi processed forms.

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6.Developing Entrepreneurial capacity:

SME can act as the seed bed for the development of entrepreneurial skills and innovation. They provide part in
the provision of services in the community. they can make important contribution to the regional
development.
7.Increases GDP:
The SME sectors contributes about 9 percent of the country’s GDP, 45% of manufactured output and 40 % of
its exports. The SME provides employment to over million persons through more than 31 million enterprises
with lower labour to capital ratio and produces 6000 products.
8.Feeder to Large Scale Industries:
SME is complementary to the Large Scale Industries manufactured various types of component s, spare parts,
tools and accessories which required by the large scale sector.
9.Opportunities for Artisan:
In villages artisan/ specialist are having expertise in different fields are found. Because of lack of opportunities
their skills do not come to the light. SME industries are provide such a industry.
10.Increase Standard of Living:
With the establishment of small business in Rural areas or nearby regions villages get many type of facilities.
For example Employment, Electricity, water, Roads , Banks and mode of transport etc. in such a situation
promotion of standard of Living is inevitable.
11.Less pressure of population on Agriculture:
As more population depends upon land for survival the land is further divided into small pieces. It no longer
remains beneficial to do farming on such small fields .In every year there is a further increase of approximately
thirty lakhs people who depend on agriculture.
12.Equitable Distribution of Income :
With the establishment of the business the income of the country is not just concentrated with some handful
of city industrialists. This helps to reduce the gap between the rich and the poor in the country.
13.Social advantage
SME s offer opportunities for an independent way of life of people with a small means. They offer savings in
social overheads like Education, housing and medical facilities by taking industry near to the people. They help
to rise per capita income and standard of living in the country.

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III. SECTION –C ANSWER ANY 3 OF THE FOLLOWING 3 X 16 = 48
7.Briefly explain the classification of Entrepreneurs?
1.ON THE BASIS OF THE TYPE OF BUSINESS 2.ON THE BASIS OF STAGES OF DEVELOPMENT
3.ON THE BASIS OF MOTIVATION 4.ON THE BASIS OF TECHNOLOGY
5.ON THE BASIS OF CAPITAL OWNERSHIP 6.OTHER CLASSIFICATIONS
7.ACCORDING TO GENDER AND AGE 8.ACCORDING TO AREA
9.ACCORDING TO SCALE 10.OTHERS
1.ON THE BASIS OF THE TYPE OF BUSINESS
i)Business entrepreneurs:-who start business units after developing ideas for new products/services.
ii)Trading entrepreneurs :-who undertake buying & selling of goods, but not engage in manufacturing.
iii)corporate entrepreneurs:-who establish and manage corporate form of organization which have separate
legal existence.
iv)Agricultural entrepreneurs:- who undertake activities like raising and marketing of crops, fertilizers and
other allied activities.
V) Industrial entrepreneur: as the very name indicates industrial entrepreneur is one who sets up an industrial
unit. He perceives the opportunity to set up his unit, complies with necessary formalities to getting license,
power connection, pollution control clearance, arrange initial capital, etc
2.ON THE BASIS OF STAGES OF DEVELOPMENT
i)First generation entrepreneurs:-who do not possess any entrepreneurial background. They start industry by
their own innovative skills.
ii)Second generation entrepreneurs:-who inherit the family business and pass to next generation.
iii)Classical entrepreneurs:-who aims to maximize his economic returns at a level consistent with the survival
of the unit with or without an element of growth.
3.ON THE BASIS OF MOTIVATION
i)Pure entrepreneurs:-who are basically motivated to become entrepreneurs for their personal satisfaction,
ego etc..

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ii)Induced entrepreneurs:- who are induced to take up entrepreneurial role by the assistance and policy of
government including incentives, subsidies etc.
iii spontaneous Entrepreneurs: They are persons with initiative, boldness and confidence in their ability ,inner
urge and inborn talent and drive them to establish their own venture
4.ON THE BASIS OF TECHNOLOGY
i)Technical entrepreneurs:- who are task oriented and ‘craftsman type’. They prefer doing to thinking.
ii)Non-technical entrepreneurs:- who are not concerned with technical side, but rather with marketing and
promotion.
iii)Professional entrepreneurs:- who start a business unit, but later sell the running business and start a new
unit later.
5.ON THE BASIS OF CAPITAL OWNERSHIP
i)Private entrepreneurs:- individual or group set up enterprise, arrange finance, share risk etc..
ii)State entrepreneurs:- means the trading or industrial venture undertaken by the state or the government
itself.
iii)Joint entrepreneurs:- the combination of private and government entrepreneurs.
OTHER CLASSIFICATIONS
6.ACCORDING TO GENDER AND AGE i)Man entrepreneurs ii)Women entrepreneurs iii)Young entrepreneurs
iv)Old entrepreneurs v)Middle-aged entrepreneurs
7.ACCORDING TO AREA i)Urban entrepreneurs ii)Rural entrepreneurs
8.ACCORDING TO SCALE i)Large scale entrepreneurs ii)Medium scale entrepreneurs iii)Small scale
entrepreneurs iv)Tiny scale entrepreneurs
9.OTHERS i)Spiritual Entrepreneur ii) Social entrepreneurs iii)Edupreneurs
iv)Fabian Entrepreneurs
Fabian entrepreneurs are cautious and skeptical in experimenting changes in their enterprises. Such
entrepreneurs are shy, lazy and lethargic. They are imitative by nature but are not determined and also lack
power.

