0 08-08-2020

ENTREPRENEUR
CIMAGE COLLEG

Abhijit Prasad
abhijitprasad10@gmail.com

ABHIJIT PRASAD 0
1 08-08-2020

08-08-
2020
INTRODUCTION
MEANING- ENTREPRENEUR is a loanword from French its means to undertake.

Schumpeter “Entrepreneurship is an innovative function it is a leadership rather than an ownership.”

Franklin Lindsay, “Entrepreneurship is defined as anticipating the future requirements of society and
successfully meeting these needs with new, creative and imaginative combinations of resources”.

CHARACTERSTICS/ NATURE–
1. Innovation -Entrepreneurship is an innovative function as it involves doing thing in new and
better way.
2. Economic activity-
3. Creation of value- new product. And entrepreneur is virtually a creative and a purposeful
activity.
4. Dynamic process- all the changes in environment
5. Risk bearer-

11-08-2020
Role of entrepreneurship-
1. Employment Generation -
2. Promote capital formation –
3. Balance regional development- difference in wealth
4. Increase in govt revenue
5. Creation wealth
6. Increase per capital income

12-08-
Factors – 2020
1. Economic factors-
2. Socio factor-Religion, Cast, Family Background
3. Political Factor- Change in state govt, stable is important for entrepreneurship.

ABHIJIT PRASAD 1
2 08-08-2020

4. Work environment – When worker is not satisfied with working environment therefore
it changes his organisation.
5. Govt scheme and subsidies – govt is giving subsidies for encourage entrepreneurship.

17-08-
Qualities of Entrepreneur –
1. Success and achievement-
2. Opportunity Explorer- It is also known as innovators.
3. Risk Bearer-Moderate risk
4. Feedback- for correct themselves without any delay.
5. Planner- Realistic in nature.
6. Flexibility
7. Self-confidence-
8. Motivator
9. Leadership
10. Facing uncertainty- This type of business therefore he is alert about uncertainty. Ex-
Economic recession
Functions of an entrepreneur-
An entrepreneur is expected to perform the following function-

1. Assumption of Risk- The entrepreneur assumes all possible risk of business which emerge
with change in the taste of consumers, techniques of production and innovation. Such risk is
not insurable, and the entrepreneur must bear the loss, if any.
2. Business Decisions-The entrepreneur must decide the nature and type of business to
undertake the nature and type of goods that must be produced or services that must be
provided to customer. Ex- when customer wants 12000 then same amount will be produce
by the manufacturer therefore it gets profit and he doesn’t maintain his production then he
gets loss.
3. Managerial Functions- It is also as planning, staffing, organising, controlling therefore he get
profit. When he uses lot of amount in one type therefor, he gets loss from business. There is
also a recruiting process in this case many stages for recruitment of employees and any
wrong step the get huge loss.

18-08-
Schumpeter- 2020 Innovation
Drucker- Risk
Walker-Determination, Skills, and capability
ABHIJIT PRASAD 2
3 08-08-2020

19-08-
Traits of Entrepreneur-

1. Independence- This is
2020 the most common
determination of all entrepreneurs. They want to seize control of their future; thus, they
decide to become their own boss instead of labouring under the gaze of a master.
2. Determination- the world of entrepreneurship is thought with both success and failure. An
important quality of a successful entrepreneur is the determination to continue pursuing a
goal despite some setbacks and obstacles they may encounter on the road.
3. Self-confidence – Along With independences, an entrepreneur possesses self-confidence. They
believe in their capabilities and makes sure that they will pit in their best effort into their endeavours
and likewise expect the best result from it.
4. Creativity- In the business world you cannot afford to be complacent (satisfied) and uncreative unless
you want the competition to move up on ahead of you.
5. Innovator
6. Hard work
7. Communication skill
8. Decision making ability
9. Visionary
10. Desire of high achievement
11. Goal orientation

Misconception about entrepreneur-

1. Entrepreneurs are born and Entrepreneur is hereditary (which means DNA of
entrepreneur from generation)
2. Entrepreneur are profit hungry and exploit labour
3. Entrepreneur is dishonest
4. Entrepreneur are favoured by luck
5. Only rich people can become entrepreneur.
6. Entrepreneur is a monopoly by a certain community.

Difference between entrepreneur and manager

Entrepreneur
The main motive of an entrepreneur is to start
a venture by setting up an enterprise. He
understands the venture for his personal
gratification.
An entrepreneur is the owner of the enterprise.
An entrepreneur being the owner of the
enterprise assumes all risk and uncertainty
involved in running the enterprise.
The reward an entrepreneur gets for bearing
risk involved in the enterprise is profit, which is
Manager
But the main motive of a manger is to render
his service in an enterprise already set up by
someone else.
A manager is the servant in the enterprise
owned by the entrepreneur.
A manger as a servant does not bear any risk
involved in the enterprise.
A manager gets salary as reward for the service
rendered by him in the enterprise. Salary of a

ABHIJIT PRASAD 3
4 08-08-2020
highly uncertain.
Entrepreneur himself thinks over what and how
to produce goods to meet the changing
demands of the customers. Hence, he acts as
an innovator also called a change- agent.
An entrepreneur needs to possess qualities and
qualifications like high achievement motive,
originality in thinking, foresight, risk- bearing
ability and so on.
ENTREPRENEURIAL MOTIVATION
manager is certain and fixed.
But what a manager does is simply to execute
the plans prepared by the entrepreneur. Thus,
a manger simply translates the entrepreneur’s
ideas into practice.
On the contrary, a manger needs to possess
distinct qualifications in terms of sound
knowledge in management theory and practice.
ABHIJIT PRASAD 4
5 08-08-2020

Introduction to motivation-
Motivation may be defined as the process that motivates a person into action and induces him to
continue the course of action for the achievement of goals.

