UNIT I

Meaning

Types of Entrepreneurship

Concept of Entrepreneurship
Entrepreneurship is the ability and readiness to develop, organize and run a business enterprise,
along with any of its uncertainties in order to make a profit. The most prominent example of
entrepreneurship is the starting of new businesses.

In economics, entrepreneurship connected with land, labour, natural resources and capital can
generate a profit. The entrepreneurial vision is defined by discovery and risk-taking and is an
indispensable part of a nation’s capacity to succeed in an ever-changing and more competitive
global marketplace.

Meaning of Entrepreneur
The entrepreneur is defined as someone who has the ability and desire to establish, administer
and succeed in a startup venture along with risk entitled to it, to make profits. The best example
of entrepreneurship is the starting of a new business venture. The entrepreneurs are often known
as a source of new ideas or innovators, and bring new ideas in the market by replacing old with a
new invention.

It can be classified into small or home business to multinational companies. In economics, the
profits that an entrepreneur makes is with a combination of land, natural resources, labour and
capital.

In a nutshell, anyone who has the will and determination to start a new company and deals with
all the risks that go with it can become an Entrepreneur.

Also Refer: Top 8 Difference Between Businessman and Entrepreneur

What are the 4 Types of Entrepreneurship?

It is classified into the following types:

Small Business Entrepreneurship-

These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber,
electrician, etc. These people run or own their own business and hire family members or local
employee. For them, the profit would be able to feed their family and not making 100 million
business or taking over an industry. They fund their business by taking small business loans or
loans from friends and family.

Scalable Startup Entrepreneurship-

This start-up entrepreneur starts a business knowing that their vision can change the world. They
attract investors who think and encourage people who think out of the box. The research focuses
on a scalable business and experimental models, so, they hire the best and the brightest
employees. They require more venture capital to fuel and back their project or business.

Large Company Entrepreneurship-

These huge companies have defined life-cycle. Most of these companies grow and sustain by
offering new and innovative products that revolve around their main products. The change in
technology, customer preferences, new competition, etc., build pressure for large companies to
create an innovative product and sell it to the new set of customers in the new market. To cope
with the rapid technological changes, the existing organisations either buy innovation enterprises
or attempt to construct the product internally.

Social Entrepreneurship-

This type of entrepreneurship focuses on producing product and services that resolve social
needs and problems. Their only motto and goal is to work for society and not make any profits.

Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make
entrepreneurship successful. A few of them are mentioned below:

● Ability to take a risk- Starting any new venture involves a considerable amount of failure
risk. Therefore, an entrepreneur needs to be courageous and able to evaluate and take
risks, which is an essential part of being an entrepreneur.
● Innovation- It should be highly innovative to generate new ideas, start a company and
earn profits out of it. Change can be the launching of a new product that is new to the
market or a process that does the same thing but in a more efficient and economical
way.
● Visionary and Leadership quality- To be successful, the entrepreneur should have a clear
vision of his new venture. However, to turn the idea into reality, a lot of resources and
employees are required. Here, leadership quality is paramount because leaders impart
and guide their employees towards the right path of success.
● Open-Minded- In a business, every circumstance can be an opportunity and used for the
benefit of a company. For example, Paytm recognised the gravity of demonetization and
acknowledged the need for online transactions would be more, so it utilised the situation
and expanded massively during this time.
● Flexible- An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace change in a
product and service, as and when needed.
● Know your Product-A company owner should know the product offerings and also be
aware of the latest trend in the market. It is essential to know if the available product or
service meets the demands of the current market, or whether it is time to tweak it a little.
Being able to be accountable and then alter as needed is a vital part of entrepreneurship.
 Related Topics: What is Marketing Mix?

Importance of Entrepreneurship:
● Creation of Employment- Entrepreneurship generates employment. It provides an
entry-level job, required for gaining experience and training for unskilled workers.
● Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.
● Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and
promotes facilities like higher expenditure on education, better sanitation, fewer slums, a
higher level of homeownership. Therefore, entrepreneurship assists the organisation
towards a more stable and high quality of community life.
● Increase Standard of Living- Entrepreneurship helps to improve the standard of living of
a person by increasing the income. The standard of living means, increase in the
consumption of various goods and services by a household for a particular period.
● Supports research and development- New products and services need to be researched
and tested before launching in the market. Therefore, an entrepreneur also dispenses
finance for research and development with research institutions and universities. This
promotes research, general construction, and development in the economy.

10 most common types of entrepreneurship:

1. Small businesses entrepreneurship

2. Scalable startup entrepreneurship
3. Intrapreneurship
4. Large company entrepreneurship
5. Imitative entrepreneurship
6. Innovative entrepreneurship
7. Buyer entrepreneurship
8. Researcher entrepreneurship
 9. Hustler entrepreneurship
10. Social entrepreneurship

01. Small business entrepreneurship

This type of entrepreneurship refers to any kind of small business that has been
created by one person, without the goal to expand or franchise. For example, if you
were planning to open a nail salon, a general store or a taco truck your goal would
be to launch a single store. You’d likely plan on hiring local employees or even family
members to get your business off the ground and would need to invest your
resources directly into the business.

In this type of business, you only make a profit if your company does, meaning you
need to be very driven, responsible and committed to your vision. In 2020, there
were 33.7 million small businesses in the United States, accounting for 99.9% of
companies, proving that small business entrepreneurship is on the rise.

02. Scalable startup entrepreneurship

Rooted in the idea of changing the world, scalable startups focus on how to create a
business model that is both repeatable and scalable (more sales with more
resources). From the get go, this style of entrepreneurship begins with the hope of
rapid expansion and big profit returns. Many startups have a similar ‘garage to
riches’ narrative, beginning with a simple idea that is brought to life by the tenacity of
entrepreneurs with the support of investors. Amazon, Google and Apple are all
examples of trailblazing startups that have changed the world.

In order to establish a successful startup, you need to pay attention to the amount of
money you have (which is often supported by venture capital investors) and the
human resources behind your business. The key to starting this type of business
model is knowing the long-term plans for profitability and the ways in which your
company will grow, both for the sake of your investors, and your own.

03. Intrapreneurship

Unlike an entrepreneur, who is also the founder, designer and manager of a

business, an intrapreneur is a self-motivated, and action-oriented employee who
thinks out of the box and works as an entrepreneur within a company.
Intrapreneurship is a way that companies can support and encourage employees
that have entrepreneurial spirit.

Shutterstock, for example, hosts an annual 24-hour hackathon which lets employees
pursue innovative ideas that will benefit the company. Another example of an
intrapreneurial innovation is Facebook’s ‘Like’ button which was also created in a
similar hackathon event, which is now an integral part of the brand.

04. Large company entrepreneurship

Large company entrepreneurship refers to companies like Disney, Google, Toyota,

and Microsoft who have finite life cycles, as in, they keep innovating and offering
consumers new products that are variants around their core product-line.

A distinguishing feature of this type of entrepreneurship is that it is not starting a new

business, rather creating new products or subsidiaries within an existing company, or
acquiring smaller businesses (like when Facebook bought Instagram and
WhatsApp). More specifically, these divisions are focused on reaching new markets,
expanding the customer base and growing the business.
Another component of large company entrepreneurship is a commitment to building
company culture, ensuring that as a company expands all employees are a part of
the growth.

05. Imitative entrepreneurship

Imitation is the best form of flattery, and an imitative entrepreneur (also referred to as
an adoptive entrepreneur) is one who copies what successful innovative
entrepreneurs have previously done, most often with lower financial risks and limited
resources.

If you are using an imitative entrepreneurship style, in essence you are copying an
idea but finding ways to improve it. By taking note of others' mistakes and finding
creative ways to make a business better, you can become a lucrative entrepreneur.

06. Innovative entrepreneurship

Innovative entrepreneurs, as the name suggests, are constantly trying to come up

with the next big thing. If you have groundbreaking ideas of how to start a business
or specific services and products that can become business ventures, you might be
an innovative entrepreneur.

As an innovator, you know you must always be aware of the current market
conditions to find original and creative ways to disrupt them. Innovation refers not
only to product ideas but also the ways in which business is conducted. Innovative
entrepreneurship is all changing the status quo and pushing boundaries.

07. Buyer entrepreneurship

You’ve probably heard the saying “money makes money”, and for a buyer
entrepreneur this definitely rings true. Instead of figuring out how to raise money for
a business, a buyer entrepreneur purchases either a developing or well-established
company and helps them thrive.
Unlike investors, a buyer entrepreneur is involved both financially and personally in
the business, remaining active and directly helping the investment to grow. It is not
uncommon for buyer entrepreneurs to hand off their leadership to someone else at
some point, but they always maintain an active part in the businesses they purchase.

08. Researcher entrepreneurship

Researcher entrepreneurs rely on facts, data and the belief that with the right
preparation and knowledge will be more likely to succeed. If this sounds like you, this
is exactly what research entrepreneurship is all about—a great business idea paired
with academic research, and an understanding of how to stretch limited resources to
the max.

Take a look at Nobel Prize winner and physicist, Theodor Hänsch, a researcher
entrepreneur who co-founded MenloSystems, taking his winning optical frequency
comb technology and using it to make products for the market.

09. Hustler entrepreneurship

Don’t let the name throw you off, a hustler in business refers to a self-starter, a highly
motivated person who is driven to succeed. This type of entrepreneurship style
grows directly from the entrepreneur, who must be confident, fearless and have
rigorous work ethic.

If you are the type of person who can sell anything to anyone, is always aware of the
next big thing and is able to recognize opportunities, you might just be a hustler after
all.

10. Social Entrepreneurship

Social entrepreneurs are innovators whose main goal is to create products and
services that both benefit the world, and make money. Social entrepreneurship
relates to nonprofit, for-profit, or hybrid companies that are committed to social or
environmental change. Some examples include educational programs, microfinance
institutions, and companies that provide banking services in undeveloped countries.

Toms shoes was a pioneer of social entrepreneurship, starting in 2006 offering a

one-for-one sales model that gave a pair of shoes to a child in need for every pair of
shoes sold. What separates social entrepreneurship from other types is the measure
of success, in that the goal is not focused solely on financial gain but also on the
social impact.
Classification According to Type of Business

1. Business Entrepreneur

Business entrepreneur is called solo entrepreneur. He/she is the one who

conceives an idea for a new product/service and establishes a business
enterprise to translate his idea into reality. He/she may establish small or large
enterprise to commercially exploit his/he idea. He/she takes up production,
operations and pursues marketing activities.

2. Trading Entrepreneur

Trading entrepreneurs are those who restrict themselves to buying and selling
finished goods. They may be engaged in domestic and international trade. Their
core strength lies in distribution and marketing. They get their income by way
of commission and marketing.

3. Industrial Entrepreneur

These are entrepreneurs who manufacture products to cater to the needs of

consuming public after identifying the need left unfulfilled by the manufacturer
hitherto. They may be small, medium and large entrepreneurs. Industrial
entrepreneurs mobilise the resources of various types and create an entity to
manufacture the products or service. They add utility to products rolled out by
them which is termed as value addition.

4. Corporate Entrepreneur

Corporate entrepreneur is called promoter. He/she takes initiative necessary to

start an entity under corporate format. He/she arranges to fulfil the formalities to
start a corporate entity under Company law. Corporate entrepreneur assembles
all the resources and put in place organisation to run the business on a
day-to-day basis. In corporate form of organisation, ownership and management
are separated. Corporate entities are registered under the Companies Act or
under the Trust Act. Corporate entrepreneurs install a team of experts to manage
the entity on a day to day basis.
5. Agricultural Entrepreneur

Agricultural entrepreneurs are those entrepreneurs who raise farm products and
market them. They use the various inputs like labour, fertilizer, insecticide,
water technology etc. to raise the products and market their products either
directly or through co-operative entities or through brokers or through tie up
with large retailers. Those who raise allied products like poultry, meat, fish,
honey, skin, agricultural implements, flower, silk, fruits, prawn etc., are called
agricultural entrepreneur. In short these entrepreneurs pursue their venture in
agriculture and allied sector.