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v)Drone entrepreneurs
Drone entrepreneurs are characterized by a refusal to adopt opportunities to make changes in production
formulae even at the cost of reduced returns. They can suffer loss but are not ready to make changes in their
existing production methods.
Intrapreneur:
Intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into
a profitable venture by operating within the organizational environment.
8.What are the stages involved in the preparing promotion plan or action plan?
Developing action plan can help change makers turn their vision into reality and increase efficiency and
accountability within an organization. An action plan describes the way your organization will meet its
objectives.
Step 1 : Defining the Problem:
Evaluate the situation. Have all possibilities been considered? In this stage explore all possibilities ask all
involved or interested individuals for their input into identifying the problem.
Step2: Collect and Analyze the data:
Now we have to identify the problem, we collect and analyze the data to prove or disprove the assumption
that our problem is a result of inconsistent.
Step3: Clarity and Prioritize the problem:
If there is more than one problem, you will need to prioritize the problems so you can focus on the most
important problem first. Ask the following questions to help you sort the problems with the higher priority
issues at the top of the list.
Step 4: write a Goal statement for Each Solution:
The next step in the process is setting S.M.A.R.T goals or goals that are
S-Specific M- Measureable A- Achievable R- Relevant T-Timely
The team needs to go through the problems that have been indentified and evaluate them for each of these
items.
Step 5: Implement solutions- The Action Plan:
Step 5 is to write an action plan that addresses the problems. An action plan is written so that any employee
can do the task successfully alone and followed much like recipe .it converts the goal or plan into people
process.

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Step 6. Monitor and Evaluate:

The next step in the problem solving process is to design a method for monitoring the outcome. The method
we select should assess whether the goal and action plan corrects the problem. In addition a well designed
monitoring method will help the team to determine when the action plan needs to be improved.
Step 7: Restart with New problem or refine the old problem:
The problem solving steps are cyclical. If the first cycle is successful the process starts over with a new
problem. If the same problem persists, there must be refinement so the process starts over with refinement of
the original problem as more current data is analysed.
9.Compare and contrast between Private company and Public Company?
Private company Public company

1. A private ltd the company is one that is not 1. The public company refers to a company that
listed on a stock exchange. is listed on a recognized stock exchange.
2. Private company can be started with two 2. There must be at least 7 members to start a
members public company.
3. A private company can have a maximum 200 3. There is no maximum limit of member in
members. Subject to conditions. public company
4. Private ltd company can have a minimum of 4. The public company should have at least 3
two directors directors
5. There is no compulsion to conduct statutory 5. It is compulsion to call a statutory general
meeting meeting of members in case of a public
6. The issue of prospectus/ statement instead company.
of the prospectus is not mandatory. 6. The issue of prospectus/statement instead of
7. A pvt company can start its business just the prospectus is mandatory in case of a
receiving a certificate of incorporation public company.
8. Minimum paid up capital is 1 lakh 7. To start a business, the public company
needs a certificate of commencement of
business after it is incorporated.
8. Minimum paid up capital is 5 lakhs.

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10. Explain the marketing problems of Small scale Industries?
Small scale industries are not in a position to play role effectively due to various constraints. The various
problems faced by small scale industries are as under:
1. Finance:
The scarcity of capital and inadequate availability of credit facilities are there major causes of this
problem.
2. Raw Materials:
SSI units are facing numerous problems like availability of inadequate quantity and poor quality and even
supply of raw materials are not on regular basis.
3.Idle capacity:
Under utilization of capacity of machineries can be found in SSI units due to non availability of Raw materials
and Power, labour and not fully equipped with advanced technology.
4.Technology:
SSI are not fully exposed to the latest technology. They lack requisite resources to update the modern
technology in their plant and machinery which leads inadequate production.
5.Marketing :
The SSI is facing marketing problems . they are not in a position to get firsthand information about the market
about the competition, taste and preference of customer. Product ,pricing ,promotional and distribution
channel problems.
6.Infrastructure:
Infrastructure aspects adversely affect the function of SSI . there is inadequate availability of transportation,
communication ,Power and other facilities in backward areas.
7.Under utilization of capacity:
Most of the SSI units are working below full potentials or there is gross under utilization of capacities. Large
scale units are working 24 hours a day ie in three shifts of 8 hours each and are thus making best possible use
of their machinery and equipments. Whereas SSI units are using 40 to 50% of installed capacities.
8.Project planning:
Poor project planning is an another important problems in SSI. These entrepreneurs do not attach much
significance to viability studies ie both technical and economical and plunge into entrepreneurial activity out
of more enthusiasm and excitement.