Dalton E. McFarland – Motivation refers to the ways in which urges, derives, desires, striving,
aspirations or needs direct, contract or explain the behaviour of human beings.

Motivating Factor for Entrepreneurs-

1. Factor internal to the Entrepreneur
i) Strong desire to do something independent in life.
ii) Technical knowledge or/and manufacturing experiences.
iii) Business experience in the same or related line.
2. Factor external to the Entrepreneur
i) Financial assistance from institution sources.
ii) Accommodation in industrial estates.
iii) Machinery on hire purchase
iv) Attitude of the govt to help new units.
v) Financial assistance from non-govt source
vi) Encouragement from big business
vii) Heavy demand
viii) Profit margin
ix) Unsound units at a cheap price

Other external factors

1) Ambition factor-
i) To make money
ii) To continue family business
iii) To secure self- employment/ independent living.
iv) To fulfil desire of self/wife/parent
v) To gain social prestige
vi) Other ambition- making of a decent living, self – employment of children.
2) Compelling factor
a) Unemployment
b) Dissatisfaction with the job so far held or occupation pursued.
c) Make use of idles funds.
d) Make use of technical/ professional skills.
e) Other- Maintenance of large families, revival of sick units started by father, etc.
3) Facilities factor
a) Success stories of entrepreneurs.
b) Previous association.
c) Previous employment is the same or the line of activity.
d) Property inherited/ self-acquired/wives.
e) Advice or influence of family members/ relatives/friends.
f) Other- association as apprentice and sleeping partner.

ABHIJIT PRASAD 5
6 08-08-2020

Maslow’s Need Hierarchy Theory- Need or the desire is a very important element in motivation
because the employees get motivated only for their needs and if the needs are fulfilled completely
then it is not possible to motivate the employees. Maslow has given a sequence or hierarchy of
needs in the following ways:

1. Physiological Needs- (Food, Shelter and Clothing)

2. Safety and security needs- ((illness, accident) Physical facilities, (Income)Economic security.
3. Social Needs Affiliation/Belonging need- (love, affection, friendship)
4. Esteem Needs- (non-monetary incentives)
5. Self-actualisation needs- aim of your life.

FACTOR AFFECT ENTRENURSHIP-

1) Economic factor-
a) Capital
b) Labour
c) Raw material
d) Market-
2) Social factor-
a) Entrepreneur legitimacy-
b) Social mobility-
c) Social marginality
d) Security
3) Physiological factor
a) Motivation for high achievement-
b) Status respect
i) Social group displaced from the origin.
ii) Values of social groups may be disrespected.
iii) Status respect inconsistency.
iv) Migration into new society.

Withdrawal of social respect gives rise to following situations:

i) To get an identify, individuals work hard and remain different through his business.
ii) To survive in such society, adopt a new way of adaptive life.
4) Govt subsidies and incentives
5) Other factor-
a) Infrastructure

WOMEN ENTREPRENURE

ABHIJIT PRASAD 6
7 08-08-2020

GOVT-“an enterprise owned and controlled by a woman having a minimum financial interest of 51% of the
capital and giving at least 51% of the employment generated in the enterprise to women".

FEATURE-

1) Risk taker
2) Generate women employment
3) Goal organiser
4) Creative
5) Hard work
6) Visionary
7) Foresight

Problems of women entrepreneur-

1. Scarcity of resources
2. Less risk bearer
3. Problem in finance
4. Family responsibility
5. Lack of education
6. Male dominant in society

RURAL ENTERPRENUR

“Rural Entrepreneurship can be defined as entrepreneurship rising at village level which can take
place in a variety of fields of venture such as business, industry, agriculture and acts as a powerful
reason for economic development”.

Village industries have been grouped into seven categories as follows:

 Mineral-Based Industry: e.g stone crushing, cement industries, red oxide making, wall coating
powders etc.
 Forest-Based Industry: e.g wood products, bamboo products, honey, coir industry, making
eating plates from leaves.
 Agro-Based and Food-Based Industry: e.g sugar industries, jaggery, oil processing from oil
seeds, pickles, fruit juice, spices, dairy products etc
 Polymer and chemical-Based Industries: e.g manufacturing of aloevera gel, ball pen ink,
aggarbatti.
 Engineering and non-conventional energy-based Industries: e.g agriculture equipments.
 Textile Industry: e.g spinning, weaving, colouring, bleaching.
 Service Industry: e.g tractors and pumpsets repairs etc.
Types of Rural Entrepreneurship: a. Individual entrepreneurship b. Group entrepreneurship c.
Cluster formation d. Cooperative

a. Individual entrepreneurship: It is the type of the entrepreneurship where the single entrepreneur
is the owner or the sole proprietor. The entrepreneur bears the whole risk and is solely responsible
for the business decisions.

b. Group Entrepreneurship: It is mainly classified into three types: 1) Private limited company 2)
Public limited company 3) Partnership

1) Private limited company: In this case, minimum two members are required and maximum
members are 50. The financial capital is divided into shares and shares are not sold to the general

ABHIJIT PRASAD 7
8 08-08-2020

public. Therefore, such companies are generally small in size and are owned by the families. Liability
of the shareholders is limited in such companies.

2) Public limited companies: in such companies, minimum seven members are required and there is
no maximum limit. Being a public limited, it can raise money from the general public. There is
separation between the control and ownership. Shareholders are the owners but they do not take
active participation in the running of the business. The control of the business is in the hands of the
board of directors.