6. Retail Entrepreneurs

Retail entrepreneurs are those who enter into venture of distributing the
end-product to final consumer while wholesale entrepreneurs take up the
venture of distributing the product to retailer. They used to buy the goods in
small quantities from numerous wholesalers and make it available different
products of different brands under one roof to end consumer.

7. Service Entrepreneurs

Service entrepreneurs enter into the venture of supplying service products to end
consumers. Hoteliers, airlines, banking, insurance and financial service
providers, repair service organisation, bus operators, train service, advisory
organisation, advertising firms, manpower supplier etc., come under service
entrepreneur’s category.

10 Qualities of a Successful Entrepreneur

● 1) Creativity
 ● 2) Professionalism
● 3) Risk-taking
● 4) Passion
● 5) Planning
● 6) Knowledge
● 7) Social Skills
● 8) Open-mindedness towards learning, people, and even failure
● 9) Empathy
● 10) The customer is everything

Who is an Entrepreneur? What are the characteristics of an entrepreneur that nurture

success? An entrepreneur is a person who has a passion for creation and the ability
to follow through on their ideas, someone who has the ability to see a need that has
previously not been addressed or in some cases created a need that didn’t even
exist. Entrepreneurs want to work for themselves and are willing to take risks in order
for their ideas or products to succeed.

A lot of people want to be an entrepreneur and wonder if they are cut out to be one,
here are few of the common traits found in entrepreneurs. This is not saying that you
need all, or without these, you cannot be successful. Ultimately success is
determined by a lot of hard work and a little bit of luck.

Here are the 10 Best Characteristics

Of An Entrepreneur that one must
nurture:
1) Creativity:

Creativity gives birth to something new. For without creativity, there is no innovation
possible. Entrepreneurs usually have the knack to pin down a lot of ideas and act on
them. Not necessarily every idea might be a hit. But the experience obtained is gold.
Creativity helps in coming up with new solutions for the problems at hand and allows
one to think of solutions that are out of the box. It also gives an entrepreneur the
ability to devise new products for similar markets to the ones he’s currently playing
in.

2) Professionalism:

Professionalism is a quality which all good entrepreneurs must possess. An

entrepreneurs mannerisms and behavior with their employees and clientele goes a
long way in developing the culture of the organization.

Along with professionalism comes reliability and discipline. Self-discipline enables

an entrepreneur to achieve their targets, be organized and set an example for
everyone.

Reliability results in trust and for most ventures, trust in the entrepreneur is what
keeps the people in the organization motivated and willing to put in their best.
Professionalism is one of the most important characteristics of an entrepreneur.

3) Risk-taking:

A risk-taking ability is essential for an entrepreneur. Without the will to explore the
unknown, one cannot discover something unique. And this uniqueness might make
all the difference. Risk-taking involves a lot of things. Using unorthodox methods is
also a risk. Investing in ideas, nobody else believes in but you is a risk too.

Entrepreneurs have a differentiated approach towards risks. Good entrepreneurs are

always ready to invest their time and money. But, they always have a backup for
every risk they take.

For exploring in the unknown, one must be bestowed with a trump card; a good
entrepreneur has one, always. Also, evaluation of the risk to be undertaken is also
essential. Without knowing the consequences, a good entrepreneur wouldn’t risk it
all.

4) Passion:

Your work should be your passion. So when you work, you enjoy what you’re doing
and stay highly motivated. Passion acts as a driving force, with which, you are
motivated to strive for better.

It also allows you the ability to put in those extra hours in the office which can or may
make a difference. At the beginning of every entrepreneurial venture or any venture,
there are hurdles but your passion ensures that you are able to overcome these
roadblocks and forge ahead towards your goal.

5) Planning:

Perhaps, this is the most important of all steps required to run a show. Without
planning, everything would be a loose string as they say, “If you fail to plan, you plan
to fail.”

Planning is strategizing the whole game ahead of time. It basically sums up all the
resources at hand and enables you to come up with a structure and a thought
process for how to reach your goal.

The next step involves how to make optimum use of these resources, to weave the
cloth of success.Facing a situation or a crisis with a plan is always better. It provides
guidelines with minimum to no damage incurred to a business. Planning is one of
the most important characteristics of an entrepreneur.

6) Knowledge:

Knowledge is the key to success. An entrepreneur should possess complete

knowledge of his niche or industry. For only with knowledge can a difficulty be solved
or a crisis is tackled.

It enables him to keep track of the developments and the constantly changing
requirements of the market that he is in. May it is a new trend in the market or an
advancement in technology or even a new advertiser’s entry, an entrepreneur should
keep himself abreast of it. Knowledge is the guiding force when it comes leaving the
competition behind. New bits and pieces of information may just prove as useful as
a newly devised strategy.

He should know what his strengths & weaknesses are so that they can be worked on
and can result in a healthier organization.

A good entrepreneur will always try to increase his knowledge, which is why he is
always a learner. The better an entrepreneur knows his playground, the easier he can
play in it.

7) Social Skills:

A skillset is an arsenal with which an entrepreneur makes his business work. Social
Skills are also needed to be a good entrepreneur. Overall, these make up the qualities
required for an entrepreneur to function.
Social Skills involve the following:
● Relationship Building

● Hiring and Talent Sourcing

● Team Strategy Formulation

And many more.

8) Open-mindedness towards learning, people, and even failure:

An entrepreneur must be accepting. The true realization of which scenario or event

can be a useful opportunity is necessary. To recognize such openings, an
open-minded attitude is required.

An entrepreneur should be determined. He should face his losses with a positive

attitude and his wins, humbly. Any good businessman will know not to frown on a
defeat. Try till you succeed is the right mentality. Failure is a step or a way which
didn’t work according to the plan. A good entrepreneur takes the experience of this
setback and works even hard with the next goal in line.

This experience is inculcated through the process of accepted learning. Good

entrepreneurs know they can learn from every situation and person around them.
Information obtained can be used for the process of planning.

Learning with an open mind lets you look at your faults humbly. New information
always makes an entrepreneur question his current resolve. It also provides a new
perspective towards a particular aspect. Open-mindedness also enables you to know
and learn from your competition.

9) Empathy:

Perhaps the least discussed value in the world today is empathy or having high
emotional intelligence. Empathy is the understanding of what goes on in someone’s
mind. This a skill that is worth a mention. A good entrepreneur should know the
strengths and weaknesses of every employee who works under him.You must
understand that it is the people who make the business tick! You’ve got to deploy
empathy towards your people.

Unhappy employees are not determined and as an entrepreneur, it is up to you to

create a working environment where people are happy to come. To look after their
well-being, an entrepreneur should try to understand the situation of employees.
What can be a motivational factor? How can I make my employees want to give their
best? All this is understood through empathy.

Keeping a workplace light and happy is essential. For without empathy, an

entrepreneur cannot reach the hearts of employees nor the success he desires.
Empathy is one of the most important characteristics of an entrepreneur.

10) And lastly, the customer is everything:

A good entrepreneur will always know this; a business is all about the customer. How
you grab a customer’s attention is the first step. This can be done through various
mediums such as marketing and advertising.

It is also important that you know the needs of your customers. The product or
service which is being created by your organization needs to cater to the needs of
your consumers. Personalising a business for consumers will also boost the sales.

The ability to sell yourself in front of a potential investment when it comes in the
form of a customer is also required. Being ready with the knowledge to please a
customer, is a way to have a successful business.

It isn’t necessary that every entrepreneurial venture is a huge success. In addition to

a brilliant idea, viability is an equally important aspect of a business, which is where
having a business education can play an important role. All these characteristics of
an entrepreneur can be instilled in an individual

Summer courses, full-time courses that can take young entrepreneurs through the
nuances of finance, marketing and organization become important and can help in
this journey. Columbia Business School Summer Programme in association with
JBCN International School is one such opportunity budding entrepreneurs can learn
from

Factors Influencing Entrepreneurship

Development
To facilitate the study, the major factors influencing entrepreneurship development as
follows:

1. Motivational Factors
Motivation plays an important role in entrepreneurship development.
It is an important internal desire and force, which inspires him to take up
entrepreneurial works and encourages him to achieve in his goals.

Entrepreneurial motivation helps in entrepreneurship development. The achievement

motivation, power motivation, and expansion motivation are important factors.

The achievement motivation Lays emphasis on the extent of desire of an individual

for obtaining achievements, bringing out new and demonstrating excellent work
efficiency.

If he has the interest, temperament, and commitment, he will be inspired to establish

enterprise, otherwise not.

Related: 12 Theories of Entrepreneurship (Explained with Examples).

Similarly, Under the power motivation, the entrepreneurs have the desire to
influence other persons and keep control of them.

It will motivate them to go ahead.

Thus, the desire of the individual determines the level and development of
entrepreneurship.

● Persons who have individual effectivity or the ability and quality to influence
the situations, then they may easily be motivated towards Entrepreneurship.
● An Entrepreneur has to accomplish various functions, like the establishment,
management, and operations of the industry. He has to remain alert against
various challenges and external forces and has also to bear various pressures
and stresses.

In such a situation, the individuals who have the capacity to struggle, have the
potential to become an entrepreneur.

2. Entrepreneurial Skills
An entrepreneur requires various types of skills, like human, business, managerial and
Technical for success.
The entrepreneurial development may be easily encouraged by developing these
skills in the entrepreneurs.
Following three types of skills are necessary for an entrepreneur:

1. An Entrepreneur should have projects skills for establishing industry, he has

to collect various facts and information, formulate projects, consider various
stages of projects and to make investment decisions.
2. The entrepreneur should have the managerial ability for successful
management and operation of the industry. He has to manage work planning,
organize various activities, take effective decisions, communicate skillfully,
provide directions, exercise effective control etc.
3. An entrepreneur must have the ability of Creative Thinking and ability to Grab
opportunities, in order to establish his distinct identity in the industry.

Related: 37 Essential Qualities of Successful Entrepreneur (Must Know).

3. Entrepreneurial Knowledge
Entrepreneurial knowledge is also an important factor in determining entrepreneurial
development.

Such knowledge helps them in framing strategy relating the industry by making use
of their skills.

The entrepreneurs require knowledge of the following three areas:

● He should have knowledge of physical, social, cultural, political, legal,

technological and ethical factors of the environment.
● He should have knowledge about various issues, relating to the alternatives
industries: the best alternative amongst various alternatives; raw material to
be used- foreign or domestic, production process, distribution of products,
competitive firms, etc.
● After selection of the best industry, the entrepreneur should have detailed
knowledge of various Technological aspects, like suitable production
technique, their costs, and likely profits, of the industry to facilitate the
development of entrepreneurship.