Page 20

11.List out the institutions offering financing assistance to small scale Industries?
The various financial institutions which provide finance to entrepreneur.
1.Industrial Finance corporation of India(IFCI):
The industrial finance corporation of India (IFCI) was established in 1948 under an Act of parliament with the
object provoking medium and long term credit to industrial concerns in India.
2.The Industrial Development Bank of India(IDBI) :
The industrial Development Bank of India was established on 1st july 1964 under the Industrial Development
Bank of India Act, as a wholly owned subsidiary of the Reserve bank of India. The IDBI has been assigned a
special role to play in regard to industrial development.
3.The Industrial Credit Investment Corporation of India(ICICI):
The Industrial Credit Investment Corporation of India(ICICI) was conceived as a private sector development
bank in 1955 with the primary function of providing development finance to the private sector.
4.The National Bank for Agricultural and Rural Development(NABARD):
The National Bank for Agricultural and Rural Development(NABARD) provides credit for the promotion of
agriculture, small scale industries ,cottage industries, handicrafts and other rural allied economic activities in
rural areas.
5.The Small Industries Development Bank of India (SIDBI):
The Small Industries Development Bank of India (SIDBI) is an apex level national institution for promotion,
financing and development of Industries in the small scale sector.
6.Industrial Investment Bank of India(IIBI):
The Industrial Investment Bank of India (IIBI) was established in 1985 and it extends loans and advanced to
industrial concerns, underwrites stocks ,shares, bonds, debentures and provides guarantees for loans/
deferred payments.
7.Life Insurance Corporation of India(LIC):
Life Insurance Corporation of India(LIC) was set up under the LIC Act of 1956, as a wholly –owned corporation
of government of India, on nationalization of the Life Insurance business in the country.

Page 21

8.General Insurance Corporation of India:
General Insurance Corporation of India (GIC) was established in januvary 1973,GIC has been participating with
other financial institutions in extending term loans to industrial undertakings and providing facilities for
underwriting /Direct subscription to their shares and debentures.
9.Export –Import Bank of India(EXIM):
Export –Import Bank of India(EXIM Bank ) was set up on January 1 1982 as the principal financial institution
for promotion and financing of India’s International Trade.
10.Khadi & Village Industries Commission (KVIC)
Khadi & Village Industries Commission (KVIC) is engaged in the development of khadi and village industries in
rural areas.
11.National Small Industries Corporation Ltd (NSIC):
National Small Industries Corporation Ltd (NSIC) was set up by the Government of India in 1958 with the
objective of promoting and developing small –scale industries in the country.
12.State Industrial Development Corporation (SIDC):
State Industrial Development Corporation (SIDC) provides assistance by the way of term loans ,underwriting
and direct subscription to shares or debentures and guarantees.
13.State Small Industries Development Corporation(SSIDC):
State Small Industries Development Corporation(SSIDC) are state government undertakings, responsible for
catering to the needs of the small scale ,Tiny and cottage industries in the state or union territories under their
justification.
14.State Finance Corporations(SFC):
State Finance Corporations(SFC) function with the objectives of financing and promoting small and medium
scale industry for achieving balanced regional socio-economic growth.

Page 22


I.SECTION A ANSWER ANY 5 SUB QUESTIONS 5 X 2 = 10
a. What is Business plan?
The business plan is written document prepared by the entrepreneur that describes all the relevant external
and internal elements involved in starting a new venture.
A business plan is a blue print of step by step process that would be followed to convert business idea into
successful business venture.
b. Give the meaning of Industrial sickness?
Industrial sickness can be defined a condition wherein an industrial unit fails to generate surplus on a
continues basis and depends on frequent infusion of external funds.
c. Expand a.DIC b. KSSIDC

DIC : District Industrial Center
KSSIDC : Karnataka State Small scale Industries Development Corporation Ltd.
d. What is marketing feasibility study?

Market feasibility analysis consists of potential markets , customer segmentation, Demand forecasts ,
marketing strategies, cost, and pricing methods etc.
e. What is Industrial Policy?

Industrial policy is meant for the growth and development of the industries and in the process of achieving
these all other activities are defined by the Industrial policy. The growth pattern of the industrial activity is
also monitored by Industrial policy by framing certain rules and procedures.
f. Give the meaning of cottage industry?

A cottage industry is a traditional industry, catering mainly to the local population and dependent upon local
raw materials. They are located usually at the homes of the producers, hence the name cottage industry.

Page 23

II.SECTION B ANSWER ANY 3 OF THE FOLLOWING 3 X 6 =18
2.Briefly explain the consequences of Industrial sickness?

The consequences of Industrial sickness are:
1.Set back to the employment prospects:
it involves lack of opportunity, lack of labour intensive, high unsatisfaction rate etc
2.Fear of Industrial Unrest:
Here high unemployment rate , low productivity and unfavour of trade union.
3.Wastage of Resources:
It includes lack of infrastructure facilities and block of capital equipment.
4.Adverse impact on related: channel break down between industries.
5.Adverse effect on Investor and employment:
It has low satisfaction of investor, negative effect on the same line new effect on the growth rate of industry.
6.Lossess of banks:
Here low recovery rate of banks and institution, loss of image in the market, lack of financial support for new
industries.
7.Loss of revenue to the Government:
This is of income to government, loss of Government benefits, etc.
3.Explain briefly the steps involved in setting up of Small Scale Industry?
Step 1- Product or Service Selection:
This is the most important step in setting up a small scale industries. The main factors to be considered in
deciding a suitable project are as follows:
a. Background and experience of entrepreneurs.

b. Availability of the right technology
c. Marketability of the product or Service
d. Investment capacity
e. Availability of plant and Machinery ands raw materials
f. Availability of proper infrastructure facilities and availability of Labour.