3) Partnership: In this case there is no individual owner and the business is handled by the partners
(maximum 20). For the partnership, mutual trust is must and all the partners should complement
each other for common goals and objectives. Partnership companies are easier to form and provide
large resources but it has unlimited liability on the partners.

c. Cluster formation: It is a formal and informal group of people to achieve common objectives. It
includes NGO‟s, VO‟s, SHG‟s & CBO‟s.

1) NGO’s (Non-Government organisations): These are the non – profit organisations sponsored or
formed by the government and are registered under the Society’s Registration act, 1860. A minimum
seven people are grouped together for the socio- economic growth of the people. These are the
formal organisations and usually receive funds from the government.

2) VO’s (Voluntary Organisations): These are the organisations generally initiated by the individuals
to serve the society and for the socio-economic development of the people. These organisations
may or may not register under any act. Such organisations are generally sponsored by the NGO‟s or
the Government.

3) SHG’s (Self Help Groups): These groups are mainly consisted of 10-20 people and are formed with
the objective to mutually help each other. These groups are sponsored by the NGO‟s, VO‟s and
sometimes by the Government for the socio – economic development of the backward people. It is
an informal organisation.

4) CBO’s (Community based organisations): They are informal in nature and are formed with the
objective to enhance the bargaining power of the community. People from the common living are or
from the common community come together with the common objective of upliftment of the
community.

d. Cooperative: According to the International cooperative alliance (ICA), “a cooperative is an

autonomous association of persons united voluntarily to meet their economic, social and cultural
needs and aspirations through a jointly owned and democratically controlled enterprise.”

4. Need of Rural Entrepreneurship: There is a need of the rural entrepreneurship to develop the
rural economy. Rural entrepreneurship is needed because of the following reasons:

 Employment Generation: Rural Entrepreneurship is a labour intensive and requires large

number of human resource. Therefore, it has a large potential of employment generation
and can reduce the problem of unemployment in rural area.
 Income Generation: By providing employment, rural entrepreneurship has potential for
income generation and thus bridging the gap between the rural and urban disparities.
 Rural development: Rural entrepreneurship helps in setting industries in rural areas and thus
leads to the employment generation and income generation which directly help in rural
development.

ABHIJIT PRASAD 8
9 08-08-2020

 Curbs Rural – Urban migration: Rural development helps in curbing the rural – urban
migration by reducing the unequal growth in cities.
 Environment Friendly: Rural industries are more environment friendly thus leads to the
development without damage.
 Builds up Village republics: Development of the rural industries serves as an effective means
to build village republics and thus make them more independent.
 Improved standard of living: As rural entrepreneurship helps in income generation which
helps in prospering the community and thus improving their standard of living.
 Balanced regional growth: Rural entrepreneurship will direct the concentration of industries
in rural areas which leads to the balanced regional growth.
5. Scope of rural entrepreneurship: Rural entrepreneurship is active and is opening new scopes
for the entrepreneurs and are discussed as follows:

• Rural area has the capacity of small and medium enterprises and these sectors acts as the
economy builders by generating Employment and income for poor and unemployed people and is
contributing more than 52% of the GDP.

• Moreover, there is a rapid expansion in the small and medium industry arena. Therefore, Repair
shops, service centers, PCO, internet café, hiring of agriculture implements & tractor, computer and
other skill training centers have good scope in cluster of villages.

• Entertainment, cable TV ,rural tourism and amusement parks (near urban areas) are also some of
the potential areas for rural entrepreneurs in service sector

• Various development programs are being executed through Panchayti Raj Institutions, who are
engaging contractors for civil /mechanical works. Rural youth can start this business.

• Changed consumption pattern has opened up new avenues for trading activities in rural areas.

• Rural areas are also using large amount of agriculture products like fertilizers, seeds, pesticides and
insecticides etc.

6) Problems faced in the growth of rural entrepreneurs: Rural entrepreneurs face large number of
problems like illiteracy, risk factor, improper training and experience, limited purchasing power
and tough competition from urban entrepreneurs. Various problems faced by rural
entrepreneurs are following.
i) Scarcity of funds: Rural entrepreneurs find it difficult to get external funds due to the risk
involved in the rural industries. Moreover, the procedure to avail loan facility is too long
and cumbersome that its postponement often disappoints the rural entrepreneurs.
ii) Competition: Rural entrepreneurs face tough competition from large scale industries
and the urban entrepreneurs as their cost of production is high due to high input cost.
iii) Middlemen: As there is small market available for the rural entrepreneurs so they are
heavily dependent on the middlemen for marketing of their products and thus
Middlemen exploit rural entrepreneurs.
iv) Legal formalities: As Rural entrepreneurs are illiterate and ignorant so they find it
extremely difficult to comply with various legal formalities in obtaining licenses.
Moreover, the legal formalities are so complex and time consuming that it become
tough for the entrepreneurs.
v) Procurement of raw materials: Arranging raw material is really a tough task for rural
entrepreneur. They may finish with poor quality raw materials and can also face the
problem of storage and warehousing.

ABHIJIT PRASAD 9
10 08-08-2020

vi) Risk element: Rural entrepreneurs face tough competition from large scale industries
and do not have large market available for them. Therefore, have much less risk taking
capacity due to shortage of financial resources and external support.
vii) Lack of technical knowledge: Rural entrepreneurs suffer a problem of lack of technical
knowledge because rural people are illiterate and lack of training facilities which acts as
hurdle for the rural development.
viii) Lack of infrastructural facilities: Though government is putting its best efforts but the
growth of the rural entrepreneurs is not very healthy due to lack of proper and adequate
infrastructural facilities.
ix) Poor quality of products: Rural entrepreneurs produce inferior quality of products due to
lack of availability of standard tools and equipment and the availability of poor quality
raw materials.
x) Negative attitude: The environment in the family and society is not favorable to support
rural people to take up entrepreneurship as a career. It may be due to lack of awareness
and knowledge of entrepreneurial opportunities.