4. Normative Behaviour
Normative behavior has three aspects namely bearing of risks, family expectations and
pressures, self-dependence and work culture, etc.
Which influence entrepreneurship development

1. The person’s tendency to bear risks and uncertainties implies that they are
not afraid of challenges and responsibilities. They work hard and these
facilities prefer entrepreneurial development.
2. Family expectations or motivations also have an important role in
entrepreneurship development. If the head of the family and other members
desire to earn a good amount of wealth by doing Independent work and
engaging all family members then it gains social reputation, so establishment
of own enterprise increases.
3. The Desire of a person to lead Independent and self-dependent life is also
helpful in making a man entrepreneur and it facilitates overall
entrepreneurship development. Such persons believe in self-employment.
Hence, persons having such a desire to become successful in the
establishment of an enterprise in project works, even without suggestions,
directions, and guidelines, from others.
4. Work culture is the base for entrepreneurship development. In the societies,
where people believe in ‘work is worship‘, intense desire to work, and has
interest and love for work, the development of the entrepreneur is fast and
substantial. On the contrary, the persons who believe in luck, and have no
Desire and concern for work and avoiding activeness, push the
entrepreneurship backward. In such situations, entrepreneurship development
is very difficult.

5. Socialization
In the society where commitment for achievement is taught formally or informally in
schools, religious organizations, political parties, educational institutions.

The qualities to accept challenges the entrepreneurial development is substantially

high and faster.

The following socialization factors are significant in entrepreneurship development:

1. Feelings for achievements and contractive achievements have an effect on

entrepreneurship development in a highly positive manner.

If it is not so, it will adversely affect entrepreneurship. As a result, the establishment

of the enterprise is difficult and problems develop even in respect of exiting
Enterprises.
2. The base of entrepreneurship can be build by providing training through
socialization. This training may be provided in two ways social training of
self-dependence and training of initiations to youth, etc.

As a result, the self-dependence of people will increase and they will start the
establishment, development, and expansion of the enterprise. But, it should be kept
in mind that neither excessive security be provided to them, nor excessive directions
are provided.

Otherwise, they will never take interest in working independently.

They will often wait for someone who may be provided reasonable guidance and
security.

Related: 22 Advantages and Disadvantages of Privatization (Economics).

6. Economic and Business Environment

Economic and business environment, economic stability, competition, trade cycles,
prices, income levels, investments and savings position of the market, market
competition, and Monopoly market, imperfect competition, capital market
transportation, and communication awareness towards the environment, quality of
entrepreneurs and innovations, etc.

Significantly influence entrepreneurial development.

Besides, various sections of the society, Like consumers, suppliers, workers,

employees, investors and debenture holders etc. also have an important role in
entrepreneurship development.

7. Government Policies and Incentives

Various economic and business policies of the government, like industrial policy,
Licensing policy, agriculture policy, monetary and fiscal policy, Labour policy,
Export-Import policy, etc. also influence entrepreneurship development.

If the economic policies of the government are suitable, progressive and sound,
these may encourage entrepreneurship development.
The government may attract entrepreneurs by making them aware about its positive
approach towards enterprises/Industries through these policies and by providing
them the incentives and facilities etc.

The government may also attract the entrepreneurs towards backward villages and
areas also by announcing and providing special concessions facilities and assistance, in
addition to general incentives.
These incentives help in increasing production, income, savings, investments and
capital formation and ultimate development of the country.

Related: Social Responsibility of Entrepreneurs towards Government & Institutions.

8. Economic Laws
Economic laws and rules also affect entrepreneurship development.

Such laws and rules include Monopolies restrictive and trade practices Act, Labour
laws, business laws, industrial laws, acts relating to various taxes, like Income Tax,
sales tax, wealth tax, and various other laws and rules.

The government provides impetus to economic activities by framing practical and

useful laws and rules.

These also provide the safeguard to the entrepreneurs for their business, wealth and
property.

Besides, law and order also be managed by the government to sustain Industrial
Development.

The government may also make the rules and laws more effective for the
establishment of industries.

Thus, a conducive legal environment may be built for entrepreneurial development.

9. Scientific and Technological Development

Technology, technological activities, and Technical research available in the country
results in scientific and technical development, which also influence the
entrepreneurship.
factors influencing entrepreneurship development
Various new scientific inventions and technical development contribute to agricultural
and industrial development.

Through various new production methods, mount up production in the country, cost
of production costs of production reduces, production of new products become
possible and search of new raw materials and new markets is easily facilitated.

All this ultimately affect the development of entrepreneurs.

If the government pay adequate attention to the technical development of the

country, the development of entrepreneurs is quite fast and substantial.

Related: 10 Objectives of Entrepreneurial Development Programmes – Explained.

10. Political and Administrative System

The Political and Administrative System of the country also influences the
entrepreneurial development.

Various factors and conditions, Like approach of the government (communist,

socialist, dictatorial) policies concerning public welfare and Social Justice, donations,
gifts received by political parties and public leaders from business Institutions,
political stability, defence policy for national security, foreign policy, bureaucracy,
government policies and rules, National Prestige, etc.

Constitute political and administrative systems.

For example, the liberal policies and practical rules for setting up of industries will
encourage Development of the entrepreneurs.

If the policies and rules are complex and cumbersome, no entrepreneur will come
forward to establish the industries.

In addition, if the Bureaucracy is corrupt, entrepreneurial development will not be

possible.

11. Attitude of Big Entrepreneurs

The attitude has a direct or indirect role in entrepreneur development.
The positive attitude of the existing big entrepreneurs encourages and negative
attitude discourages the small entrepreneurs.

If the Big Entrepreneur uses various types of facilities, like raw materials,
semi-finished products, Machinery, Tools, Finance, Management services, and
advice, etc. Available to the small entrepreneurs, then they get encouraged.

Besides, they may also solve various problems of the small entrepreneurs.

Such type of attitude encourages the development of entrepreneurship, otherwise,

attitude discourages the small entrepreneurs.

12. Infrastructural Facilities

The government provides various infrastructural facilities for entrepreneurship
development.

These include the supply of raw materials, communication, roads, water, electricity,
constructions of Industrial Area, Supply of sources of energy, Insurance, godowns,
and financial services, etc.

Related: 15 Functions of Leadership (Explained with Examples).

13. Mechanism of Identifying and Developing

Entrepreneurs
In every society, potential entrepreneurs always exist.

The society which is capable of identifying the entrepreneurial potential of its young
generation may develop their entrepreneurial feelings by engaging them in creative
activities.

But, it is the duty of society and its members not to make partiality.

In India, identification and development of new entrepreneurs is now the

responsibility of district industries centers.
14. Entrepreneurship Oriented Education System
The educational institutions are contributing for development of entrepreneurial
tendencies of the entrepreneurs.

These include schools, colleges, universities, Technical Institutes, management

institutes, and entrepreneurial development institutes, etc., which conduct various
business and entrepreneurship oriented courses.

In these courses, detailed and useful knowledge is provided regarding the role of
entrepreneurial functions, the establishment of business enterprises, their
management and operation, preparation of project Reports and entrepreneurship,
etc.

Thus, entrepreneurship may be developed by expansion and publicity of business

and technical education in our country.

15. Role of Banks and Specific Financial Institutions

The good number of banks and specific institutions have been established with the
objective of development of entrepreneurship.

factors influencing entrepreneurship development

Entrepreneurial Development Institute, Entrepreneurship development boards,
National Research and Development Corporation(NRDC), National Entrepreneurship
and small business development institute, Nationalised and commercial banks and
state financial corporation have played a significant role in entrepreneurship
development.

These banks and Financial Institutions encourages Entrepreneurship by way of

providing finances at concessional rates, Approving the projects of the entrepreneurs
quickly and by providing loan facilities for Research and investigation etc.

Not only that, banks and specific Institutions provide refinance credit facility to sick
units and also provide them with the required advice.

Related: 59+ Important Functions of an Entrepreneur (With Examples).

16. Training Facilities

Various organizations and Institutions conduct training programs for the development
of entrepreneurial abilities and capacities among people.

Under these programmes, exchange of thoughts, ideas, and experiences take

place and conferences, seminars and group discussions are held.

Thus, entrepreneurial training institutes have a distinct role in the development of

entrepreneurship.

17. Supporting Institutions

The government has established various types of supporting institution, Agencies,
and organizations for entrepreneurial development.

The functions of these institutions are to provide assistance to the entrepreneur in

marketing, management, raw materials, machinery, training, exports, modernization,
and other matters.

These institutions and Agencies also provide services of surveys, Technical

Education, business counseling, machine designing, product development, research
projects, development, and investigation, etc.

By such types of functions and services, entrepreneurship is developed.

18. Research and Literature

Research Institutions also have an important role in entrepreneurial development,
like National Investigation and Development Corporation.

The main function of this Institute is to help the technological development.

It has the liaison with technology development Institutions and prepares a vast sock
of Made in (Country Name) technology emanating from various research activities
carried out by various Research and Development Institutes.

In addition, Research institutes carry out research problems and publish them,
which is helpful in the development of entrepreneurs in the country.

By entrepreneurial literature and research, the entrepreneurs get guidance for setting
up of the enterprises.
It attracts the young generation towards entrepreneurship.

19. Other Factors

In addition to the aforesaid factors influencing entrepreneurship development,
various other factors also influencing it.

These are the development of entrepreneurial attitudes, Cooperation of various

organizations and Institutions, the entrepreneurial culture of the society, the concept
of materialism.

Thus, now you know the what key factors influencing entrepreneurship development.

Entrepreneurship Functions: 13 Functions

Makes an Entrepreneur Successful

Entrepreneurship, as we know, is the pivotal factor for new initiatives that

give momentum and prosperity to our civilization.

Entrepreneurs are those who perceive what others haven’t seen and act
upon that perception.

Therefore, Entrepreneurs performs multivariate functions in all the

societies irrespective of their level of development.

5 stages of the Conflict process are; 1) potential opposition or incompatibility, 2)

Cognition and personalization, 3) intentions, 4) Behavior, and 5) Outcome.

Peter Kilby, Albert Shapiro, John Burch, and others have prescribed different
functions of entrepreneurship or entrepreneur from which we can derive
distinct but common functions of entrepreneurship.
Functions of a successful entrepreneur are;

1. Taking Initiative
2. Organizing Resources
3. Identifying Opportunities and Prospects
4. Risk-Taking
5. Decision Making
6. Technology Transfer and Adaptation
7. Innovation
8. Fostering Autonomy
9. Social Responsibility
10. Public Relations
11. Experience Sharing
12. Managerial Roles
13. Balanced Economic Development

These are explained below;

1. Taking Initiative

Entrepreneurship is a pro-active activity that takes such actions, which

others can’t even perceive.

This unique function of entrepreneurship provides our civilization with a

wide variety of products, ways of actions, production techniques, etc.

Therefore, taking initiative with such end and qualification is the prime
function of entrepreneurship in every economy.

2. Organizing Resources

Organizing entails identifying those resources that are required to

transform a particular idea into reality. The resources include human and
nonhuman resources.
Organizing in entrepreneurship will increase productivity, promote new
ventures, distribute and supervise work and responsibility, and will remove
barriers to work.

Entrepreneurship, thus, is the taping tool fur assuming indigenous skills

and resources for the productive purpose.

3. Identifying Opportunities and Prospects

Entrepreneurship searches those activities of value that have an economic

and social contribution.

It identifies new opportunities in the socio-economic arena which have got

profitable prospects therefore, entrepreneurs are called searchers of hopes
into blind spots and this function enormously indebted our society to
entrepreneurship.

4. Risk-Taking

Entrepreneurship takes the risk for the new venture.

For innovative actions in the field of production technology for new

products in a volatile market and new raw materials used in production.

Moreover, it also takes the risk for theft, robbery, snatching market fall and
hooliganism that may be involved with new entrepreneurship This is a
major function of entrepreneurship in developing countries.

5. Decision Making

Entrepreneurship is a new initiative therefore, it has to decide multivariate

issues that affect new ventures.