Page 24

Step 2 –Location selection:
After deciding on the project, the next important decision an entrepreneur has to make is about the location
of the project. There are some factors to be considered:
a. Nearness to Market
b. Availability of raw materials and Transportation facilities
c. Availability of communication
d. Availability of proper infrastructure facilities
e. Availability of Government Policy ,Incentives and concessions.
Step 3 : Project feasibility:
The important facts are as follows:
a. Market analysis carried out to find out the aggregate demand of the proposed product or services.
b. Technical analysis seeks to determine whether the prerequisites.
c. Financial Analaysis seeks to ascertain whether the proposed project will be financially viable.
d. Economic analysis concerned judging a project from the larger, social point of view.
Step 4: Preparation of Project profile:
a. Introduction b. promoters background d. product or services e. Description f. market and marketing g.
cost of production and profitability.
Step 5. Business plan Preparation:
There are three major alternatives: a . proprietary b. partnership company
Specific clearances b. land selection c. plant and machinery d. infrastructure facilities e. project report.
4.Discuss the Qualities of an Entrepreneurs?

The qualities of successful entrepreneurs are as follows:
1.Mental ability:
It consists of intelligence and creative thinking. An entrepreneur must be reasonably intelligent and creative
thinking and must be able to engage in the analysis of various problems and situations in order to deal with
them.
2.Clarity of Objectives:
An entrepreneur should be clear as to the exact nature of the goods to be produced and subsidiary activities
to be undertaken.
3.Achievement motivation:
This is most important characteristics of an entrepreneur since all other characteristics emanate from this
motivation. He must have a strong desire to achieve business goals.
4.Human relations ability:
An entrepreneur must maintain good relations with his customers if he is to establish relations that will
encourage them to continue to patronize his business.

Page 25

5.Prudence:
A successful entrepreneur must be prudent in all his dealings. He should have ability to work out the details of
the venture from all angles, assess the favourable factors and pitfalls and take suitable measures to overcome
the pitfalls.
6.Risk taking :
An entrepreneur is not a gambler and hence he should not assume high risk. However he must love a
moderate risk situations, high enough to be exciting but with fairly reasonable chance to win.
7.Secrecy maintenance:
A successful entrepreneur must capable of maintaining and guarding all his business secrets. Leakage of
business secrets to trade competitors will definitely lead to the downfall of his business. Hence he should be
very careful in selecting his subordinates.
8.Communication Skill:
Good communication skill enables them to put their points across effectively and with clarity and thereby
helps them to win customers.
9.Keen Foresight:
An entrepreneur must have keen foresight to predict the future business environment. He should have the
capacity to visualize the likely changes to take timely actions accordingly.
10.Innovativeness:
The entrepreneurs should initiate research and innovative activities to produce new goods and services. It is a
never ending process.
5.What are the objectives of Industrial Estate?
Industrial Estates
Industrial estates is defined to indicate the provision of the basic infrastructure for rapid development of the
area.
The primary objective of the industrial estate is to provide factory accommodation to small scale industries at
suitable sites with facilities of water, electricity, transport, banks, post offices, canteens first aid etc. and thus
create a healthy atmosphere for the development of Industries.
Objectives:
1. To foster the growth of Small scale Industries.
2. To shift small scale industries from congested areas to esatate premises with the view to increase their
productivity.
3. To achieve decentralized development in small towns and large villages
4. To encourage the development of industry as well as entrepreunership by providing economies and
incentives.
5. To encourage growth of an ancillary industries in the townships, surroundings major industrial
undertakings.

Page 26

6.Explain the types of entrepreneurs?
Types of entrepreneurs
1.ON THE BASIS OF THE TYPE OF BUSINESS 2.ON THE BASIS OF STAGES OF DEVELOPMENT
3.ON THE BASIS OF MOTIVATION 4.ON THE BASIS OF TECHNOLOGY
5.ON THE BASIS OF CAPITAL OWNERSHIP 6.OTHER CLASSIFICATIONS
7.ACCORDING TO GENDER AND AGE 8.ACCORDING TO AREA
9.ACCORDING TO SCALE 10.OTHERS
1.ON THE BASIS OF THE TYPE OF BUSINESS
i)Business entrepreneurs:-who start business units after developing ideas for new products/services.
ii)Trading entrepreneurs :-who undertake buying & selling of goods, but not engage in manufacturing.
iii)corporate entrepreneurs:-who establish and manage corporate form of organization which have separate
legal existence.
iv)Agricultural entrepreneurs:- who undertake activities like raising and marketing of crops, fertilizers and
other allied activities.
V) Industrial entrepreneur: as the very name indicates industrial entrepreneur is one who sets up an industrial
unit. He perceives the opportunity to set up his unit, complies with necessary formalities to getting license,
power connection, pollution control clearance, arrange initial capital, etc
2.ON THE BASIS OF STAGES OF DEVELOPMENT
i)First generation entrepreneurs:-who do not possess any entrepreneurial background. They start industry by
their own innovative skills.
ii)Second generation entrepreneurs:-who inherit the family business and pass to next generation.
iii)Classical entrepreneurs:-who aims to maximize his economic returns at a level consistent with the survival
of the unit with or without an element of growth.
3.ON THE BASIS OF MOTIVATION
i)Pure entrepreneurs:-who are basically motivated to become entrepreneurs for their personal satisfaction,
ego etc..
ii)Induced entrepreneurs:- who are induced to take up entrepreneurial role by the assistance and policy of
government including incentives, subsidies etc.
iii spontaneous Entrepreneurs: They are persons with initiative, boldness and confidence in their ability ,inner
urge and inborn talent and drive them to establish their own venture
4.ON THE BASIS OF TECHNOLOGY
i)Technical entrepreneurs:- who are task oriented and ‘craftsman type’. They prefer doing to thinking.
ii)Non-technical entrepreneurs:- who are not concerned with technical side, but rather with marketing and
promotion.
iii)Professional entrepreneurs:- who start a business unit, but later sell the running business and start a new
unit later.
5.ON THE BASIS OF CAPITAL OWNERSHIP