7. Advantages of Rural entrepreneurship:

 Abundance of Resources: Rural areas have abundant natural resources including land, water
minerals and solar power and also wind power. Moreover land is easily available at cheap
rates.
 Easy availability of labour: Semi skilled and unskilled labour is easily available and low wage
rates increases the vulnerability of rural areas for industrialization.
 Tax advantage: Tax burden in rural areas is low, which increases competitive strength of
rural industry.
 Low investment: Rural industries can be started with low investment and Production can be
done at a less cost due to easy availability of resources.
 Employment: Rural Industries generate jobs in the developing countries like India where the
unemployment is the main problem.  Slow down urban migration: As rural industries create
jobs, therefore it slows down the rural - urban migration which creates problems in urban
areas.

SOCIAL
Meet
ENTERPR demands: in developing countries like India,
where
ENUR the population is extremely large, rural
industries can help in meeting demands arising
from local consumption needs.
Types of Social Entrepreneurship: Following are the types of social entrepreneurship: 1. The
Leveraged Non-Profit: This business paradigm leverages resources in order to give solutions
to social needs. Leveraged non-profits make creative use of existing funds to fulfill the
needs. These leveraged non-profits are long-established ways of dealing with the problems,
but are renowned by their creative approaches. 2. The Hybrid Non-Profit: This organizational
pattern can be of different forms, but is distinguished because the hybrid non-profit is ready
to use profit to continue its operations. Hybrid non-profits are often formed to deal with
government or market failures, as they create profits to continue the operation other than
of loans, grants, and other forms of traditional funding. 3. The Social Business Venture:
1
ABHIJIT PRASAD
0
11 08-08-2020

These paradigms are set up as enterprises planned to bring change through social means.
Social business enterprises developed through a short of funding—social entrepreneurs in
this situation were forced to become for-profit enterprises.
4. Elements of Social Enterprise Three core elements:
 It is built to provide benefits for a community.
 It helps in creating opportunities so that people can help themselves and the others.
 It makes use of the best commercial business practices to ensure its existence i.e. the
business will naturally maintain and support environmental sustainability as well as ethical
considerations.
5. Functions of Social Entrepreneurship
 It helps in creating a stable level of employment opportunities.
 It helps in creating jobs and provides support to economically weaker groups.
 It helps in development of the entrepreneurial skills.
 Social Entrepreneurs build social innovation and bring change in different areas, including
education, health, environment and business development.
 It helps in reducing poverty in the country.
6. Difference between Social & Business Entrepreneurship
 Commercial Entrepreneurship represents the recognition, growth, and utilization of
opportunities that helps in generating Profits.
Social Entrepreneurship refers to the recognition, growth, and utilization of opportunities
that helps in bringing change in the society.
 Commercial Entrepreneur may bring change in the society but the main purpose is to earn
profits. Social Entrepreneur may generate profits but the main aim is to bring change in the
society and work for the social well being.
 Another important difference between the Social and the Commercial Entrepreneur is in
the meaning of wealth creation.
For the Commercial Entrepreneur, ‗wealth‘ is same as profit. For the Social Entrepreneur,
however, wealth also includes formation of the social and environmental capital. 7. Social
entrepreneurs Social entrepreneurs are the one who question the traditional methods and
combines visionary and real world problem solving creativity to break the path with the
powerful ideas. They help in combining local practicality with the professional skills. They
see the opportunities where there are unvalued resources and unemployable people. There
prime objective is to bring change in the society and for that they may use market
mechanisms and thus helps in reducing the various social problems by abolishing poverty
and bringing employment opportunities. 8. The Characteristics of a Social Entrepreneur are:
 Uses a creative approach to resolve social issues.
 Transforms society by bringing change.
 Is not confined by society norms or traditions.
 Is not bound by barriers that exist in the path of their goals.
 Expands new paradigms and finds new methods to facilitate them to overcome obstacles.
9. Where do you find social enterprises? Social entrepreneurs are found mainly in economic
sectors. The expansion areas for social enterprises are recognized as:
 Housing
 Information services
 Financial services
 Training and business development
 Environmental
1
ABHIJIT PRASAD
1
12 08-08-2020