Entrepreneurship has to decide upon equipment to be used quality, price

and its variation, deficiency, capital structure, the feasibility of the project,
organizational structure, philosophy of management, etc. that will guide,
run and prosper the new venture or distinct attempt for entrepreneurship.
We know that decision-making is a process and entrepreneurship to make
n a success, goes through this process.

6. Technology Transfer and Adaptation

Entrepreneurship throughout the world brings invented technology from

different comers of the world and makes it appropriate by making required
adjustments for local conditions.

This function of entrepreneurship involves identifying appropriate

technology with market potentials and adapts it into the local environment.

Sometimes, the technology uses indigenous materials that reduce cost and
wastage of resources. This entrepreneurial function virtually makes the
world united in terms of homogeneous technology.

7. Innovation

Entrepreneurship innovates a new production process or technology,

market, sources of new materials, management, strategy or technique,
investment opportunity, etc. that Schumpeter (1934) calls as the
fundamental characteristics of entrepreneurship.

Under the context of the changing environment, the entrepreneur locates

the most feasible opportunity for the venture as well as improved or
distinct technology that gives competitive advantages or a new opportunity
to prosperity.

Innovation is a creative means to add new utilities to existing situations or

products. Entrepreneurship through innovation creates innovative products
or operations for human society.

8. Fostering Autonomy

Entrepreneurship is an exposure of creative faculty that provides personal

satisfaction and independence. The unique freedom to think differently is
the impetus for entrepreneurship.
Thus, entrepreneurship Fosters autonomy to advent something new of
value by the application of devoted efforts and time.

9. Social Responsibility

Entrepreneurship with its innovative technology somehow promotes human

efforts. It restarts closed industries with innovative managerial strategies
and techniques

It also motivates new entrepreneurs and attracts them to engage into an

entrepreneurial venture.

Entrepreneurship provides new products or ideas that give momentum and

diversity into society.

Therefore, entrepreneurship performs social responsibility that protects the

welfare, benefit and economic gain of the society. It also promotes the
community standard by providing jobs and amenities.

10. Public Relations

Entrepreneurship is a new venture that requires social acceptance by the

regulatory bodies and the public at large.

The government, as well as the persons’ who will be subject to

entrepreneurship, would be convinced through public relations to accept
and to allow the entrepreneur to execute an entrepreneurial venture.

History tells that many entrepreneurs were disregarded, coerced and even
eliminated for their entrepreneurial activities. Failure is costly and therefore,
public relation is a significant function of entrepreneurship.

11. Experience Sharing

Entrepreneurship may spread in society through publishing and sharing its

success stories.
Thus, entrepreneurship holds workshops, industrial visits through which the
entrepreneurial experience in different counties may be shared with a
widespread adaptation of success.

This function will benefit the economies of the countries as well as the
world bodies,

12. Managerial Roles

Entrepreneurs perform several managerial roles to keep their venture

functioning with success.

The roles are interpersonal roles that consist of a figurehead role,

leadership role, and liaison role; informational roles that include recipient
role, disseminator role, and the spokesperson role; decisional roles that
consist of an entrepreneurial role, disturbance-handler role, resource
allocator role, and the negotiator role.

The entrepreneur also does the associated managerial functions such as

planning, organizing, leading and controlling.

13. Balanced Economic Development

Sustainable economic development requires a balanced development

among various regions and sectors of a country. Every country tries to
ensure such a situation that makes industrialization throughout the country
“possible.

Entrepreneurs make it possible by establishing business ventures in

various parts of the country in various sectors of the industry.
UNIT II
Entrepreneur development agencies:

The Government has set up various centres or institutes to impart training and
development to entrepreneurs, so as to improve their knowledge, attitudes, and
skills.

For the development of entrepreneur a number of specialized agencies have been

set up by the state and central goverenments which are as follows:

■ Small Industries Service Institutes (SISI)

■ Small Industries Development Organisations (SIDO)
■ National Small Industries Corporation
■ Small Industries Extension Training Institute.
■ Entrepreneurship Development Institute of india
■ Institute for Rural Management and Adminstration
■ National Institute for Entrepreneurship and Small Business Development
(NIESBUD)
■ National Alliance of young entrepreneurs (NAYA)
■ Maharashtra Centre for Entrepreneurship Development (MCED)

Government plays a very important role in developing entrepreneurship. Government

develop industries in rural and backward areas by giving various facilities with the
objective of balances regional development.The government set programmes to help
entrepreneurs in the field of technique,finance,market and entrepreneurial
development so that they help to accelerate and adopt the changes in industrial
development.Various institutions were set up by the central and state governments in
order to fulfill this objective.

A. Institutions set up by Central Government

1. Small industries development organization (SIDO)

SIDO was established in October 1973 now under Ministry of Trade, Industry and
Marketing. SIDO is an apex body at Central level for formulating policy for the
development of Small Scale Industries in the country,headed by the Additional
Secretary & Development Commissioner(Small Scale Industries)under Ministry of
Small Scale Industries Govt. of India. SIDO is playing a very constructive role for
strengthening this vital sector, which has proved to be one of the strong pillars of the
economy of the country. SIDO also provides extended support through
Comprehensive plan for promotion of rural entrepreneurship.

2. Management development Institute(MDI)

MDI is located at Gurgaon(Haryana).It was established in 1973 and is sponsored by

Industrial Finance Corporation Of India,with objectives of improving managerial
effectiveness in the industry.It conducts management development programs in
various fields.In also includes the programmes for the officers of
IAS,IES,BHEL,ONGC and many other leading PSU’s.

3. Entrepreneurship development institute of India (EDI)

Entrepreneurship Development Institute of India (EDI), an autonomous and

not-for-profit institute, set up in 1983, is sponsored by apex financial institutions – the
IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. and the State Bank of India (SBI). EDI has
helped set up twelve state-level exclusive entrepreneurship development centres
and institutes. One of the satisfying achievements, however, was taking
entrepreneurship to a large number of schools, colleges, science and technology
institutions and management schools in several states by including entrepreneurship
inputs in their curricula. In the international arena, efforts to develop
entrepreneurship by way of sharing resources and organizing training programmes,
have helped EDI earn accolades and support from the World Bank, Commonwealth
Secretariat, UNIDO, ILO, British Council, Ford Foundation, European Union, ASEAN
Secretariat and several other renowned agencies. EDI has also set up
Entrepreneurship Development Centre at Cambodia, Lao PDR, Myanmar and
Vietnam and is in the process of setting up such centres at Uzbekistan and five
African countries.

4. All India Small Scale Industries Board(AISSIB)

The Small Scale Industries Board (SSI Board) is the apex advisory body constituted
to render advise to the Government on all issues pertaining to the small scale
sector.It determines the policies and programmes for the development of small
industries with a Central Government Minister as its president and the
representatives of various organization i.e. Central Government,State
Government,National Small Industries Corporations,State Financial
Corporation,Reserve Bank of India,State Bank of India,Indian Small Industries
Board,Non government members such as Public Service Commission,Trade and
Industries Members.

5. National Institution of Entrepreneurship and Small Business

Development(NIESBUD),New Delhi

It was established in 1983 by the Government of India.It is an apex body to

supervise the activities of various agencies in the entrepreneurial development
programmes.It is a society under Government of India Society Act of 1860.The major
activities of institute are:

i) To make effective strategies and methods

ii) To standardize model syllabus for training

iii) To develop training aids,tools and manuals

iv) To conduct workshops,seminars and conferences.

v) To evaluate the benefits of EDPs and promote the process of Entrepreneurial

Development.
vi) To help support government and other agencies in executing entrepreneur
development programmes.

vii) To undertake research and development in the field of EDPs.

6. National Institute of Small Industries Extension Training

It was established in 1960 with its headquarters at Hyderabad.The main objectives of

national Institute of Small Industries Extension Training are:

i) Directing and Coordinating syllabi for training of small entrepreneurs.

ii) Advising managerial and technical aspects.

iii) Organizing seminars for small entrepreneurs and managers.

iv) Providing services regarding research and documentation.

7. National Small Industries Corporation Ltd. (NSIC)

The NSIC was established in 1995 by the Central Government with the objective of
assisting the small industries in the Government purchase programmes.The
corporation provides a vast-market for the products of small industries through its
marketing network.It also assists the small units in exporting their products in foreign
countries.

What is Commercial Bank?

A commercial bank is a kind of financial institution that carries all the operations related to
deposit and withdrawal of money for the general public, providing loans for investment, and other
such activities. These banks are profit-making institutions and do business only to make a profit.

The two primary characteristics of a commercial bank are lending and borrowing. The bank
receives the deposits and gives money to various projects to earn interest (profit). The rate of
interest that a bank offers to the depositors is known as the borrowing rate, while the rate at
which a bank lends money is known as the lending rate.

Related link: Banking and its Type

Function of Commercial Bank:

The functions of commercial banks are classified into two main divisions.

(a) Primary functions

Accepts deposit : The bank takes deposits in the form of saving, current, and fixed deposits. The
surplus balances collected from the firm and individuals are lent to the temporary requirements
of the commercial transactions.

Provides loan and advances : Another critical function of this bank is to offer loans and
advances to the entrepreneurs and business people, and collect interest. For every bank, it is the
primary source of making profits. In this process, a bank retains a small number of deposits as a
reserve and offers (lends) the remaining amount to the borrowers in demand loans, overdraft,
cash credit, short-run loans, and more such banks.

Credit cash: When a customer is provided with credit or loan, they are not provided with liquid
cash. First, a bank account is opened for the customer and then the money is transferred to the
account. This process allows the bank to create money.

(b) Secondary functions

Discounting bills of exchange: It is a written agreement acknowledging the amount of money to

be paid against the goods purchased at a given point of time in the future. The amount can also
be cleared before the quoted time through a discounting method of a commercial bank.

Overdraft facility: It is an advance given to a customer by keeping the current account to

overdraw up to the given limit.

Purchasing and selling of the securities: The bank offers you with the facility of selling and
buying the securities.

Locker facilities: A bank provides locker facilities to the customers to keep their valuables or
documents safely. The banks charge a minimum of an annual fee for this service.

Paying and gathering the credit : It uses different instruments like a promissory note, cheques,
and bill of exchange.

Types of Commercial Banks:

There are three different types of commercial banks.

Private bank –: It is a type of commercial banks where private individuals and businesses own a
majority of the share capital. All private banks are recorded as companies with limited liability.
Such as Housing Development Finance Corporation (HDFC) Bank, Industrial Credit and
Investment Corporation of India (ICICI) Bank, Yes Bank, and more such banks.

Public bank –: It is a type of bank that is nationalised, and the government holds a significant
stake. For example, Bank of Baroda, State Bank of India (SBI), Dena Bank, Corporation Bank, and
Punjab National Bank.

Foreign bank –: These banks are established in foreign countries and have branches in other
countries. For instance, American Express Bank, Hong Kong and Shanghai Banking Corporation
(HSBC), Standard & Chartered Bank, Citibank, and more such banks.

You might also want to know: What are the 4Ps of Marketing?
Examples of Commercial Banks
Few examples of commercial banks in India are as follows:

1. State Bank of India (SBI)

2. Housing Development Finance Corporation (HDFC) Bank

3. Industrial Credit and Investment Corporation of India (ICICI) Bank

4. Dena Bank

5. Corporation Bank

District Industries Centre – Schemes,

Eligibility Criteria

District Industries Centre (DIC) is a central sector scheme with the objective of

promoting small village and cottage industries in a particular area. The DICs have

been established in various districts of India at varying times since 1978 when it was

launched. Being established at the district level, the District Industries Centres
provide all the necessary services and support to facilitate entrepreneurs in setting

up MSMEs (Micro, Small and Medium enterprises).