Page 27

i)Private entrepreneurs:- individual or group set up enterprise, arrange finance, share risk etc..
ii)State entrepreneurs:- means the trading or industrial venture undertaken by the state or the government
itself.
iii)Joint entrepreneurs:- the combination of private and government entrepreneurs.
OTHER CLASSIFICATIONS
6.ACCORDING TO GENDER AND AGE i)Man entrepreneurs ii)Women entrepreneurs iii)Young entrepreneurs
iv)Old entrepreneurs v)Middle-aged entrepreneurs
7.ACCORDING TO AREA i)Urban entrepreneurs ii)Rural entrepreneurs
8.ACCORDING TO SCALE i)Large scale entrepreneurs ii)Medium scale entrepreneurs iii)Small scale
entrepreneurs iv)Tiny scale entrepreneurs
9.OTHERS i)Spiritual Entrepreneur ii) Social entrepreneurs iii)Edupreneurs
iv)Fabian Entrepreneurs
Fabian entrepreneurs are cautious and skeptical in experimenting changes in their enterprises. Such
entrepreneurs are shy, lazy and lethargic. They are imitative by nature but are not determined and also lack
power.
v)Drone entrepreneurs
Drone entrepreneurs are characterized by a refusal to adopt opportunities to make changes in production
formulae even at the cost of reduced returns. They can suffer loss but are not ready to make changes in their
existing production methods.
Intrapreneur:
Intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into
a profitable venture by operating within the organizational environment.

Page 28

III. SECTION –C ANSWER ANY 3 OF THE FOLLOWING 3 X 16 = 48
7.Explain the various steps involved before commencing business?
The various steps involved before starting a Business includes the following:
Step 1 – write a Business plan:
Write a business plan is the first step whether it is a need to secure a business loan or Not. A well prepared
plan revisited often- will help to steer business all along its growth curve, Break it down into mini –plans such
as Marketing, production, sales etc.
Step 2 –Get Help and training:
Starting a business can be a lonely endeavor, but there are lot of resources that may come handy and that can
help you as you get started.
Step 3 –Choose your Business Location:
Where to locate business may be the single most important decision to make . Many factors come into play
such as proximity to suppliers, the competition, transportation access , demographics and zoning regulations.
Step 4 –Understanding the financing options:
Choose to bootstrap, fall back on savings, or even keep a full time job until your business is profitable, explain
the options data collected and streamlined.
Step 5 –Decide on a Business Structure:
Going it alone or forming a partnership Structure? Thinking of incorporating? What about LLC? How you
structure business can reduce the personal liability for business lossess and debts. Some choices can you tax
benefits.
Step 6 – Register Business Name:
Registering a doing business as Name or trade Name is the only needed. If naming business as something
other than personal name, the names of your partners, or the officially registered name of your LLC or
corporation.
Step 7- Get a Tax ID:
Not every business needs a tax ID from the IRS also known as an “Employer Identification Number” or EIN but
if possessing employees run a business partnership, a corporation or meet certain IRS criteria, it is a must to
obtain an EIN from the IRS .there is a need to start paying estimated taxes to the IRS.

Page 29

Step 8 –Register with Tax Authorities:
Employment taxes, Sales Taxes and state Income taxes are handled at the state level. Possessing a good
knowledge to take a decisions with the advice of good practicing consultants matter a lot. Hence registering
with tax authorities is beneficial.
Step 9 – Apply for permits and Licenses:
All businesses even home based businesses need a license or permit to operate.
Step 10 –Hiring Employees:
As the proposed plan is now gained momentum, hiring employees according to the business plan and
requirement of role and responsibility to be fulfilled matters.
8.Explain the Major aspects of Business plan?
Major aspects of a Business Plan:

1. Financial aspects
2. Marketing Aspects
3. HRM Aspects
4. Technical aspects
5. Social aspects
1. Financial Aspect:
A financial can be a Budget, a plan for spending and saving for future income. This plan allocate future
income to various types of various types of expenses. A financial plan is also called as investment plan.
i)Cash Budget:
it is an estimate of cash receipts s from all sources and cash payments for all purposes and net cash balances
during the Budget period. It ensures that the business has adequate cash to meet its requirements.
ii) Working capital:
Working capital refers to the cash a business requires for day to day operations, or more specifically for
specifically purchasing of Raw materials, paying rent, wages , transport expenses, inventory maintenance .
iii) Income Statement:
The Performa of income statement or projected income statement is a projection of Income for a period of
time in future. The analyst may wish to evaluate each component of the cost of goods sold. A detailed study
analysis of purchases, production wages and overhead costs is likely to produce the most accurate forecast.
iv) Cash flow statement:
A statement of changes in the financial position of a firm on cash basis is called cash flow statement. Such a
statement enumerates net effects of the various business transactions on cash. A cash flow statement

Page 30

summarizes the causes of changes in cash position of a business enterprise between dates of two balance
sheets.
v) Balance sheet:
Performa balance sheet is forecasting of flow of funds and according to this the estimation of every item
should be made and checked. The preparation of Performa balance sheet is made on the basis of Performa
income statement and supporting schedules and budgets.
Vi. Break even analysis:
Break Even Point(BEP) refers to the level of operation at which the project neither earns profits nor incurs loss.
Calculation of BEP for the given cost and price levels indicates the minimum capacity utilization that the that
the project should be aimed at in order to be in a no profit , no loss situation.
VII. Equity and debt funds:
Equity financing is required to start up a Business Part of debt fund is also taken as it helps purchase of
machinery and other fixed assets, whereas short term debt can be utilized for working capital purpose. Major
source of financing will be assistance from bank and other financial institutions.
2. Marketing Aspect:
All the efforts of the entrepreneur can go in vain if he does not have proper markets to sell his goods or
services. A well conceived idea, a strongly supported financial backup can become a failure if the
entrepreneurs does not have demand in the market so we shall focus on the marketing aspects of business
plan.
1. Target market , Market segmentation and positioning
2. Marketing decisions
3. Product / service strategy
4. Pricing strategies
5. Promotion Strategies:
Advertising, Indoor or outdoor advertising
Personal selling, sales promotion
6. Distribution strategy – Channels of distribution
7. Sales forecast
8. Marketing Strategy.
Human Resources Aspects:

1. Organization chart with the names and titles of the key executives
2. Brief details of these executives with their previous experience, Education and qualification
3. Detailed resume of the each executives.
4. Contribution of the each individual to the company their duties and responsibilities.
5. Specify their initial salary , incentives fringe benefits and other benefits provided.

Page 31

6. Attempt should be made to keep the initial salary low and to keep the deferred compensation high.
7. What key position remains unfilled?
8. Bring out the plans to retain and attract the efficient existing employees.
9. List of top level executives
10. Provide the names of the legal, accounting, banking and other important organizations that will
guide the organization.
11. If a firm service oriented firm it requires specific skills with required expertise to render services to
consumer.
12. If the firm is production unit it requires the people with technical as well as conceptual capabilities.
As the form has different departments categories of people like skilled, unskilled, technical,
managerial and professional personnel.
13. The Business plan should project on HRD and give details training and departmental
Programmes which will be deployed to enhance skills and capabilities of Employees.
14.The business plan should also furnish about the promotion, transfer, Performance appraisal, the
audit etc.
15. The Business plan should mention about the number of employees employed presently and future
expansion .
16. The details about the management practices, leadership styles, Management development
programmes, retrenchment policies ,rules ,organization culture should be clearly depicted in business.
3. SOCIAL ASPECTS:
To maintain good reputation and long survival . The business should not only concentrate on profit
maximization but also should focus and share certain profit on general interest of the society.
The various social responsibilities of an entrepreneur:
1. To produce quality goods or services
2. To provide true data
3. To maintain the safety of the product user.
4. To restrict adulteration of products.
5. Improved and safety packing and packaging should be provided.
6. Mention the steps to control pollution.
7. Optimum utilization of natural resources.
8. To give equal opportunity for women employees.
9. To provide safety and healthy work environment to the employees
10. TO provide educational facility
11. To provide proper insurance facility to employees
12. Firm’s involvement in donation, sponsorship of public health projects.

Page 32

4. Technical Aspect of Business Plan:

The technical aspect of business plan is an important elemet and it is necessary whether it is a
manufacturing concern, retail or service industry.
The few important technical aspects are :
1 . Describe the technical feasibility of the project.
2.The business plan should specify the quantity to be provided. Specification of the project etc.
3. Describe the physical plant layout and design required and the method of acquiring the raw
materials
4. Measures should be adopted to dispose of waste, various methods of disposal of waste
5.Details of pollution control measures..
6.it should also choose an appropriate technology based on his affordability, ease, suitability,
maintainability and functionality.
7.Areas where the latest technologies are implemented like HR, Finance, Marketing, Inventory
management, Order tracking, production ,internal communication etc.
Following factors should be consider while choosing technology;

1.Functions 2. Ease of Use 3. Security
4. Flexibility 5. Maintainability 6.Financial consideration
9.Enlist the financial institutions offering support to SSI. Explain the role of IFCI and SIDBI
1.State financial corporations(SFC)