 Manufacturing
 Public services
 Food and agriculture
 Health and care
8.1 Typical sectors of investment of social enterprises Affordable Healthcare: The affordable
healthcare sector in India is at a budding stage. Affordable healthcare providers bring down
the cost of service delivery through innovative operating models. In India, more than 60 per
cent of the population is in villages and small towns while 70 per cent of medium-to-large
hospitals are located in metros and large towns. In addition, 80 per cent of the demand is for
primary or secondary care and only 30 per cent of hospitals provide these. Thus availability
and affordability remain a key concern in healthcare coverage. Affordable housing: There is a
large gap in the urban housing market and it is impossible for the economically weaker
section to afford proper housing. So, affordable housing developers‘ helps in building
affordable housing by minimizing the construction cost and completion time by creating
innovative methods as a part of social entrepreneurship in India. Water and Sanitation:
Water sector can mainly be divided into three areas: water harvesting and storage, water
supply and distribution, and piping and waste management. Social entrepreneurs are usually
concerned with point-of-use filtration, rain-water harvesting, community water treatment,
and small-scale water networks. Usual working models for sanitation management are
household toilets, pay-and-use community toilets and ‗ecosan‘ toilets where toilet waste is
used to create biofuel. Agriculture: Agriculture and allied activities are the chief occupation
in rural India and provide income to more than 70 per cent of the rural population in India.
Social enterprises working in this sector make profitable and social value by removing
inefficiencies from the existing value chains. These enterprises are mostly categorized as:
those sustaining the value chain pre-harvest or post-harvest market links as well as those
occupied in the dairy production and market linkage.
Energy: Social entrepreneurs help in giving access to environmentally friendly and
inexpensive energy. They try to improve the standard of living and living conditions of the
rural population andthus provide best possible energy sources to the rural households. Roof-
top solar lighting and low smoke cook stoves are some of the projects in this field.
Education: It is projected that 4 per cent of children never start school, 58 per cent do not
complete primary school education because of reasons varying from insufficient
infrastructure to lack of motivation, and poverty. Social enterprises plays a key role in
providing education to the under privileged and economically weak children. They work
around these challenges through sponsorship and capability enhancing solutions. These
enterprises furnish from early childhood to adulthood and are present in formats such as
pre-schools and after-school classes, e-learning and vocational and skill development
institutes. Livelihood promotion: Social entrepreneurs are generally classified into two
categories: individuals that encourage living and those that assist in skill development. In
majority of livelihood ventures, the producers or artisans hold greater part of the ownership.
Entrepreneurs in the skill development sector are mostly structured as for-profit entities, but
with low or subsidised or free education to the beneficiary. Financial Inclusion: There is a
large need of micro finance in the country and only 10% of the micro finance needs are met
by the micro finance institutions which act as financial intermediary to serve the
economically weaker section of the society. So to meet the social needs RBI has developed a
Self Help Group Linkage Program to promote financial dealings between commercial banks
and self-help groups (SHGs). 10. Challenges for Social Entrepreneurship Social entrepreneurs
1
ABHIJIT PRASAD
2
13 08-08-2020

face many challenges in India which hamper the entrance of new entrepreneurs in India.
Following are the challenges faced by the social entrepreneurs:
 Lack of Education in Entrepreneurship: Education is the important source of encouraging
entrepreneurship in India but the Indian education system is still works on the traditional
lines. It still lacks a specific curriculum for promotion of entrepreneurship and is restricted
only to the few business schools and that too lack in promoting social entrepreneurship. Due
to the gap in the education system, India is still struggling in the entrepreneurship sector and
therefore is major challenge for social entrepreneurship.
 Lack of skilled manpower: Social Entrepreneurs requires different types of the skilled
manpower for the achievement of the organizational goals but to fulfill the mission of social
entrepreneurship, owners have to hire the individuals from the deprived sector of the
country who are unskilled. So, entrepreneurs have to incur extra costs for their trainings and
therefore pose a challenge for the social entrepreneurship.
 Lack of Financial assistance: Lack of Financial resources is also one of the major challenge
for the social entrepreneurs as they start their business with their own money or from taking
loan from the local money lenders who lent at a very high interest rates. This is because
financial institutions do not easily provide loans to the social entrepreneurs due to the high
risk factor.
 Social and Cultural effect: In India, people are not aware of the Social entrepreneurship
and this lack of knowledge sometimes becomes a challenge for the social entrepreneurs.
People are not able to find the difference between the profitable and non profitable
business and therefore, are doubtful about the activities of social entrepreneurs.
 Comparative disadvantages to business: The social entrepreneurs work for the welfare of
the society and thus find the low cost solutions to the societal problems by investing their
own money and when they start earning profits then new entrepreneurs peep in and create
competition in the market.
 Lack of Government support: Government does not take much initiative to support social
entrepreneurs. The Government policies for the entrepreneurs are very strict and complex
which at the times proved to a challenge for the social entrepreneurship.
11. Social Entrepreneurship in India Social entrepreneurs are individuals or groups of people
or organisations that provide time and solutions to reduce the society‘s millions of problems
and long existing issues that stay unsettled by the institutional and government sector. As in
other countries, in India too, social entrepreneurs are a emerging occurrence bringing
positive alteration to several social areas ranging from education to healthcare, renewable
energy, waste management, e-learning and e-business, housing and slum development,
water and sanitation, violence against women, other issues related to women, children and
the elderly etc. The main aim of these Social enterprises is to bring in sustainable and noble
living to the under privileged and the marginalized citizens of India. 10.1 Role of government
in the social entrepreneurship landscape The Government has started many public-private
partnerships in the important development sectors. The National Innovation Council, in joint
ventur*e with the Ministry of Micro, Small and Medium Enterprises (MSME) has begin the
India Inclusive Innovation Fund (IIIF), an impact investment fund with a amount on Rs. 5,000
crore that will invest in enterprises catering to the country's economically weaker sections.
10.2 Budget 2014 initiatives
 In order to build an encouraging eco-system for venture capital in the MSME sector, it is
planned to set up a Rs. 10,000 crore fund for drawing private capital by way of providing
equity, quasi equity, soft loans and other risk capital for start-up companies
1
ABHIJIT PRASAD
3
14 08-08-2020

 Scheme to allocate Rs. 200 crore to encourage innovation, entrepreneurship and agro-
industry
 Suggestion to set-up a Start Up Village Entrepreneurship Programme ‘for encouraging rural
youth to start up local entrepreneurship programmes and offering an initial sum of Rs. 100
crores for this.