The reason why the Centre came up with the idea of establishing District industries

Centres is that the need for developing industries at a faster rate was felt. The

economy was plateauing and the need to revive it and to shift the focus from

agriculture to industries was felt. With this, the Centre established District Industries

Centres in various districts of the country to expedite the establishment as well as

developing industries in the districts. Being a central sector scheme, it is 100%

funded by the centre with the states not required to make any contributions towards

establishing the same.

The District Industries Centres help in identifying suitable schemes for development

of industrial clusters, help prepare feasibility reports and also arrange facilities for

procuring machinery, equipment as well as credit. The District Industries Centres

(DICs) are headed by a General Manager at the Joint Director Level. The General

Manager is assisted by the Manager (Handloom), Manager (Economic

Investigation), Manager (Credit), Manager (Development) and an Administrative

Assistant. The General Manager provides reviews which helps in evaluating

performance of different schemes and also helps in resolving the difficulties in

implementing those schemes.

Role of District Industries Centres (DICs)

The District Industries Centres (DICs) play a prominent role in developing and

promoting industries in the respective states. They are established by the

Department of Commerce & Industry of the respective state. In addition to DICs,

Sub-District Industries Centres (SDICs) have also been created in various states

such as Nagaland. This additional tier has helped industrial development to

penetrate deeper into the rural areas of the country.

● Provide assistance for DIC programmes

● Single window clearance system

● Promote industries in rural areas

● Provide employment to people in both rural and urban areas

Schemes under the District Industries Centres

(DICs)
A number of schemes have been launched which fall under the ambit of District

Industries Centres (DICs). These schemes help in fulfilling the goals of establishing

the District Industries Centres (DICs). These schemes are centrally sponsored

schemes as well as central sector schemes. The following schemes fall under the

DIC:-

● Prime Minister’s Employment Guarantee Program (PMEGP): This centrally

sponsored scheme under the Ministry of Micro, Small and Medium

Enterprises (MSME) was launched in 2008. The PMEGP aims to generate

employment opportunities for educated unemployed citizens in rural and

urban areas. The nodal agency for the implementation of the scheme is Khadi

& Village Industries Commission (KVIC). Under this scheme, 90-95% of the
 amount will be given by banks as loans with 5-10% of the project cost in the

industry, service or business sector being the applicant’s share.

● District Industries Centre (DIC) Loan Scheme: This scheme is for the

self-employed as well as the small unit sector in towns and rural areas with

population less than 1 lakh and with capital investment being less than Rs. 2

lakhs. These small units are identified by the Small Scale Industries Board

and Village industries, handicrafts, handlooms, silk & coir industries.

For entrepreneurs in the general category, 20% of the total investment or Rs. 40,000

shall be the margin money (whichever is lesser). For entrepreneurs in the SC/ST

category, 30% of the total investment or Rs. 60,000 shall be the margin money

(whichever is lesser).

● Seed Money Scheme: This scheme is targeted towards the self-employed who

engage in skilled wage employment or self-employment ventures. Institutional

financial assistance in the form of soft loans. Project cost to avail loan facility

under the seed money scheme has been increased to Rs. 25 lakhs. For

projects up to Rs. 10 lakhs, seed money assistance of up to 15% of the

project cost is offered. For SC/ST/OBC, the assistance provided will be 20%

of the project cost; the limit of assistance provided is Rs. 3.75 lakhs with 75%

of the project cost being in the form of a bank loan.

● District Awards Scheme : To boost entrepreneurs’ spirits and celebrate their

achievements and successes, the state governments have started honoring

such entrepreneurs with awards at the district level. The District Advisory

Committee formed at the district level shall select the entrepreneurs to be

 awarded. The District Awards Function is held on Vishwakarma Jayanti Day

which falls on varying dates every year. The award function includes the

display of the products by the entrepreneur for sale and exhibition along with

workshops and discussion about the same.

● Entrepreneurship Development Training Programme: This scheme was

launched to impart training to the educated unemployed people and

encourage them to encourage self-employment ventures or engage in skilled

wage employment. Training programmes under the Entrepreneurship

Development Training Programme are:

● Entrepreneurship Introductory Programme (Udyojakata Parichay

Karyakram)

● Entrepreneurship Development Training Programme (12 Day

residential)

● Technical Training Programme (12 Days to 2 Months non-residential)

Eligibility Criteria For Applying Under the District

Industries Centres (DICs)
Loan facility under the District Industries Centres (DICs) can be availed under the

various schemes mentioned above. These schemes are promoted and implemented

by the District Industries Centres (DICs) and loans can be availed under different

schemes with varying eligibility criteria.

Functions of District Industries Centres (DICs)

Various important functions are performed by the District Industries Centres (DICs)

for the upliftment of a district and to put that district on the industrial map of India.

Some of the functions performed by the District Industries Centres (DICs) are

mentioned below:-

● Preparation of industrial profile of the district – This helps in identifying the pros

and cons concerning setting up different industries in the district in

consonance with the availability of infrastructure, raw materials, labor and

land in the area.

● Assist entrepreneurs in obtaining licenses – To set up an industrial unit,

various types of licenses are required- electricity board, no-objection

certificate, water supply board, etc. These licenses are facilitated by the

District Industries Centres (DICs), making it easier for entrepreneurs to set up

industrial units in the respective district.

● Acting as the focal point of industrialization of the district – To make strides in

the arena of industrialization, the District Industries Centres (DICs) act as the

focal point. From providing various clearances and licenses to facilitating

loans and granting awards, the District Industries Centres (DICs) do it all.

● Opportunity guidance of entrepreneurs – Lack of knowledge about an existing

opportunity does more damage than the lack of opportunity. District Industries

Centres (DICs) help in bringing to the fore various opportunities to help

entrepreneurs. This helps in generating employment opportunities in addition

to the industrialization of the district.

 ● Manpower assessment concerning skilled, semi-skilled labour – District

Industries Centres (DICs) help in making optimum use of its platform to

identify the labour that is best fit for the respective market. This helps avoid

under-employment.

● Identify infrastructure facilities – For any area to develop, infrastructure facilities

are a top priority for identifying the potential that can be tapped from a certain

area. Facilities such as electricity, roads, warehouses, banking, quality testing

facilities etc are identified by the District Industries Centres (DICs).

● Prepare techno-economic feasibility report – The District Industries Centres

(DICs) prepare the techno-economic feasibility report that analyzes the

performance of an industrial product, process, or service to improve areas in

need of it.

● Advise entrepreneurs on investments made – The District Industries Centres

(DICs) advise entrepreneurs on the various investments which they seek to

make. In this manner, they provide consultancy services that help

entrepreneurs in making better decisions with respect to their investments.

Activities Under District Industries Centres (DICs)

As an initiative of the central government, the District Industries Centres (DICs) work

towards performing various activities.

These include:-
● Registration of Small Scale Industries (SSI) units – It is for the registration of

industries in the manufacturing as well as the services sector on a small

scale. The registration done can be permanent or provisional.

● Registration of handicraft or cottage industries – This is typically the case with

villages and clusters in rural areas.

● Implementation of PM Rozgar Yojana – Launched in 1993, this scheme is to

provide employment opportunities in both rural and urban areas and is

implemented under the District Industries Centre (DIC) scheme.

● Granting subsidies to SSI units – Subsidies to the Small Scale Industries are

granted under the DIC scheme of the central government.

● Training for Entrepreneur Development Programme – To enhance skills,

training is provided under the ambit of DICs through the Entrepreneur

Development Programme.

● Organization of Industrial Cooperative Society – It is an association of

craftsmen and workers who are engaged in cottage and village industries.

● Raw material assistance through SIDCO – This is to facilitate entrepreneur

initiatives by facilitating them with the supply of raw materials.

● Marketing assistance through SIDCO – The Small Industries Development

Corporation Limited (SIDCO) not only assists ventures with raw materials but

also assists them with the marketing of their produce.

● Conducting motivation campaigns- In addition to hosting awards functions to

boost the morale of entrepreneurs, motivation campaigns are also organized

by DICs.
 ● Single window clearances – To make the registration process as well as

clearance and granting of licenses a hassle-free process, DICs provide a

single-window mechanism to achieve this goal.

● Rehabilitation of sick SSI units – To revive and to better the ailing Small Scale

Industrial units, DIC plays an important role.

● Recommendation of awards to the SSI units – The awards granted to SSI units

are done on the recommendation of DICs.

● Recommendation of loan application to banks under the KVIC scheme – DICs

play an important role in making recommendations to banks for grants of

District Industries Centre FAQs:

1. What are some of the additional functions of the District

Industries Centre?
Some of the additional functions of the District Industries Centre are:- 1. Arrangement of loan 2.
Undertakes some training courses 3. Aiding in the acquirement of machinery and equipment 4.
Conducting Surveys 5. Promotion of rural artisans

2. What is the limit on financial assistance provided by the

government on recurring establishments?
On the recurring establishments it is upto a maximum of 70% of actual total expenditure,
maximum upto Rs. 3.75 lakh.

3. For non-recurring grant and construction of office for the

District Industries Centre what is the limit for financial
assistance offered by the Government of India?
For non-recurring grant and construction of office for the District Industries Centre the limit for
financial assistance offered by the Government of India is upto a maximum of 2 lakhs.
4. For non-recurring grants and for meeting the office
expenditure for the District Industries Centre what is the limit
for financial assistance offered by the Government of India?
For non-recurring grants and for meeting the office expenditure for the District Industries Centre
the limit for financial assistance offered by the Government of India is upto a maximum of 2
lakhs.

5. What are the documents required for getting a DIC

certificate?
Below mentioned are the documents required for getting a DIC certificate:- 1. Aadhar Number. 2.
Address of the business 3. Bank account details 4. Name of the business 5. Date of starting the
business 6. Main activity for starting the business 7. Type of business like company or LLP or
proprietorship. 8. Number of employees 9. Investment of Business 10. Account Number

6. Who would be eligible for a DIC loan?

Any applicant who is at least above 18 years. The person must have passed the 8th standard.
The manufacturing project must be costing above Rs 10 lakh whereas it must be costing above
Rs 5 lakh for the service or business sector.

7. State the process of getting a DIC loan

The process of getting a DIC loan is as follows:- ● Step 1: Fill up the necessary information in the
application form. ● Step 2: Save the application as a draft application. ● Step 3: Get a printout. ●
Step 4: Go to the nearest office to submit the application form.

8. What is the rate of interest for getting a DIC loan?

The rate of interest varies upon the scheme chosen. It generally lies between 4% to 10%.

9. What is the repayment tenure for a DIC loan?

The repayment tenure is up to a maximum of 10 years.

10. How much would be a promoter’s contribution for a DIC

loan?
The promoter’s contribution can lie between 2% to 10% but it depends on the scheme chosen.

Pradhan Mantri Yuva Yojana (PMYY)

The young citizens of the country are the future of the country who will
take India to a brighter and successful potion in the world. So it is
important that the youth of the country is made strong and trained in a
way that they can get involved in progressive activities. For this to happen
it is important that government id India proves the youth of the country
with full support and creates and better environment for young
entrepreneurs. Keeping this in mind the PMYY has been launched by the
government of India.

S.No Things Need to Know Details

1 Name of the scheme Pradhan Mantri Yuva Yojana

2 Scheme launched by Ministry of Skill Development and

Entrepreneurship under the
leadership of Prime Minister Narendra
Modi

3 Objective of the scheme Provide entrepreneurship training to

then youth of the country

4 Target group for the Youth of the country

scheme

5 Scheme launch date November 2016

The PMYY is a flagship scheme of the Ministry of Skill Development and

Entrepreneurship and under this scheme the Ministry will impart
entrepreneurship education to the youth of the country in the coming five
years.