State financial corporations are established by respective states are playing a significant role in providing
financial assistance and other types of support to SSIs. State financial corporation Act was passed in 1951
provides long term finance for certain identified group of items in manufacturing as well as services sectors.
2.KSFC:
KSFC extends financial assistance to set up tiny ,small, medium and large scale industrial units in Karnataka.
Finances such as long term and medium term loans ,lease ands hire purchase finances are provided by KFSC
It also renders merchant banking services. Fund based activities are also considered.
3.SIDBI:
SIDBI was established in 1990. This institution through its five regional offices and about 33 branches provides
various types of finance to SSI. The types are 1. Direct finance 2.Foreign Currency loans 3. Venture capital
fund 4. Refinancing and 5.Micro financing
4.Various Commercial Banks:
Various commercial banks also extending financial assistance to SSI through their schemes such as priority
sector leading ,Institutional arrangements, General purpose term loans ,Entrepreneur scheme, Equity fund

Page 33

schemes, sri shakthi package, Margin money scheme ,Mahila udhayam Nidhi scheme ,Export finance scheme.
Etc.
5.KSIDC:
KSIDC is another institution which extends financial support to SSis in Karnataka. This organization of
Karnataka has no specific financial programme for adaptation of pollution control etc. but provides medium
and long term loans equipment financing and direct equity participation.
6.IFCI:
IFCI the first development financial institution in India was established in 1948 as a statutory corporation.
Besides providing project finance, financial services ,nonproject specific assistance, corporate advisory
services. IFCI has promoted institution such as National Stock Exchange , Management Development Institute.
ICRA LTD ,LIC Housing Finance Ltd, and a Number of TCOs.
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA(SIDBI)

Small Industries Development Bank of India (SIDBI) was set up by an act of parliament, it commenced
operations in April 2 ,1990
The objectives of SIDBI are:
1. Promotion , financing and developing of industry in the small scale sector.
2. Co-coordinating the functions of other institutions engaged in similar activities.
3. Setting up to new projects
4. Expansion, diversification, modernization, technology up gradation, quality improvement
rehabilitation of existing units.
5. Strengthening Marketing capabilities of SSI units.
6. Development of infrastructure fir SSI units.
7. Export promotion.
Functions of SIDBI:
1. Refinances the credits and loans granted by Financial institutions to small scale industries.
2. SIDBI also serves the functions of discounting and rediscounting of bills of SSI units.
3.SIDBI also extend direct assistance to the SSI for exporting goods.
4.SIDBI also assists the SSI units such as Factoring and Leasing.
5.SIDBI helps in National small scale industries making Hirepurchase, leasing and marketing activities.
6.SIDBI provides various soft loans like Mahila vikas nidhi, National enquiry fund, Mahila udayam Nidhi. And
also provides seed capital to the start ups.
7.SIDBI took a step ahead in order to renovate the SSI units by instituting advanced technology in their
operations.

Page 34

INDUSTRIAL FINANCE CORPORATION OF INDIA(IFCI):

The industrial finance corporation of India (IFCI) was established in 1 July 1948 under an act of parliament with
the object of providing medium and long term credit to industrial concerns in India.
Objectives of IFCI:
1. To extend financial assistance to industries in Rupees as well as foreign currency as per the necessary.
2. Direct subscription on shares and debentures of Industries.
3. Underwriting shares, debentures and issues of industries.
4. Financial assistance for purchase of equipments.
5. Financing to leasing to leasing and hire purchase companies.
6. The project value more than Rs 300 lakhs are financed by IFCI. The lesser value project taken care by
the IDBI or SFC
7. Stand guarantee for loans taken by industries from commercial Banks or state cooperative banks.
8. Guaranteeing for deferred payments due from the industries in connection with purchase of capital
goods which may be local or imported.
9. Guarantying loans from outside of the country in foreign currency with approval from the central
government.
Functions of IFCI
1.sactioning loan to the companies or by buying their debentures. Maximum duration of both is 25 years.
2.Raising capital by issuing shares, debentures, bonds etc on behalf of company. Maximum duration of the
securities is 7 years.
3.Raising the capital of public limited companies by purchasing their securities ie debentures, shares etc
4.Taking guarantee payments on behalf of those companies which make purchase of capital goods within or
outside the India.
5.Sanctioniing loan to the companies on the directive of the central Government or World Bank.
6. to set up a new company.
7.To expand or diversify the existing companies.
8.To renovate and modernize the existing company.
9. to fulfill the requirements of Working capital and to settle the liabilities of existing companies but only in
exceptional situations.