N-Achievement- This theory is given by David McClelland for development of enterprise and
motivate to entrepreneur. Some of the recognized causes oh high achievement –

1. Motivate given by the parents to the children.

2. Hard work is giving opportunity for reach the achievement.
3. Positive attitude gives lead to success or n-achievement.
4. Success should be recognising by the financial incentive or non-financial incentives.

Search of business idea – Business opportunity may be defined as an attractive project idea which an
entrepreneur accepts as the basis for his investment decision. Two major ingredients for business
development.

1. Growing market
2. Return on investment.

The entrepreneur has to prepare a list of project ideas identification from various sources.

The following are the criteria for evolution-

1. Growing market
2. Risk
3. Govt regulation
4. Raw material

Source of information-

Main source idea-

1. Hobbies
2. Work experience
3. External Environment –
i) Environment scanning
ii) Brainstorming – group discussion on withholding criticism. And discuss about
development of organisation. Idea generating process.
iii) Focus group-
iv) Creative and creative problem solving
v) Delphi technique

Criteria for selecting a particular business opportunity- Following the identification of an

opportunity, by any means, whether through inputs received from technical people, channel,
members, business associates, or consumer, careful screening and evaluation of it are required.

1. Investment size
2. Location
3. Technology
4. Equipment

1
ABHIJIT PRASAD
4
15 08-08-2020

5. Marketing

Business opportunity in various society-

1. Textile
2. Software
3. Packaging
4. Biotechnology
5. Engineered product
6. Automobile
7. Ayurveda
8. Healthcare
9. Media
10. Floriculture

Business plan – Business plan refers to you are failing to planning, you are planning to fail. According
to Tariq sidiki

Advantages of business plan-

1) Encourage individual to take into consideration all the aspect of business.

2) Helps in obtaining the opinion of trusted experienced external advisor on initial plan.
3) Help in formulating a proposed budget, as it involves proper financial forecasting.
4) Helps in obtaining statutory permissions/approval for starting a business.
5) Forms an important document for creditor and investor as they would always refers the business
plan before investing.
a) Capital
b) Capacity- financial budget is sufficient
c) Collateral-security provider
d) Character- trustworthiness
e) Conditions – British stablish in Kerala, iimK

Nature and scope of business plan-

A well-prepared business plan helps in gaining the trust of suppliers and various other parties and
securing favourable credit terms. It refers the vision future plan of the enterprise and product and
services offered by it.

Feature of a successful business plan-

1. Containing an executive summary, a table of contents, and chapter in the right order.
2. Exhibiting the right appearance and the right length not too long and not too short.
3. Provide a clear idea of what the founder and the enterprise expect to accomplish in the
future.
4. Provide detail of product and cost of product.
5. Explain the benefit of product and services
6. Provide what is better than competitor
7. Containing realistic financial projection
8. Providing a well organised oral presentation.

Writing a Business plan

1
ABHIJIT PRASAD
5
16 08-08-2020

Element of business plan

1. Market plan
2. Financial plan
3. Table content
4. Title
5. Summary
6. Description of business
7. Contingent plan

Definition of MSMEs

As per MSME development Act,2006 following are the classification of MSMEs on the basis of their
investment in plant and machinery and equipment:

Manufacturing sector-

Micro enterprise: An enterprise is classified as micro enterprise, RS25 lakhs.

Small enterprise: Rs 25lakh to Rs 5 crore.

Medium enterprise- Rs 5 crore to 10 crores.

Service sector-

Micro enterprise: Rs 10lakh

Small enterprises- Rs 10 lakh to Rs 2 crore.

Medium enterprise- Rs 2 crore but less than Rs 5 crore.

Policy Initiatives by Govt of India for MSMEs

MSMEs which play partial role in the economic development have been plagued with number of
problems and challenges. Majorities of enterprises under MSMEs are tiny and micro enterprises and
these enterprises face problems of labour, credit, shortage of market, low remunerative price, etc.
Poor quality and low standard of the product are another weak area apart from various threat posed
by policies of liberalisation and globalisation. Some are the major policies and reform are as follows:

MSME Development Act 2006- Through the need of all three were same but they did not get
appropriate attention from the policy maker. In order to promote, to enhance competitiveness, to
provide market and to integrate these three tiers of enterprises, MSMEs Development Act 2006 was
enacted. Came in effect on 2 October 2006.

Objective of the act: Promotion and development of MSMEs

The importance feature of MSME act are as follow:

1. The term enterprise was suggested to be used in place of the term industry.
2. Definition of MSME in manufacturing and service categories on the basis of investment in
plant and machinery and equipment.
3. Providing the credit support for prospective entrepreneurs through various credit schemes.
4. Treatment of each categories of enterprise on the basis of their requirement.

1
ABHIJIT PRASAD
6
17 08-08-2020

National board for MSME- Under MSME development Act 2006 it was suggested to constitute a
national board for MSME.

Function-

1. Critically reviews the various policies and programmes of the govt.

2. Examine the various factors which hinder the promotion and development of MSMEs.
3. Suggested the measures which can lead the promotion and development of these enterprise
along with enhancing their competitiveness.
4. Provides suggestions to the central govt to use the fund or different funds which are
constituted under 12 of MSME at 2006

Reservation of products- To provide assured market for the product produced by the MSME
enterprises and to counter the challenges and competition offered by the process of liberalization
and globalisation framed the policy for reservation of products which are exclusively manufactured
by MSMEs. The policy of reservation of product for MSME sector started in 1967. The main
consideration behind this policy was to counter the challenges of regional industry imbalances,
employment generation through self-employment venture, etc.

National manufacturing competitiveness programme (NMCP)- the eight components under NMCP,
which are given below-

1. Building awareness on Intellectual Property right.

2. National Programme for Application of Lean manufacturing (LEAN)
3. Technology Upgradation and Quality Certification support to SMEs.
4. Promotion of ICT in Indian Manufacturing sector (ICT)

Prime Minister’s Task force on MSME

The govt of India constituted a Prime minister’s Task force on MSME on 2 September 2009, which
subsequently submitted its report on 30 th January 2010. The task force makes for solve problem
raised by various association and other stakeholder involves in these enterprises. The report made
recommendation related to policy/programme support, institutional matter and legal measures for
the growth of MSME in the country. The areas on which recommendation were made includes
credit, market, labour issues, exit policy, taxation and special measures for North- Eastern region and
Jammu and Kashmir.

Rajiv Gandhi UdyamiMitra Yojana- 2008, this scheme gives financial assistance is provided to select
legal agencies. This scheme provides assistance and support to the first generation entrepreneur.

Public Procurement policy- 1 April 2012, In order to provide further leverage to MSEsrun by SC/ST
people, under the above policy out of 20% target of annual procurement from MSEs, a sub-target of
4% is earmarked for procurement from MSEs owned by Scheduled Caste (SC)/ Scheduled Tribe (ST)
entrepreneurs.

Credit Generated fund scheme- 30 April 2000

Qualoty Upgradation- MSME are often criticized for not having good quality product, this is one of
the main obstacle for the market of the product. Realising the given facts and to give boost to quality

1
ABHIJIT PRASAD
7
18 08-08-2020

improvement and for technology up gradation, govt launched a scheme to provide incentives to
those enterprises which have acquired ISO 9000/ISO 14001/HACCP certification.

Credit linked capital subsidy scheme-

SMALL SCALE INDUSTRY

Small enterprises are those in which the management lies in the hands of one or two people who
are responsible for the major discussion.

Characteristics and significance of small-scale enterprises-

1. Labour incentive
2. Flexibility
3. Innovation
4. Decentralisation
5. Outlet of entrepreneurial spirit

Roles of SSEs-

1. Employment generation
2. Poverty alleviation
3. High productivity
4. Better utilisation of local resources.
5. Tapping of saving
6. Regional development
7. Contribution to decentralisation

Factor influence small scale industry

1. Socio culture factor

2. Economic factor
3. Technology factor
4. Political factor

SMALL SCALE INDUSTRIES BOARD- in 1954, apex body for the growth of SSE. The board is
reconstituted after every two year. The board operates mainly in the following areas-

 Policies and programs for SSEs

 Credit facilities, taxation, and modernisation of enterprises under the small-scale sector.
 Development of enterprises in backward and needly regions
 Ancillary growth quality improvement, and market assistance for SSEs

Khadi and Village industries commission-passed by parliament Act, April 1957. Following are some of
the objectives of KVIC-

1
ABHIJIT PRASAD
8
19 08-08-2020

 Promoting and developing khadi and village industries. establishing quality standard
 Helping in elimination various social problems.
 Creating self-reliance among people and building up of a strong rural community spirit.
 Providing opportunity to the rural population to undertake creative and productive activity.

The functions of KVIC are as follows-

 Establishing quality standard and ensuring that products and village industry adhere to the
set standard.
 Maintaining reserve of raw material and distributing them to individuals engaged or likely to
be engaged in production of khadi or village industry in India.
 Organisation and planning training of individuals employed or seeking employment khadi
and village industry in the country.
 Issuing certificate or letter of recognition to industry meeting quality standard.
 Helping marketing and production of khadi goods or products manufactured by village
industry.
 Encouraging research in the technology used in khadi and village industry.

Micro, Small, and Medium enterprises development organisation-1954, it operates 60 offices and 21
autonomous bodies including training institution, tool rooms and project- cum-process development
centre. The main services rendered by MSME-DO are as under-

 Giving benefits for quality improvement, technology upgradation, modernisation, and

infrastructural development.
 Giving advice to the government for the formulation of policies for the development and
promotion of SSEs.
 Providing managerial consultancy, techno-economic and common facilities, and extension
services to SSEs.
 Maintaining human resources development through skill Upgradation and training
technique.
 Giving eco nomic information services.

National Small Industries Corporation Limited (NSIC)- 1955, NSIC is an ISO 9001 certified institution.
120 offices, more than 500 professionals spread across the country.

In over five decades NSIC has proved its worth within the century and abroad through its following
contributions:

 Promoting technology upgradation and modernisation and quality consciousness.

 Strengthening linkage between large and medium enterprises.
 Increasing export products from SSEs.

Services-

 Advising on application of new techniques.

 Providing facility for material testing through accredited laboratories.
 Giving energy and environment services at selected centres.
 Providing facility for classroom and practical training for skill upgradation.

The area of consultancy is:

1
ABHIJIT PRASAD
9
20 08-08-2020

 Capacity building
 Policy and institutional framework.
 Entrepreneurship development
 Business development services.

National Institute for entrepreneurship and small business development (NIESBUD)- formed by
MSME 1983.

Objectives-

 Formulate scientific selection procedure.

 Evolution quality and standard materials and process for recruitment, training, support and
sustenance of entrepreneurs in the country.
 Formation of training aids, manual, and tools.
 Maintaining and creating environment suitable for the emergence of entrepreneurship.
 Organising training programs for promoters training as well as for the entrepreneurs.
 Experiencing the international exposure and expertise in entrepreneurship development.
 Enhancing research and exchange globally in development and growth of entrepreneurship
in the country.

Indian Institute of entrepreneurship- 1993 at Guwahati in assam by MSME.

Following are some activity of IIE-

 Organising and conducting training for entrepreneurship development

 Creating strategies and methodologies for different target groups and locations, and
conducting field test and proper implementation of these strategies.
 Identification need of training and suggesting training programmers to non-govt
organisation as well as to the govt organisation engaged in promoting and supporting
entrepreneurship in India.
 Disseminating information needed for policy formulation and implementation and
documenting related to self-employment.
 Designing, identifying and conducting training programs for existing entrepreneurs for their
development.
 Publishing and preparing literature related to entrepreneurship and industrial development.
 Doing research for generating knowledge to accelerate the process of entrepreneurship
development.
 Behaving as a catalyst for development of self-employment/entrepreneurship,
industry/business.
 Preparing, evolving, designing and helping in the utilization of various media for creating
entrepreneurship development.

SIDCs, established under the Companies Act, 1956, work for the promotion and development of
SSEs. These corporations are also engaged in developing industrial infrastructure, such as industrial
estates and industrial parks as well as establishing industrial projects in various states. This helps
prospective entrepreneurs in establishing enterprises. SIDCs provide technical and financial
assistance to industrial units.

The major activities of SIDCs are as under:

2
ABHIJIT PRASAD
0
21 08-08-2020

 For the subscription of shares and debentures of enterprises for financial help.

 Giving term finance to all small, medium and large enterprises.

 Conducting feasibility studies and encouraging private entrepreneurs to establish their own
enterprises in the state.

 Encouraging entrepreneurs by implementing scheme of Industrial Development Bank of India.

 Formation of industrial ventures in joint and assisted sector by collaborating with private
entrepreneurs in the country.

State directorate of industries

SDIs are set up in each state policies and programs in SSEs. The main activities of SDIs are as follows:

 Registering SSEs
 Granting certificates for import of raw material
 Providing financial assistance
 Distributing scarce raw material to SSEs
 Establishing industrial estates and industrial co-operatives
 Developing industrial infrastructure.
 Managing village and small enterprises
 Retaining connection with other agencies for development of enterprises.

District Industry Centers – 1978 for promoting SSEs in rural areas and small towns. The activities of
DICs are as follows-

 Conducting surveys to assess industrial potential of a district.

 Preparing an action plan for industrial development
 Evaluation investment proposals received from entrepreneurs
 Organising training programs for artisans
 Giving self-employment to educated unemployed youth
 Guiding entrepreneurs in procuring machinery, equipment, and raw material.

Industrial associations

Apart from central and state govt. agencies, there are several industry associations that provide
institutional support to SSEs. It supports small enterprises by giving them with a platform to rise
industry related issues and promote their activities.

 Federation of Indian chambers of commerce and industry

FICCI, in 1927, is an industry and trade network of India, which is closely attached with the central
and state govt. for making different policies related to SSEs. It works with govt. for increasing
efficiency, competitiveness and global opportunities for SSEs by providing specialised services.

 PHD chamber of commerce and industry

PHDCCI, established in 1905 is a proactive multi-state apex organisation. It plays a crucial role in the
promotion of entrepreneurship, industry and trade. PHDCCI launched small industry and business
help line in1955 to support the small-scale sector.

2
ABHIJIT PRASAD
1
22 08-08-2020

 World Association for small and medium enterprises- 1980

WASME is a global, non-profit organisation serving MSMEs.

1. Information the promotion of SMEs in member countries

2. Marketing the products of SMEs
3. Identifying the facilities for training entrepreneurs
4. Maintaining contacts with sources providing technology and equipment for SMEs
 Indian council of small industry-1979

ICSI aims at extending assistances tot eh small and cottage enterprises the further leads to the
overall growth of the economy. It represents around 1500 association of decentralisation sector.

 Non-Government organisation – data bank to give the information, upbringing of the data of
manufacturing capacity, collect data which was produce in the large unit in SSEs,
organisation programs for promoting the products manufactured.

The potential drawback of entrepreneurship-

1. Uncertainty of income
2. Risk of losing invested capital
3. Long work and hard work
4. Lower quality of life until business is settled

HIGH LEVEL OF STRESS-

1. Complete responsibilities
2. Discouragement
3. Strategy

Product service Idea-

1. Industry
2. Entry wedge

Limitation of innovation-

1. Imitative strategy
2. Innovative strategy
3. Degree of similarity
4. Parallel competition
5. Pure innovation

Size of market-

1. Market
2. Scale
3. Scope
4. Mass
5. Niche

Customer types-

1. Corporate customers

2
ABHIJIT PRASAD
2
23 08-08-2020

2. Loyal customers
3. Local customers
4. Passionate customers

SWOT- Strength weakness opportunity threat

PAST START-UP STRATEGY

 Competitive advantage
 The particular way a firm implements customer benefits that keeps the firm ahead of other
firms in the industry or market.

 Resources
 Any asset, capability, organizational process, information, or knowledge that contributes to the
firm‘s performance
 Tangible, Intangible
 Organizational capabilities

 abilities, skills, and competencies used by the firm to make profits from tangible and intangible
resources
 Transformational competencies
 firm can make its product or service better in value
 Combinational competencies
 combining tangible and intangible resources
 Valuable resource
 An asset, capability, organizational process, information, or knowledge that lets a firm take
advantage of opportunities or lock out competitors.
 Rare resource
 An asset, capability, organizational process, information, or knowledge that is not generally
available to competitors.

2
ABHIJIT PRASAD
3
24 08-08-2020

Small business undertaking

Potensial drawback of undertaking

Highlevel strees pre strategy

Industry lifecycle and – introduction , grow, mathurity and decline

SWOT-

Starting small industry

2
ABHIJIT PRASAD
4