Objective of the scheme

This scheme is in par with the Prime Minister’s dream of creating an India
where youngsters do not search for jobs but instead are the ones to
create more job opportunities. So to help the youth of the country in
becoming successful entrepreneurs, the Ministry has decided to partner
with various institutions and to impart entrepreneurship education and
training to the youth. By doing so the youth will be able to open up and
manage own businesses and will slowly the country will overcome the
problem of unemployment.

So the Ministry of Skill Development and Entrepreneurship, for the

coming five years, will conduct training programs through the online
medium to train the youngsters for entrepreneurship.

Features of the scheme

Here are some of the important features of the scheme that have been
announced by the Ministry.

· The scheme will be effective for the coming five year which means
from the financial year 2016-17 till the financial year 2020-21. It has
been estimated that the total cost of the project would be around
Rs.499.94 crore.
· The Ministry has targeted to reach out to around 7 lakh students
across the country and train then with the help of 3050 institutes that
the Ministry will partner with.
· It was revealed during the launch that two of the institutes that were
a part of this Yojana are NIESBUD and IIE. These two institutions have
provided entrepreneurship training to over 7 lakh student across the
world
· For imparting entrepreneurship education to the students around
2200 institutes of higher learning, 500 ITIs, 50 entrepreneurship
development centers and 300 schools will be made a part of this Yojana.
Together massive Open Online courses platform will be created and the
students will be trained.
· It is being planned that the state governments of the country will be
given Rs.7000 crore so that they can team up with the local skill
development centers of their state for this Yojana.
· To make this Yojana successful it has been said that the state has to
coordinate with the center in order to maintain the standards of training
under this Yojana. Also the Sector Skill Councils will work together with
the local authorities in order to figure out job aggregation.
 · Under this scheme the students who want to become entrepreneurs
will be provided with a convenient access to the information and
mentoring network that will be created as a part of this scheme.

The Government of India is of the view that creating entreprenurs in the

cuntry will lead to the economic development of the country and thus
lead to the social development of the coutry. So the ebst efforts will be
made to impart entrepreneurship training.

Launch of the scheme

On the event that was condtued to mark the second foundation day of the
Minsitry of Skill Development and Entrepreneurship, the PMYY was
launched by the head of the Ministry. The main obejctive of the Minsitry
and this Yojana remains to train youngsters and encourage them to
become entrepreneurs.

By doing so, the startup businesses in the nation would face rapid growth
and it would be perfect solution to deal the problem of unemployment.

The PMYY will be in active for how Five years (2016 – 2021)
many years?

Estimated Cost for offering Rs. 500 Crore

sufficient infrastructure for this
scheme

Estimated number of youths will Around 7 – 8 Lakh potential youths

get trained under this scheme across the nation

Number of Institutions about to Around 3000 Institutes across the

amend under this scheme nation

The Minister of the Skill Develoment and Entrepreneurship deparment

said that intitiative would bring together interantional and national
learning practices together inorder to imaprt entrepreneurship education
to the younsters of the country so that promisiing entrepreneurs can be
produced after the training. He also said that the institutions involved in
this Yojana have been successful so far and he is hoping that in the
coming years these institutes will produce some of the best entrepreneurs
of the country in the coming five years.

On the launch event Rajiv Pratap Rudy also launched the Pradhan Mantri
Kaushal Vikas Yojana 2.0 and announced the guidelines for it. Certain
allocations of funds were also made for this scheme on the launch event.

Conclusion:

With such effective scheme of boosting young and talented adults across
nation to guide them towards the entrepreneurship would surely create a
positive impact on nation economic growth. Experts across the nation
suggest that government must take intensive care on processing the
scheme effectively.

Indian Financial System – An Overview

The services that are provided to a person by the various Financial Institutions including banks,
insurance companies, pensions, funds, etc. constitute the financial system.

Given below are the features of the Indian Financial system:

● It plays a vital role in the economic development of the country as it encourages both
savings and investment
● It helps in mobilising and allocating one’s savings
● It facilitates the expansion of financial institutions and markets
● Plays a key role in capital formation
● It helps form a link between the investor and the one saving
● It is also concerned with the Provision of funds

Other Related links:

Types of Banks in India Functions of Banks Types of Bank Accounts

SSC General Awareness Principles of Insurance Type of Cheques

The financial system of a country mainly aims at managing and governing the mechanism of
production, distribution, exchange and holding of financial assets or instruments of all kinds.

Further below in this article, we shall discuss the various components of the financial system in
India.
Components of Indian Financial System

There are four main components of the Indian Financial System. This includes:

1. Financial Institutions
2. Financial Assets
3. Financial Services
4. Financial Markets

Let’s discuss each component of the system in detail.

1. Financial Institutions
The Financial Institutions act as a mediator between the investor and the borrower. The
investor’s savings are mobilised either directly or indirectly via the Financial Markets.

The main functions of the Financial Institutions are as follows:

● A short term liability can be converted into a long term investment

● It helps in conversion of a risky investment into a risk-free investment
● Also acts as a medium of convenience denomination, which means, it can match a small
deposit with large loans and a large deposit with small loans

The best example of a Financial Institution is a Bank. People with surplus amounts of money
make savings in their accounts, and people in dire need of money take loans. The bank acts as
an intermediate between the two.

The financial institutions can further be divided into two types:

● Banking Institutions or Depository Institutions – This includes banks and other credit
unions which collect money from the public against interest provided on the deposits
made and lend that money to the ones in need
● Non-Banking Institutions or Non-Depository Institutions – Insurance, mutual funds and
brokerage companies fall under this category. They cannot ask for monetary deposits but
sell financial products to their customers.

Further, Financial Institutions can be classified into three categories:

● Regulatory – Institutes that regulate the financial markets like RBI, IRDA, SEBI, etc.
● Intermediates – Commercial banks which provide loans and other financial assistance
such as SBI, BOB, PNB, etc.
● Non Intermediates – Institutions that provide financial aid to corporate customers. It
includes NABARD, SIBDI, etc.

2. Financial Assets
The products which are traded in the Financial Markets are called Financial Assets. Based on the
different requirements and needs of the credit seeker, the securities in the market also differ
from each other.

Some important Financial Assets have been discussed briefly below:

 ● Call Money – When a loan is granted for one day and is repaid on the second day, it is
called call money. No collateral securities are required for this kind of transaction.
● Notice Money – When a loan is granted for more than a day and for less than 14 days, it
is called notice money. No collateral securities are required for this kind of transaction.
● Term Money – When the maturity period of a deposit is beyond 14 days, it is called term
money.
● Treasury Bills – Also known as T-Bills, these are Government bonds or debt securities
with maturity of less than a year. Buying a T-Bill means lending money to the Government.
● Certificate of Deposits – It is a dematerialised form (Electronically generated) for funds
deposited in the bank for a specific period of time.
● Commercial Paper – It is an unsecured short-term debt instrument issued by
corporations.

3. Financial Services
Services provided by Asset Management and Liability Management Companies. They help to get
the required funds and also make sure that they are efficiently invested.

The financial services in India include:

● Banking Services – Any small or big service provided by banks like granting a loan,
depositing money, issuing debit/credit cards, opening accounts, etc.
● Insurance Services – Services like issuing of insurance, selling policies, insurance
undertaking and brokerages, etc. are all a part of the Insurance services
● Investment Services – It mostly includes asset management
● Foreign Exchange Services – Exchange of currency, foreign exchange, etc. are a part of
the Foreign exchange services

The main aim of the financial services is to assist a person with selling, borrowing or purchasing
securities, allowing payments and settlements and lending and investing.

4. Financial Markets
The marketplace where buyers and sellers interact with each other and participate in the trading
of money, bonds, shares and other assets is called a financial market.

The financial market can be further divided into four types:

● Capital Market – Designed to finance the long term investment, the Capital market deals
with transactions which are taking place in the market for over a year. The capital market
can further be divided into three types:

(a)Corporate Securities Market

(b)Government Securities Market

(c)Long Term Loan Market

● Money Market – Mostly dominated by Government, Banks and other Large Institutions,
the type of market is authorised for small-term investments only. It is a wholesale debt
 market which works on low-risk and highly liquid instruments. The money market can
further be divided into two types:

(a) Organised Money Market

(b) Unorganised Money Market

● Foreign exchange Market – One of the most developed markets across the world, the
Foreign exchange market, deals with the requirements related to multi-currency. The
transfer of funds in this market takes place based on the foreign currency rate.
● Credit Market – A market where short-term and long-term loans are granted to
individuals or Organisations by various banks and Financial and Non-Financial
Institutions is called Credit Market

Aspirants for various Government exams can check the syllabus for respective exams at the
links mentioned below:
UNIT III
PROJECT MANAGEMENT :

1. BUSINESS IDEA GENERATION TECHNIQUES

18 Idea Generation Techniques That Don't Include Brainstorming

Published August 19, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and
subject matter experts equipped with Indeed's data and insights to deliver useful tips to help
guide your career journey.

Idea generation techniques can be helpful in many problem-solving, product development or

innovation-based work processes. A common form of idea generation is brainstorming.
While brainstorming is a good method for listing various solutions to problems or beginning
the creative process, you can consider using other techniques in some situations. In this
article, we discuss various idea generation techniques besides brainstorming and why you
could use them to help you think in innovative ways.

What are idea generation techniques?

Idea generation techniques are activities and approaches that can help people process and
analyze their thoughts in order to think of new inventions, solutions or designs. You can use
these techniques in both individual and group settings. These techniques may also involve
tools like computers, whiteboards or paper to help you compile your thoughts. Some methods
require group discussions, which you can choose to do aloud or through written
communication.
Related: 25 Brainstorming Techniques for Problem-Solving and Planning

Why use idea generation techniques?

These techniques are beneficial for individuals and teams to generate new designs or make
progress on projects. They can help promote creative thought in a simple and
easy-to-understand format. Idea generation techniques can produce a wide variety of diverse
ideas that can assist you in overcoming creative blocks. Using these techniques can also
ensure that you or your team considers all different ideas carefully before the initiation of a
project or production.

18 idea generation techniques besides brainstorming

Here's a list of 18 alternative brainstorming techniques:

1. Reverse brainstorming

While the process of brainstorming is the generation of ideas to identify problem-solving

methods, reverse brainstorming starts with thinking about the causes of that problem.
Focusing on the causes of the problem may sometimes be more efficient than focusing on the
solution. By finding potential causes, you can work proactively to resolve or prevent the
cause of the problem. Often, teams use reverse brainstorming to improve products and
services.

2. Brainwriting

A brainwriting activity is typically most effective in a group setting. Start by writing a topic
on a piece of paper. Then, pass the paper around the group so that everyone has a turn to
write on it and contribute their ideas to the central topic or question. The ideas of one group
member can inspire the ideas of another, or someone may choose to improve upon an existing
one.

3. Brain netting

Brain netting involves the use of cloud-based documents or programs for groups to share and
collaborate. This form of brainstorming can be quite interactive with the addition of links,
videos and images to provide visual representations and context. Using an online program
also works when working with a team either live or remotely, which could be beneficial for
those collaborating within different time zones.

4. Forced relationships

The forced relationships method introduces two random and seemingly unrelated items and
forces you to create a connection between them. This technique encourages innovative
thinking in order to build those relationships and possibly develop a new product. You can
conduct forced relationship activities in group settings or individually.

5. Role-storming

Role-storming is brainstorming with the added element of role-playing. To bring out new
perspectives and different ideas, participants could imagine that they're in a different role in
relation to the brainstorming goal. They could pretend they're a client or manager assessing
the same goal and ask themselves what improvements to implement.

6. Storyboarding

Develop a storyboard by finding pictures, quotes and other visual information associated with
the focus of your brainstorming. Then, you could arrange these items to create a narrative and
add notes to help explain the progression of the ideas. Storyboarding can be a more
interactive method when searching for physical items to add to the board. The physical aspect
of seeking and building can allow your brain to process the visual information in front of you
at a faster rate.

7. Five whys

This method often begins with a real or hypothetical problem that you could address with
your team. You would ask them why a problem happens or is happening. After the initial
round of responses and forming an answer, a facilitator asks again and again until the fifth
time. The reason for asking the same question five times is to find deeper answers, as the first
response is typically more shallow.

8. Six thinking hats

You can use this technique with groups of at least six people. Each participant represents a
"thinking hat," or different thought focuses, such as benefits, emotions, facts, ideas, judgment
and planning. With these mindsets, each person addresses the topic or problem from that
standpoint.

9. S.C.A.M.P.E.R.

S.C.A.M.P.E.R. stands for substitute, combine, adapt, modify, put to another use, eliminate
and reverse. This acronym is essentially a question checklist to prompt your ideas. It asks you
to consider factors like substituting a variable for another, combining one with another or
adapting a variable to a different context. This method helps you think critically and consider
creative approaches from several angles.

Related: 10 Ideation Techniques for Problem-Solving

10. S.W.O.T. analysis

S.W.O.T. is an acronym for strengths, weaknesses, opportunities and threats. You can usually
use this method individually or with a team to assess the worth of proposed projects. You
could ask what the strengths, weaknesses, opportunities and threats are for a particular project
to help decide if you should proceed with it.

11. Group sketching

In this method, each group member passes around a piece of paper to sketch something
related to a central concept or related to another sketch on the paper. Once the entire group
has completed sketching, discuss the images and form connections between them. Visually
thinking and creating can give a form to the group's ideas in a way that they can then interpret
a plan or design.

Related: 6 Steps Your Team Can Take for an Effective Brainstorming Process

12. Word banking

Word banking is similar to other word association activities but conducted on a larger scale
with the volume of words and phrases involved. While word association is relating one word
to another, you can form bigger word sets with word banking. You can associate more than
one word with another and group those words to identify patterns and connections. This
method can help solidify abstract ideas by finding a common objective or purpose that can
initiate the beginning of a project.

13. Wishing

This method asks for participants to wish for solutions to a given problem. These solutions
can be impractical or unattainable, but your team can still discuss potential ways to make
them happen. You could develop the ultimate solution to the problem by analyzing what
aspects of each wish they can use or integrate into the actual solution.

14. Gap filling

Gap filling begins with a statement of your starting point with a project or problem. Then,
you'd state your final goal and begin thinking of what you can do to fill the gap between the
start and endpoints. Initial responses are often more general, but through multiple processes
of filling gaps, you can identify specific resolutions.

15. Rapid ideation

With this technique, ask your group to write ideas individually within a time constraint. They
would all write as many ideas as possible on their own pieces of paper. Once the time is over,
they can share their ideas aloud or the group leader can collect them. When reviewing the
responses, there may be some common ideas between the group that can provide insight into
ideas that they can develop further.

16. Trigger storming

Trigger storming provides more specific prompts or "triggers" for a group to discuss. These
prompts can be open-ended sentences for the group to finish or evocative or abstract
statements that can inspire or provoke new thoughts. You can do this method aloud or on
paper.
17. "What if"

The "what if" method introduces scenarios to encourage creative thinking. When facing a
problem, you could reframe it using "what if" questions to analyze the problem from a
different perspective. Some examples of these questions could be:

● "What if we gave this problem to an artist rather than an engineer to solve?"

● "What if this problem happened at the end of the fiscal year?"

18. Zero draft

Writers often use zero drafting as a variation of freewriting. Starting with a topic, you'd write
everything you know about it, what you want or need to know and why the topic is important.
You could then add other ideas that come to mind while writing. This method can also be
beneficial for those with writer's block in order to develop thoughts freely, but with a few
prompts to guide them.

3. How To Identify A Business Opportunity?

Opportunity identification is an important part of business development and growth. It allows

companies to make the right decisions that will help them achieve their goals.

Here’s the business opportunity identification process:

The Customer Research Stage

The first step is to research customers and their problems by asking questions related to the
customer’s needs, goals, and expectations.

This involves collecting, organising, and analysing information about customers’ behaviour
as well as their needs.

The past and present trends of the target market must also be identified to help businesses
better understand customer preferences.

The objective is to identify potential business opportunities that can help the business create
value for its customers.
Problem Hypothesis Stage

In this stage, businesses search for problems by identifying issues and concerns from
customer feedback and other sources of market research. The first step is to define the
problem.

Once that has been done, businesses need to search for the root cause of the problem and
explore possible solutions. The goal is to formulate a well-focused hypothesis that can be
tested with market research.

Product Hypothesis Stage

Businesses should determine what kind of product or service will solve customers’ problems
or address their needs. The product or service should target specific customers based on the
information gathered during the customer research stage.

Market Hypothesis Stage

The market hypothesis stage involves testing certain key assumptions about the business
opportunity with customers to determine the demand for a particular product or service in the
real world, and how it solves problems in the specified market.

It also involves doing in-depth research to identify existing players in the targeted market,
and determining customer expectations for the product or service.

Product Development Stage

Once a business opportunity is confirmed, the next step is to develop a product or service that
will solve the problem.

The product or service should be designed and tested using various methods to ensure its
viability and effectiveness.

Businesses need to consider their target market, competitive threats, and business models as
they develop the product or service.
Business Opportunity Examples

Business opportunities are everywhere, and it is important for businesses to identify and tap
into them. For example, Uber found a business opportunity in the unorganised transportation
industry by introducing an on-demand cab system.

There are also many other examples of great business opportunities:

● Airbnb: Airbnb introduced the concept of sharing economy by allowing

people to rent out their homes as an alternative to hotels or motels. This is a
perfect example of a new market opportunity because hotels were the only
service providers for this kind of accommodation before Airbnb came along.
● GoPro: GoPro is a new camera brand that saw an opportunity to introduce a
unique product in the market where smartphone cameras and existing digital
cameras were already popular. It catered to a repressed demand of capturing
high-definition videos of sports activities, something traditional cameras were
not capable of doing.
● TikTok: TikTok saw an opportunity in the music and video streaming market
by introducing a unique take that allows users to create 15-second videos set to
music. It found a repressed demand of getting recognised and untapped
technology of user-generated video content.
● Crate and Barrel: Crate and Barrel saw an opportunity to introduce a unique
concept in the furniture industry by selling ready-to-assemble furniture. This is
different from other players in the market who only sold expensive,
high-quality pieces of furniture.

Business Opportunity Vs Business Idea

A business opportunity is different from a business idea; the latter is based on the former.

Business opportunities are identified when companies find issues or problems in existing
markets, untapped needs, untapped technologies, customer feedback, market research and
other sources of information.

Business ideas are typically created through creative thinking by entrepreneurs who try to
capitalise on business opportunities by exploring ways to solve certain problems.
3. Feasibility Study and Its Importance in Project Management

What is a Feasibility Study?Understanding A Feasibility StudyTypes of Feasibility

StudyImportance of Feasibility StudyBenefits of a Feasibility Study

The growth and recognition of project management training have changed

significantly over the past few years, and these changes are expected to continue and
expand. And with the rise of project management comes the need for a feasibility
study.

It can be thrilling to start a complex, large-scale project with a significant impact on

your company. You are creating real change. Failure can be scary. This article will
help you get started if you have never done a feasibility study on project
management.

What is a Feasibility Study?

A feasibility study is a comprehensive evaluation of a proposed project that evaluates

all factors critical to its success in order to assess its likelihood of success. Business
success can be defined primarily in terms of ROI, which is the amount of profits that
will be generated by the project.

In a feasibility study, a proposed plan or project is evaluated for its practicality. As

part of a feasibility study, a project or venture is evaluated for its viability in order to
determine whether it will be successful.
As the name implies, a feasibility analysis is used to determine the viability of an
idea, such as ensuring a project is legally and technically feasible as well as
economically justifiable. It tells us whether a project is worth the investment—in
some cases, a project may not be doable. There can be many reasons for this,
including requiring too many resources, which not only prevents those resources
from performing other tasks but also may cost more than an organization would earn
back by taking on a project that isn’t profitable.

A well-designed study should offer a historical background of the business or project,

such as a description of the product or service, accounting statements, details of
operations and management, marketing research and policies, financial data, legal
requirements, and tax obligations. Generally, such studies precede technical
development and project implementation.
Understanding A Feasibility Study

Project management is the process of planning, organizing, and managing resources

to bring about the successful completion of specific project goals and objectives. A
feasibility study is a preliminary exploration of a proposed project or undertaking to
determine its merits and viability. A feasibility study aims to provide an independent
assessment that examines all aspects of a proposed project, including technical,
economic, financial, legal, and environmental considerations. This information then
helps decision-makers determine whether or not to proceed with the project.

The feasibility study results can also be used to create a realistic project plan and
budget. Without a feasibility study, it cannot be easy to know whether or not a
proposed project is worth pursuing.

Types of Feasibility Study

A feasibility analysis evaluates the project’s potential for success; therefore,

perceived objectivity is an essential factor in the credibility of the study for potential
investors and lending institutions. There are five types of feasibility study—separate
areas that a feasibility study examines, described below.

1. Technical Feasibility

This assessment focuses on the technical resources available to the organization. It

helps organizations determine whether the technical resources meet capacity and
whether the technical team is capable of converting the ideas into working systems.
Technical feasibility also involves the evaluation of the hardware, software, and other
technical requirements of the proposed system. As an exaggerated example, an
organization wouldn’t want to try to put Star Trek’s transporters in their
building—currently, this project is not technically feasible.

2. Economic Feasibility

This assessment typically involves a cost/ benefits analysis of the project, helping
organizations determine the viability, cost, and benefits associated with a project
before financial resources are allocated. It also serves as an independent project
assessment and enhances project credibility—helping decision-makers determine the
positive economic benefits to the organization that the proposed project will provide.
 3. Legal Feasibility

This assessment investigates whether any aspect of the proposed project conflicts
with legal requirements like zoning laws, data protection acts or social media laws.
Let’s say an organization wants to construct a new office building in a specific
location. A feasibility study might reveal the organization’s ideal location isn’t zoned
for that type of business. That organization has just saved considerable time and
effort by learning that their project was not feasible right from the beginning.

4. Operational Feasibility

This assessment involves undertaking a study to analyze and determine

whether—and how well—the organization’s needs can be met by completing the
project. Operational feasibility studies also examine how a project plan satisfies the
requirements identified in the requirements analysis phase of system development.

5. Scheduling Feasibility

This assessment is the most important for project success; after all, a project will fail
if not completed on time. In scheduling feasibility, an organization estimates how
much time the project will take to complete.

When these areas have all been examined, the feasibility analysis helps identify any
constraints the proposed project may face, including:

● Internal Project Constraints: Technical, Technology, Budget, Resource, etc.

● Internal Corporate Constraints: Financial, Marketing, Export, etc.
● External Constraints: Logistics, Environment, Laws, and Regulations, etc.

MARKETING FEASABALITY

Most companies tend to utilise these 8 stages of

new product development process:

1. Idea Generation
The inception of every new product starts with an idea. And to generate the ideas,
companies can focus on customer demands and needs. Alternatively, they can also
focus on analysing the choices of their competitors. Understanding why the products
of the competitors are selling well can increase the odds of success for any new
products that a company launches. Lastly, some companies turn to creative minds in
the upper management for ideas. One of the most famous new product development
examples would be the products developed by the late Steve Jobs of Apple. Steve
Jobs was famous for steering his company through new product developments (i.e.
iPod, Macbook, iPhone, etc.) with incredible success.

2. Idea Screening
Not every idea is suitable to become a product. For that reason, companies have to
screen the ideas. Companies can label an idea as promising and act on it, marginal
and try to improve it, or simply poor and reject it. It is also very important for
companies to avoid any bias related to the source of the idea. So even if someone
like Steve Jobs pitches an idea, the company should still be very careful with it.

3. Product Development Process

During the third stage of product development, the product idea grows into multiple
concepts. Companies will repeat the screening process to choose the best of them
and pit them against each other. Most companies will introduce their concepts to
focus groups and analyse their reactions. The products that do the best in front of
the focus groups or test consumers go into development.

4. Marketing Strategy
Once a company decides on the product, they will have to spend time developing a
marketing strategy for it. Experts will evaluate the size of the market, demand for the
product, and revenue estimates. The marketing team will get a budget for their
efforts and they can select distribution channels.

5. Business Model
The development of a business model works very similarly to the development of a
marketing strategy. The experts in the company will estimate the costs and profits
and manage the potential of the product. Also, they will estimate the economic
feasibility of the new product.

6. Manufacture
One of the last stages of product development is where production finally begins.
The company will make multiple prototypes and choose on which designs get to go
to the next stage. Also, the company will, once again, perform a cost analysis to see
if it matches the estimates. And if the costs go above the higher-end estimates, the
company might abandon the project.

7. Branding
Once the company finally has a physical product in their hands, the marketing team
can get to work. For starters, they can develop the brand name, packaging, and the
marketing message behind the product. They will also determine the price of the
product.

8. Product Launch
The last stage of new product development is the commercialisation phase. The
product is launched, and it is followed by a developed marketing strategy in order to
maximise its earning potential.

FINANCIAL & ECONOMIC FEASABILITY

What Is Break-Even Analysis?

Break-even analysis is the relationship between cost volume and profits at various
levels of activity, with an emphasis placed on the break-even point. This point is
where the business receives neither a profit nor a loss when the total money
received from sales is equal to the total money spent to produce the items for sale.

An example of a break-even analysis.

Advantages and Uses

Break-even analysis enables a business organization to:

1. Measure profit and losses at different levels of production and sales.

2. Predict the effect of changes in sales prices.
3. Analyze the relationship between fixed and variable costs.
4. Predict the effect of cost and efficiency changes on profitability.

Disadvantages
Even with its advantages and uses, there are also several demerits of break-even
analysis.

1. Assumes that sales prices are constant at all levels of output.

2. Assumes production and sales are the same.
3. Break-even charts may be time-consuming to prepare.
4. It can only apply to a single product or a single mix of products.

Formulas

There are two ways to calculate the break-even point, in units and sales revenue.

1. The first way is to divide the fixed cost by the contribution per unit. This gives
the result in units.
2. Divide the fixed cost by the contribution-to-sales ratio. This gives the sales
revenue. The contribution-to-sales ratio is given by dividing the contribution
per unit by the selling price per unit.

Example of a Break-Even Point

ABC Ltd expects to sell 10,000 units at $10 each. The variable cost per unit is $5
and the fixed cost is $15,000 per annum. Calculate the break-even point in units and
sale revenue.

● To calculate the break-even point in units, use the formula-fixed cost divided
by the contribution per unit. In this example, you would divide $1,000 by
contribution (which is the selling price of $10 minus the variable cost per unit
of $5). $15,000 divided by $5 is 3000 units
● To calculate the break-even point in sales revenue, divide the fixed cost by the
contribution-to-sales ratio. In this example, $15,000 divided by ($5 divided by
$10, or .5). The final answer is $30,000. We know this is the correct answer
because when we multiply the break-even point in units by the selling price,
we get the same answer.
Creating a Break-Even Chart With a Business Example

Fictional Company

Unit selling price: $36

Unit variable expenses: $28

Total fixed expenses: $50,000

Actual sales: 7,000 units

A break-even chart is a graphical representation of the break-even point, profits,

losses, and margin of safety. Using information from the example above, we will
create a chart that shows:

● fixed cost
● total revenue line
● margin of safety
● loss region
● total cost line
● break-even point
● profit region
What Is a Make-or-Buy Decision?
A make-or-buy decision is an act of choosing between manufacturing a
product in-house or purchasing it from an external supplier.

Also referred to as an outsourcing decision, a make-or-buy decision

compares the costs and benefits associated with producing a necessary
good or service internally to the costs and benefits involved in hiring an
outside supplier for the resources in question.

To compare costs accurately, a company must consider all aspects

regarding the acquisition and storage of the items versus creating the items
in-house, which may require the purchase of new equipment, as well as
storage costs.

What Is Economic Order Quantity (EOQ)?

Economic order quantity (EOQ) is a calculation companies perform
that represents their ideal order size, allowing them to meet demand
without overspending. Inventory managers calculate EOQ to minimize
holding costs and excess inventory.

It doesn’t matter if your business sells jelly beans, appliances,

furniture or airplanes. Finding the economic order quantity for every
product you purchase is almost certain to impact the bottom line.
Every business that manages inventory can benefit from measuring
and following the EOQ.

What Does Economic Order Quantity

(EOQ) Tell Businesses?
Economic order quantity tells businesses the ideal order size for every
product they buy. The EOQ formula assumes annual demand for a product
is relatively flat. If you are in a growing business, EOQ may not be the best
way to calculate your order size, as those numbers could change
frequently.

Once you work through EOQ, you should know the optimal number of
orders per year and the ideal order size. You may adapt the EOQ model to
factor in pricing discounts, backorders, defective items and more.

With your EOQ results, you should have an optimal supply chain order
schedule for the entire year.

Benefits of Economic Order Quantity

(EOQ)
The main benefit of using EOQ is improved profitability. Here’s a list of
benefits that all add up to savings and improvements for your business:

● Improved Order Fulfillment: When you need a certain item or

something for a customer order, optimal EOQ ensures the product is
on hand, allowing you to get the order out on time and keep the
customer happy. This should improve the customer experience and
may lead to increased sales.
● Less Overordering: An accurate forecast of what you need and
when will help you avoid overordering and tying up too much cash in
inventory.
● Less Waste: More optimized order schedules should cut down on
obsolete inventory, particularly for businesses that hold perishable
inventories that can result in dead stock.
● Lower Storage Costs: When your ordering matches your demand,
you should have less products to store. This can lower real estate,
utility, security, insurance and other related costs.
 ● Quantity Discounts: Planning and timing your orders well allows
you to take advantage of the best bulk order or quantity discounts
offered by your vendors.

PLANT LOCATION

Every entrepreneur is faced with the problem of deciding the best site for location of his
plant or factory. What is plant location? Plant location refers to the choice of region and the
selection of a particular site for setting up a business or factory. But the choice is made only
after considering cost and benefits of different alternative sites. It is a strategic decision that
cannot be changed once taken. If at all changed only at considerable loss, the location
should be selected as per its own requirements and circumstances. Each individual plant is
a case in itself. Businessman should try to make an attempt for optimum or ideal location.
What is an ideal location? An ideal location is one where the cost of the product is kept to
minimum, with a large market share, the least risk and the maximum social gain. It is the
place of maximum net advantage or which gives lowest unit cost of production and
distribution. For achieving this objective, small-scale entrepreneur can make use of
locational analysis for this purpose.

PLANT LAYOUT
The efficiency of production depends on how well the various machines; production facilities
and employee’s amenities are located in a plant. Only the properly laid out plant can ensure
the smooth and rapid movement of material, from the raw material stage to the end product
stage. Plant layout encompasses new layout as well as improvement in the existing layout. It
may be defined as a technique of locating machines, processes and plant services within the
factory so as to achieve the right quantity and quality of output at the lowest possible cost of
manufacturing. It involves a judicious arrangement of production facilities so that workflow is
direct

What Is Market Orientation location?

Market orientation is an approach to business that prioritizes identifying the
needs and desires of consumers and creating products and services that
satisfy them. Companies that have a market orientation consider the
opinions and needs of their target market as a critical component of their
research and development (R&D) for new products.

It may sound obvious, but advocates of market orientation argue that the
conventional approach to product development is the opposite. That is,
marketing strategies focus on establishing key selling points to promote
existing products rather than designing products that have the qualities
consumers say they want.
Example: pepsi and coca cola

Material oriented location

Layout

Cost benefit analysis

Legal feasibility

Project appraisal

Critical Path Method

Definition: The Critical Path Method or CPM is a network analysis
technique concerned with planning and controlling of complex, but routine
projects. Simply, Critical path method is generally used for the projects
whose time duration is known with certainty and also the amount of
resources required for the completion of the project is assumed to be
known.

First of all, the activities comprised in a project are identified along with
their importance, i.e. the dependency of activities on each other. For each
activity, it is identified that which other activities are required to be
completed before it starts and how long the activities takes to get finished.

Once the critical activities are identified, the network is drawn connecting all
the crucial activities and depicting which activity to be carried first, so that
successor activities could be performed effectively. For each activity the
following parameters need to be determined:

● Earliest start time (ES): How early, the successor activity begins once
the predecessor activity finishes.
● Earliest Finish Time (EF): Earliest Start Time + duration of each
activity.
 ● Latest Finish Time (LF): The latest time within which the activity
finishes without delaying the project.
● Latest Start Time (LS): Latest Finish Time – Activity duration

The critical path method follows the “activity-on-arc” diagram to illustrate a

critical path of activities (as shown below). This diagram comprises of a
numbered nodes that represent the stages required for the project
completion while the arc shows the crucial activities as identified earlier.

The Critical Path method is deterministic in nature, since the required

amount of resources and the time needed for the completion of the whole
project is known, and is mainly used in the construction projects. This
method was developed by Du Pont Company and the Univac Division of
Remington Rand Corporation as a technique for controlling the
maintenance of chemical plants.

What is Program Evaluation

Review Technique (PERT)?
The Program Evaluation Review Technique, or PERT, is a visual tool used
in project planning. Using the technique helps project planners identify start
and end dates, as well as interim required tasks and timelines. The
information is displayed as a network in chart form.

PERT helps project planners identify:

● Start and end dates

● Anticipated total required completion time
● All activities, referred to as events on the chart, that impact the
completion time
● The required sequence of events
● The probability of completion by a certain date

The PERT Process

PERT has a set series of steps in mapping out a complex project, which
include:

1. List all the tasks and milestones (a.k.a. events) required for
completion of the project
2. Determine the required sequence of tasks
3. Design a chart to visually display all the steps
4. Estimate the time required for each task
5. Identify the critical path – the longest series of tasks in the project
6. Adjust the chart to reflect progress made once the project starts

A PERT chart uses numbered circles or rectangles to represent milestones

and straight lines with arrows at the end to represent tasks to be
completed. The direction of the arrows, and the numbers, indicate the
required sequence. Typically, the numbers increase by 10 at each
milestone, so that new tasks can be added along the way without requiring
the whole chart to be redrawn and numbered.

History
PERT was developed by the U.S. Navy in the 1950s to help coordinate the
thousands of contractors it had working on myriad projects.

While PERT was originally a manual process, today there are

computerized PERT systems that enable project charts to be created
quickly.

The only real weakness of the PERT process is that the time required for
completion of each task is very subjective and sometimes no better than a
wild guess. Frequent progress updates help refine the project timeline once
it gets underway.