Page 35

10. Explain the Factors influencing entrepreneurship?
Factors influencing Entrepreneurship
I. Psychological Factors: II. Cultural factors:

d) Culture
a) Need for achievement e) Religious belief
f) Minority group
b) Personal Motives g) Spirit of capitalism
c)Recognition
d) Need of Authority
IV. Economic factors:

III. Social factors:
a) Legitimacy of entrepreneurship a) Infrastructural facilities
b) Social Marginality b) Financial Resources
c) Family, role Models and association with c) Availability of materials and knowhow
similar type of Individuals d) Labour conditions
d) Caste systems e) Market
e) Occupation f) Support system
f) Education and technical qualifications g) Government Policy
g) Social status
h) Social Responsibility V personality factors:
a) Personality
b) Independence
c) Compulsion

Page 36

11.Explain the financial incentives available to small scale Industries?
The various financial incentives of SSIs include concessions ,Priority and Aid
1.Diffrential rate of Interest scheme:

Under this scheme, loans upto rs 6,500 as term loans and rs1500 as working capital are provided by
commercial banks to the weaker sections at a concessional rate of interest of 4% p.a.
2.Composite loan scheme:
This scheme meets the entire financial requirements of artisans, village and cottage industries where the total
credit requirement s for equipment finance and working capital do not exceed RS 50,000.
3.Margin money scheme for tiny sector:
Under this scheme assistance provided to the small scale unit whose investment in plant and machinery does
not exceed Rs 2Lakhs and are located in villages and towns with a population of less than Rs50,000.
4.Special capital scheme of IDBI:
The scheme is being operated by IDBI for extending equity type of assistance to such entrepreuners who
possess the necessary skill and experience but do not have adequate financial resources to set up projects.
Primarily in the small scale and tiny sectors.
5.Seed capital scheme:
The scheme was introduced by IDBI with a view to assist the new entrepreneurs who do not have adequate
resources of their own to set up industrial project in the small and medium sectors with project cost not
exceeding Rs 3 crores.
6.Equity Fund scheme:
Under this scheme, SBI provides interest free assistance to the small entrepreneurs for meeting the equity gap
in the project.
7.Soft loan scheme for Modernization:
Under this scheme, IDBI provides financial assistance to the units in selected industries to overcome the
backlog of modernization/revolution/replacement of plant and machinery so as to improve their productivity
and competitiveness. There is no minimum or maximum limit for loans under this scheme.

Page 37

8.Bills rediscounting Scheme:
This scheme was introduced by IDBI with the objective of helping the manufactures of indigenous machinery
and equipment. To push the sales of their products by offering deferred payment facilities to the prospective
purchaser- user. And to enable the purchaser- user of the machinery to utilize the machinery acquired and
repay its cost over a number of years.
9.Margin Money scheme for Revival of sick units:
The scheme was introduced by Govt of India with a view to help the state Governments in the revival of sick
small scale units.
10.Rehabilition scheme for sick units:
The small scale units which have been assisted by SFC/SIDC and are classified as sick are eligible for assistance
under the scheme. The extent of relief depends upon the merits of each individual case.
11.Credit guarantee scheme:
Under the scheme, guarantees are extended to borrowers engaged in small scale industrial activities and also
in respect of credit facilities granted to organizations assisting workers, artisans and other self employed
persons engaged in industrial activities.

Page 38

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Question Bank previous year papers solved

SNR DEGREE COLLEGE,JIGANI

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V SEM B.COM EXAMINATION NOV/DEC 2019

ENTREPRENEURIAL DEVELOPMENT TIME:3 HRS MARKS :70

I.SECTION A ANSWER ANY 5 SUB QUESTIONS 5 X 2 = 10

SNR DEGREE COLLEGE,JIGANI

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2.State the qualities of an Entrepreneur?

Qualities of successful Entrepreneur

SNR DEGREE COLLEGE,JIGANI

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3.List the objectives of an entrepreneur?

1. To promote the first generation Business man and Industrialists

1.Selecting the name of the company

SNR DEGREE COLLEGE,JIGANI

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SNR DEGREE COLLEGE,JIGANI

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6.What are the advantages of Industrial Estate?

7. Describe the role of SSIs in Indian Economic Development

Role played by SSI in the development of Indian Economy

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6. Developing Entrepreneurial capacity:

SNR DEGREE COLLEGE,JIGANI

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8.Explain the functions of an Entrepreneur?

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b) Managing Work Force:

9.Explain the importance of Business Plan?

SNR DEGREE COLLEGE,JIGANI

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10. Shree shakthi package

11.Discuss the various problems encountered by Women entrepreneurs in India?

Problems faced by women entrepreneurs: 11. Lack of self confidence

SNR DEGREE COLLEGE,JIGANI

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V SEM B.COM EXAMINATION NOV/DEC 2018

ENTREPRENEURIAL DEVELOPMENT TIME:3 HRS MARKS :70

I. SECTION A ANSWER ANY 5 SUB QUESTIONS 5 X 2 = 10

c. What is feasibility report?

d. What do you mean by Industrial Estate?

e. Who is spontaneous entrepreneur?

SNR DEGREE COLLEGE,JIGANI

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II. SECTION B ANSWER ANY 3 OF THE FOLLOWING 3 X 6 =18

2.List out the advantages of small scale Industry?

Advantages of small scale industries:

3.What are the aspects to examined while deciding technical feasibility?

1. Material inputs, raw materials

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7. Manufacturing process and technology

4.Explain the objectives of seminars and conventions organized by AWAKE?

Association of Women entrepreneurs of Karnataka(AWAKE):

SNR DEGREE COLLEGE,JIGANI

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5.What are the objectives of Industrial Estate?

6.What is the role of SSI in stimulating the economic activities?

Role played by SSI in the development of Indian Economy

5.Utilizing Resources Optimally: