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1. What is entrepreneurship? Define and Its Characteristic.

Entrepreneurship is the process by which individuals or a group of individuals (entrepreneurs) exploit a commercial
opportunity, either by bringing a new product or process to the market, or by substantially improving an existing
good, service, or method of production. This process is generally organized through a new organization (a start-up
company), but may also occur in an established small business that undergoes a significant change in product or
strategy (see below on growth).
An entrepreneur is a person who organizes the means of production to engage in entrepreneurship, often under
considerable uncertainty and financial risk. Entrepreneurs may partner with other entrepreneurs to jointly found
companies (co-founders), or with an existing organization (e.g., corporate or university spin-outs).
A start-up company is a business organization that is formed by an entrepreneur or a group of entrepreneurs, which
is used to coordinate the process of entrepreneurship under a common ownership structure.

Willingness to Experiment
Along with curiosity, entrepreneurs require an understanding of structured experimentation, such as design
thinking. With each new opportunity, an entrepreneur must run tests to determine if it’s worthwhile to pursue.

Adaptability
Entrepreneurship is an iterative process, and new challenges and opportunities present themselves at every turn.
It’s nearly impossible to be prepared for every scenario, but successful business leaders must be adaptable.

This is especially true for entrepreneurs who need to evaluate situations and remain flexible to ensure their business
keeps moving forward, no matter what unexpected changes occur.

Decisiveness
To be successful, an entrepreneur has to make difficult decisions and stand by them. As a leader, they’re responsible
for guiding the trajectory of their business, including every aspect from funding and strategy to resource allocation.

Self-Awareness
A great entrepreneur is aware of their strengths and weaknesses. Rather than letting shortcomings hold them back,
they build well-rounded teams that complement their abilities.

In many cases, it’s the entrepreneurial team, rather than an individual, that drives a business venture toward
success. When starting your own business, it’s critical to surround yourself with teammates who have
complementary talents and contribute to a common goal.

Risk Tolerance
Entrepreneurship is often associated with risk. While it’s true that launching a venture requires an entrepreneur to
take risks, they also need to take steps to minimize it.

While many things can go wrong when launching a new venture, many things can go right. According to
Entrepreneurship Essentials, entrepreneurs who actively manage the relationship between risk and reward position
their companies to “benefit from the upside.”

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2. Social Entrepreneurship Startup?

A social startup is a newly established, market-oriented venture committed to solve cultural, environmental and/or
social issues. Rather than being driven by profit, a social startup is committed instead to make the world a better
place. And the only way it can succeed in this is by implementing scalable and repeatable solutions, through solid
and viable business models.

For instance, before becoming notorious worldwide phenomena, social companies such as Specialisterne and
TooGooToGo started as startups too. So nothing’s impossible, as long as you’re able to find a disruptive innovation
with the potential to change the world.

Some key areas of interest for social entrepreneurs might include:

Economic development

Education

Gender equality

Health care

Agriculture

Environmental sustainability

Renewable energy

Community development

Social entrepreneurship can operate as a non-profit, for-profit, or hybrid business (also known as a social
enterprise), depending on the business model that you prefer and the availability of funding.

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3. Define Business Plan

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans
can be of benefit to both startups and well-established companies. For startups, a business plan can be essential
for winning over potential lenders and investors. Established businesses can find one useful for staying on track and
not losing sight of their goals. This article explains what an effective business plan needs to include and how to
write one.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic
information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as
applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

Executive summary: This section introduces the company and includes its mission statement along with relevant
information about the company's leadership, employees, operations, and locations.
Products and services: Here, the company should describe the products and services it offers or plans to introduce.
That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that
could go into this section include production and manufacturing processes, any relevant patents the company may
have, as well as proprietary technology. Information about research and development (R&D) can also be included
here.
Market analysis: A company needs to have a good handle on the current state of its industry and the existing
competition. This section should explain where the company fits in, what types of customers it plans to target, and
how easy or difficult it may be to take market share from incumbents.
Marketing strategy: This section can describe how the company plans to attract and keep customers, including any
anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will
use to get its products or services to consumers.
Financial plans and projections: Established businesses can include financial statements, balance sheets, and other
relevant financial information. New businesses can provide financial targets and estimates for the first few years.
Your plan might also include any funding requests you're making.
2 Types of Business Plans
Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean
startup. According to the U.S. Small Business Administration (SBA), the traditional business plan is the more
common of the two.

Traditional business plans: These plans tend to be much longer than lean startup plans and contain considerably
more detail. As a result, they require more work on the part of the business, but they can also be more persuasive
(and reassuring) to potential investors.
Lean startup business plans: These use an abbreviated structure that highlights key elements. These business plans
are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of
plan, it should be prepared to provide more detail if an investor or a lender requests it.

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4. What us Seed Capital Financing

The term seed capital refers to the type of financing used in the formation of a startup. Funding is provided by
private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.
Much of the seed capital a company raises may come from sources close to its founders including family, friends,
and other acquaintances. Obtaining seed capital is the first of four funding stages required for a startup to become
an established business.

Example of Seed Capital

Alphabet, the parent company of Google, provided seed money to the Center for Resource Solutions in 2016 for a
project to implement renewable energy certification programs in Asia. The goal of the San Francisco-based center
is to help businesses buy power from clean sources. The Center for Resource Solutions is a nonprofit organization,
but Google has a business interest in the venture. It is already the world's largest non-utility purchaser of renewable
energy but it wants to power its global data centers, and eventually its entire operations, with renewable energy.

5. Elements of innovation process

1. Strategy – Alignment is key

Every enterprise defines its own value chain within the market and develops strategies to execute within that value
chain. Innovation plays a role in this strategy and ideally enforces it with contributions that enhance the company’s
competitive position or improves its internal effectiveness. The enterprise must target its innovation resources to
align with its overall strategy. It needs to communicate clearly its challenges and articulate objectives for the
solutions it is seeking, so that enterprise resources can focus on delivering innovation targeting those specific
objectives. Within the strategy framework pillar the company has to define success criteria for innovation across
time as well as the criteria for idea selection and program governance. Innovation strategy development falls on
the shoulders of executive leadership.

2. Process and Tools – The foundation for success

Innovation processes and tools must rise to the level of the innovation itself. A suggestion box won’t work. Because
innovation contributors are naturally resistant to inefficient and arcane interaction tools, this aspect of the
framework is ultra important to get right. Investment in the right solution yields substantial results, a high level of
participation and with it, large pools of idea contributions. AT&T, for example, operates one of the largest (with over
120,000 active participants) innovation crowdsourcing platforms and operational systems called the Innovation
Pipeline (or TIP). If implemented internally, the development of such processes and tools is best addressed by
company’s innovation resources (e.g. within the CTO organization), not by the Project Management Office (PMO).
Alternatively, it can be sourced from trusted partners who can integrate the tools and processes in a way that meets
the company’s specific innovation goals.

3. Inducement – A call for leadership

Participation in innovation is key to its success; mass participation is nirvana. Crowdsourcing has proven invaluable
to solving extremely complex problems precisely because of the cumulative effect of mass ideation. Methods to
induce participation vary dramatically across company cultures, but two of the more effective approaches include
broadly publicized contributor recognition (with or without financial reward) and an opportunity by the contributor

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to participate in the execution of the idea throughout its lifecycle. Company leadership, including areas of the HR
organization, has a critical role to play in developing and managing this framework component.

4. Culture – New behaviors and attitudes

The belief system within the company is the component most resistant to change. In all likelihood, the behaviors
and attitudes that prevail have developed over an extended period of time, likely across several management chains
and have been documented to produce certain predictable, albeit unremarkable results. Change in culture
necessary to support peak innovation effectiveness will in most cases be highly disruptive to the organization and
will cause discomfort and possibly displacement.

5. Collaboration –The value of connections

Enterprise innovation must develop connected relationships with external sources of ideas and know how to avoid
the “not-invented-here” pitfall. The most valuable external resources include customers and their corresponding
centers of innovation, but also suppliers, partners, academia, and the general developer community. For
organizations which accept radically open innovation (Gartner Maverick Research – Radical Openness, September
2012 [registration required]), partnerships can extend to virtually all segments of the industry and all willing
participants, including virtual “innovators for hire.” Developing and managing these partnerships most often is best
facilitated through special-purpose teams organized specifically for this mission

6. Bootstrapping Financing

Bootstrapping describes a situation in which an entrepreneur starts a company with little capital, relying on money
other than outside investments. An individual is said to be bootstrapping when they attempt to found and build a
company from personal finances or the operating revenues of the new company. Bootstrapping also describes a
procedure used to calculate the zero-coupon yield curve from market figures.

Assess Bootstrapping Strategies Early

Before bootstrapping their start-up company, business owners should first assess whether bootstrapping makes
sense for their operations. It may not be financially feasible to bootstrap a company that requires high upfront
capital investments to form. Some businesses may also have a slower turnaround of inventory, meaning
bootstrapped cash may be tied up for a longer period of time.

Create a Business Plan

If bootstrapping makes sense, an early step for a business owner is to form a business plan. This business plan
should include a financial budget that outlines the expected cash inflows and outflows for the next few years. A
business owner may decide that at different stages of company growth, a varying amount of capital needs to be
bootstrapped.

Determine Revenue Retention Plan

A critical aspect of the bootstrapping plan is to determine how revenue will be cycled through a company. For
example, during the start-up phase, 100% of operations may be funded by bootstrapped cash until the company
earns revenue from customers. An owner should decide upfront how that revenue will be used (i.e. to channel
business growth, to "reimburse" the owner", etc.). The main risk is extracting cash too soon, not fully developing
the company and leaving both the company and owner at risk of loss.

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Identify Where Resources Will Come From

In order to bootstrap, an owner needs to decide where resources will come from and what options of bootstrapping
they want to pursue. For example, the owner may decide to use their own cash, use their personal line of credit,
use their own time to save capital, or adjust business practices to accommodate the growth period. The business
owner must be mindful that each of these options has its own detriments (i.e. capital may be lost, time can not be
recovered, limited business may stunt company growth).

7. Venture Capital vs Angel Investor

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8. What is Intellectual Property?

IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition
or financial benefit from what they invent or create. By striking the right balance between the interests of innovators
and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can
flourish.

Types:
A patent is an exclusive right granted for an invention. Generally speaking, a patent provides the patent owner with
the right to decide how - or whether - the invention can be used by others. In exchange for this right, the patent
owner makes technical information about the invention publicly available in the published patent document.

Copyright is a legal term used to describe the rights that creators have over their literary and artistic works. Works
covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases,
advertisements, maps and technical drawings.
A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other
enterprises. Trademarks date back to ancient times when artisans used to put their signature or "mark" on their
products.

9. Social Cost Benefit Analysis

So, SCBA, often known as Social Cost-Benefit Analysis in project management, has become a tool for effective
financial evaluation. It is an approach to assessing infrastructure investments from a social (or economic)
perspective. Get to know more from PMP training, which is the most prominent credential in project planning
worldwide.

What is a social cost-benefit analysis? It is a technique used for determining the value of money, specifically public
investments, and it is becoming extremely popular. In addition, it helps in decision-making regarding the numerous
parts of the organization and closely related project design programs.

1. Market Instability

A private corporation would evaluate a deal based on productivity and relevant market prices. However, the
government must consider additional variables. Determining social costs in the event of market inefficiency and
when market pricing cannot specify them. These hidden social costs are referred to as shadow prices.

2. Investments & Savings

A venture that results in increased savings is considered an investment in a market.

3. Income is distributed and redistributed

The initiative should not lead to revenue accumulation in the control of a few and the distribution of income.

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4. Career and Living Standards

The impact of a program on employment and level of livelihood will also be considered. Therefore, the contract
should result in a rise in employment and living standards.

5. Externalities

Externalities can be detrimental and advantageous to an enterprise. As a result, both impacts must be considered
before approving a deal. For example, positive externalities can take the shape of technological advances, while
negative externalities might take the form of rapid urbanization and ecological degradation.

6. Subsidy and Taxation

Taxation and subsidies are treated as expenses and revenue, respectively. However, taxation and subsidy are
regarded as transfer payments for social cost-benefit analysis.

10. Breakeven Points

Breakeven points (BEPs) can be applied to a wide variety of contexts. For instance, the breakeven point in a property
would be how much money the homeowner would need to generate from a sale to exactly offset the net purchase
price, inclusive of closing costs, taxes, fees, insurance, and interest paid on the mortgage—as well as costs related
to maintenance and home improvements. At that price, the homeowner would exactly break even, neither making
nor losing any money.

Companies can use profit-volume charting to track their earnings or losses by looking at how much product they
must sell to achieve profitability. This comparison helps to set sales goals and determine if new or additional product
production would be profitable.

Finding missing expenses. A breakeven analysis can help uncover expenses that you otherwise might not have seen
coming. Your financial commitments will be determined at the end of a breakeven analysis, so there won’t be any
surprises down the line.
Limiting decisions based on emotions. Making business decisions based on emotions is rarely a good idea, but it
can be hard to avoid. A breakeven analysis leaves you with hard facts, which is a better viewpoint from which to
make business decisions.
Setting goals. You will know exactly what kind of goals need to be met to make a profit after a breakeven analysis.
This helps you set goals and work toward them.
Securing funding. Often, you will need to use a breakeven analysis to secure funding and show investors the plan
for your business.
Pricing appropriately. A breakeven analysis will show you how to properly price your products from a business
standpoint.

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11. Step government taking to help startups

Start-up India
Launched by Prime Minister Narendra Modi in 2016, the scheme falls under the purview of the Department of
Industrial Policy and Promotion. Aims to support Indian entrepreneurs in creating 10 lakh mobile app startups.

The flagship programme under Start-up India is the MUDRA loan scheme (Pradhan Mantri Mudra Yojana). This
programme offers microfinance loans at low interest to emerging entrepreneurs from low socioeconomic strata.
Funding of Rs. 20,000 crores have been allotted for this scheme.

Read all that you need to know about Pradhan Mantri Mudra Yojana - what it is, types of funding available, how to
get funding and more.

ATAL Innovation Mission

The government scheme, set up by Niti Aayog, was created to promote an innovative culture and the development
of the spirit of entrepreneurship across India. The scheme aims to create cooperation between state, central, and
local innovation schemes and implement entrepreneurship spirit from schools to corporates by developing world-
class Atal Incubators (AICs). This would help to address commercial and social entrepreneurship ventures in India.

e-Biz Portal
Founded in 2013, this is the first online platform that allows government-to-business (G2B) communication. e-Biz’s
portal primary purpose was to create an entrepreneurship friendly atmosphere in the country. The platform has
been developed by Infosys and has launched 29 services across 5 states in India. It is a single communication online
forum for Indian businesspeople and investors for conducting transactions, clearances, and activities related to both
of them.

Additional Reading:

Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)
The SIP-EIT scheme was launched by the Ministry of Electronics and Information Technology to provide financial
funding for MSMEs and Technology Startups to encourage innovation, acknowledge international patent rights and
optimize the growth of the sector in the county. Businesses that want to go global need to apply for intellectual
property rights as innovations are at risk of being stolen or misappropriated. Hence, the government has executed
various protection measures through the SIP-EIT scheme.

Multiplier Grants Scheme (MGS)

MGS was launched under the Department of Electronics and Information Technology (DeitY) for promoting
integrated research and development (R&D) between industry and educational institutions for developing products
and packages. Under this scheme, the government provides financial assistance at 2x times the amount contributed
by the industry, provided the industry supports R&D of products that get marketed at the institutional level.

MGS encourages and hastens the development of indigenous products/services. Government grants are available
up to Rs. 2 crores per project with project tenure limited to around 2 years. For industrial collaborations, the cost is
limited to Rs. 4 crores with a maximum tenure of 3 years.

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Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
The government established CGTMSE for providing collateral-free business loans to MSME and startups. The
scheme allows business units to get collateral-free loans at a low rate of interest up to a maximum of Rs. 100 lakhs
under a tie-up with SIDBI (Small Industries Development Bank of India) for promoting new businesses and
relaunching existing ones. The loan is provided mainly for manufacturing companies, either as working capital or
term loan.

Software Technology Park (STP)

STP scheme has been established as a 100% export-oriented programme for promoting and exporting computer
software and professional services through communication networks or physical media. The scheme focuses solely
on computer software. 100% Export Oriented Units (EOU) and Export Processing Zones (EPZ) concepts for forming
Science Parks/Technology Parks are covered under this scheme.

12. Big Business Entrepreneurship

Entrepreneurship has traditionally been associated with innovative startups and daring individuals. However, large
companies are now actively seeking ways to foster entrepreneurial behavior within their organizations. This shift
signifies a recognition that innovation and agility are essential for survival and growth. This article explores the
meaning, characteristics, and examples of large company entrepreneurship, exploring how these organizations
navigate the complex terrain of innovation and adaptability.

Size and Revenue: Large companies have substantial operations and generate significant revenue. Their size may be
calculated using variables like market capitalization, total assets, yearly revenue, or personnel count. Depending on
the sector and the nation, different companies may meet different criteria for being considered large.

2. Market Presence: Large companies frequently have a strong presence in the market. In their field, they are well-
known among others. People are familiar with their brand. They could have a sizable market share. Also, the diverse
consumer base for their goods or services.

3. Organizational Complexity: Large companies frequently have intricate organizational systems with several
divisions, subsidiaries, and departments. They can successfully handle various businesses and cater to various
market segments thanks to this framework.

4. Resources and Capabilities: Large companies have access to a wide range of resources. They have enough
resources like finance, talent, infrastructure, and technology. They invest their resources in projects related to
innovation, marketing, and growth. These assets support their capacity for long-term growth and give them a
competitive advantage.

5. Geographic Reach: Large companies frequently serve clients from several areas or nations on a national or
worldwide level. To support their activities, they could have a huge network of offices, factories, or distribution
hubs.

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6. Industry Influence: Large companies have a significant impact on their industry. They may impact policies, market
trends, and industry standards. Their position in the market and competitiveness may affect how other companies
in the same industry behave.

So, a commercial entity that has attained considerable size, revenue, and market presence is referred to as a “large
company.” These businesses frequently have a wealth of assets, strong operational capabilities, and industry clout,
which enables them to compete fiercely and influence the commercial environment in their respective industries.

13. Idea Generation Methods

#1 The 5W+H Method

Although it may seem like a random set of numbers at first glance, the 5W+H method is a really meaningful way to
cope with the creative drought. The technique represents basic questions you need to ask when thinking about a
specific topic: Who, what, where, when, why, and how?

Jason Richardson, a content creator at essay papers, shared his thoughts with us: “If you answer each of the 5W+H
questions precisely – regardless of the topic – you can get one step closer to solving your problem. These answers
should stimulate your brain to rethink the whole subject and find a new angle of looking at things.”

#2 Social Listening
Idea generation doesn’t mean you have to come up with a great suggestion single-handedly. On the contrary,
sometimes it’s enough to do a little bit of social listening and see what the target audience has to say about a certain
topic. You can use social networks like Facebook or Twitter to find precious ideas coming from end-users.

Besides that, you can always organize an opinion poll to directly ask people what they want. For example, a platform
such as Survey Monkey allows you to launch a simple survey within minutes, so why not use it as the idea generation
tool?

#3 Brainstorming
Brainstorming is a well-known method that people all over the world use for decades already. What makes this
tactic so popular? Well, it’s the fact that no one gets laughed at for proposing a stupid idea. There is no right or
wrong here – you just need to say the first thing that comes to your mind and that’s it. After a quick brainstorming
session, you just need to filter through all suggestions and find the ones that have the biggest potential to succeed.

#4 Role Playing
Walking in someone else’s shoes is everything but easy, but sometimes it’s the only way to break the barrier and
think of a brilliant idea. The process is simple: you just need to switch places with your colleagues and try to embrace
their point of view. It doesn’t guarantee immediate results, but it often leads to interesting conclusions and brand-
new ideas.

#5 Use Online Tools

The Internet is filled with interesting tools that can assist you in identifying alternative ideas. You can choose
between many different options, but the final decision usually depends on the nature and peculiarities of your
business. However, we can definitely recommend a couple of valuable platforms here:

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Evernote: Nothing hurts like coming up with amazing solutions and forgetting it along the way. Evernote prevents
this because it allows you to write down every thought instantly.
Ninja Essays: It’s a team of incredibly creative authors who can help you to brainstorm and craft high-quality topics
for your websites, blogs, or research papers.
#6 Mind Mapping
Mind mapping is another method to get through the creative drought successfully. By definition, a mind map is a
diagram for representing tasks, words, concepts, or items linked to and arranged around a central concept or
subject using a non-linear graphical layout that allows the user to build an intuitive framework around a central
concept.

Let’s say you are writing a screenplay. In this case, you can put the main character in the center of the map and
then add links leading to all other elements of your movie – from plot and love relationships to supporting roles.

#7 Think In Reverse
The last solution on our list is very amusing. Instead of thinking about how to reach your goal, you can think about
how not to achieve it. For example, you can make a plan on how to reduce the number of Instagram followers
instead of increasing it. The so-called negative thinking often leads people to unbelievable conclusions, which in
turn brings them a bunch of new ideas.

14. Source of finance available to an entrepreneur and its use

1. Personal Savings:
 Source: Entrepreneurs often use their personal savings to fund their businesses.
 Use: This source is typically used for initial capital, covering startup costs, and demonstrating
commitment to potential investors.
2. Friends and Family:
 Source: Entrepreneurs may seek financial support from friends and family members.
 Use: This source is often used for seed capital or early-stage funding, and it may involve
informal agreements.
3. Angel Investors:
 Source: Angel investors are individuals who provide capital in exchange for equity or
convertible debt.
 Use: Funds from angel investors are typically used for early-stage startups to develop and
market products, hire key team members, and expand operations.
4. Venture Capital:
 Source: Venture capitalists are professional groups that manage pooled funds from various
investors.
 Use: Venture capital is used for scaling a business, entering new markets, and accelerating
growth. It's often sought by startups with high growth potential.
5. Bank Loans:
 Source: Entrepreneurs can secure loans from banks or financial institutions.
 Use: Bank loans are commonly used for working capital, purchasing equipment, or financing
specific projects. They may require collateral.

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6. Crowdfunding:
 Source: Entrepreneurs can raise funds from a large number of individuals via online
crowdfunding platforms.
 Use: Crowdfunding is used for various purposes, including product development, market
testing, and initial production runs.
7. Grants and Subsidies:
 Source: Governments, foundations, or organizations may offer grants or subsidies for specific
projects or industries.
 Use: Grants can be used for research and development, environmental initiatives, or other
socially beneficial projects.
8. IPO (Initial Public Offering):
 Source: Companies can go public by offering shares on the stock market.
 Use: IPOs generate substantial capital for established companies, which can be used for
expansion, acquisitions, or debt repayment.
9. Corporate Partnerships:
 Source: Entrepreneurs may form partnerships with established companies that provide capital
or resources.
 Use: Capital from corporate partnerships can be used for joint ventures, product development,
or market expansion.
10. Trade Credit:
 Source: Suppliers may extend credit terms to entrepreneurs, allowing them to defer payment
for goods and services.
 Use: Trade credit can be used to manage cash flow and finance short-term operational needs.

15. Entry Barriers to start a business

Barriers to entry is an economics and business term describing factors that can prevent or impede newcomers into
a market or industry sector, and so limit competition. These can include high start-up costs, regulatory hurdles, or
other obstacles that prevent new competitors from easily entering a business sector. Barriers to entry benefit
existing firms because they protect their market share and ability to generate revenues and profits.

Government Barriers to Entry

Industries heavily regulated by the government are usually the most difficult to penetrate. Examples include
commercial airlines, defense contractors, and cable companies.
The government creates formidable barriers to entry for varying reasons. In the case of commercial airlines, not
only are regulations stout, but the government limits new entrants to limit air traffic and simplifies monitoring.
Cable companies are heavily regulated and limited because their infrastructure requires extensive public land use.

Example: Electronics Industry

Consumer electronics with mass popularity are more susceptible to economies of scale and scope as barriers.
Economies of scale mean that an established company can easily produce and distribute a few more units of existing
products cheaply because overhead costs, such as management and real estate, are spread over a large number of
units. A small firm attempting to produce these same few units must divide overhead costs by its relatively small
number of units, making each unit very costly to produce.

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Established electronics companies, such as Apple (AAPL), may strategically build in switching costs to retain
customers. These strategies may include contracts that are costly and complicated to terminate or software and
data storage that cannot be transferred to new electronic devices. This is prevalent in the smartphone industry,
wherein consumers may pay termination fees and face the cost of reacquiring applications when they consider
switching phone service providers.

Trade and Economic Barriers

If governments are employing trade sanctions, it may be more difficult to import or export goods in relation to that
country. Companies may seek different markets to work with or seek which products are specifically excluded from
trade sanctions. If all else fails, a company may simply delay the timing of transacting with the country with the
sanction as many government sanctions are temporary.
Tariffs and Tax Barriers
Companies may pre-emptively decide they want to burden the consumer with additional barrier charges such as
import tariffs or taxes. Companies may also seek ways to avoid taxes such as partnering with local organizations to
manufacture goods or develop value-added activities in the local market so the imported goods are assessed at a
lower value (and assessed lower fees).

Information Barriers
A company seeking to join or create a brand-new market may simply not have enough information needed to feel
it may be successful. For these types of barriers, it may be best for the company to develop a minimum viable
product for market research. This test product may be used to elicit consumer feedback as well as shape financial
planning expectations.

A company may also consider acquiring an existing company within the market it seeks to join. Not only will this
company have already overcome some if not all aspects of the barriers to entry, the company may have knowledge
and information useful to the long-term success of the company.

Market Dominance Barriers

In some cases, the market leader position is so advanced, it'd nearly impossible they'll be caught in the short-term.
For these barriers, companies may consider using a disruptive pricing model and even incurring a short-term loss
to steal long-term customers. A company may also set difference objectives such as "be the lowest cost producer".

Cost Barriers
Though many costs likely can't be overcome, a company may consider using open-source software instead of
custom, proprietary software to cut costs. The company may seek short-term leases instead of capital investments
for equipment to gauge financial success in the near term. The company may also choose to only manufacture on-
demand or on order to avoid over-committing resources that could have been used elsewhere.

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16. Exit strategy for a business

A business exit strategy is an entrepreneur's strategic plan to sell his or her ownership in a company to investors or
another company. An exit strategy gives a business owner a way to reduce or liquidate his stake in a business and,
if the business is successful, make a substantial profit. If the business is not successful, an exit strategy (or "exit
plan") enables the entrepreneur to limit losses. An exit strategy may also be used by an investor such as a venture
capitalist in order to plan for a cash-out of an investment.
Navigating the myriad pathways of exit strategies is crucial for startup founders and investors eyeing a fruitful
transition. This section delves into various types of exit strategies, shedding light on how each aligns with different
business models and long-term objectives, thus providing a roadmap for a successful exit.

Mergers and acquisitions (M&A)

M&A deals are when two or more companies combine to form a new company, or when one company acquires
another company. M&A deals can be a great way for startups to gain access to new markets, resources, and
expertise. However, according to a recent report by CB Insights, M&A deals continued to decline by 8% in the global
startup ecosystem.

Initial public offerings (IPOs)

An IPO is when a company sells shares of its stock to the public for the first time. IPOs can be a great way for startups
to raise capital and increase their visibility. According to a report, the global IPO market is showing a consistent
rebound, with a substantial 24% increase in the number of IPOs. However, IPOs can be complex and expensive, and
they are not suitable for all startups.

Family succession exit

Family succession is the process of passing a business down to the next generation. This can be a good option for
founders who want to keep their business in the family. However, it is important to make sure that the next
generation is prepared to take over the business.

Selling your stake to a third-party

This is when you sell a portion of your ownership in the startup to another investor. Selling your stake can be a good
way to raise capital or to cash out of your investment.

Acquihire
This is a process wherein a larger company acquires a startup primarily for its talent and intellectual property.
Acquihires are often a good way for startups to exit and for their employees to find new opportunities.

Management Buy-Out (MBO)

An MBO is a transaction in which the management team of a company purchases the company from its existing
shareholders. MBOs can be a good way for management teams to take control of their own company and to create
value for themselves and their employees.

Liquidation or bankruptcy
Unfortunately, not all exits are favorable. Liquidation is when a company sells off its assets and ceases to operate.
Liquidation is often a last resort, but it may be necessary if a startup is unable to raise capital or generate enough

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revenue to stay afloat. Similarly, bankruptcy is a legal process in which a company is declared insolvent and its assets
are liquidated. Bankruptcy should be avoided whenever possible.

The best exit strategy for a startup will depend on a number of factors, including the company’s industry, stage of
growth, and financial condition. It is important to carefully consider all of the options before making a decision
about how to exit your business.

17. Features of state financial corporation with example

Features of State Financial Corporations:

1. Establishment and Legal Framework:
 Feature: SFCs are established under the State Financial Corporations Act, 1951, enacted by the
Indian government.
 Example: The Gujarat State Financial Corporation (GSFC) in India was established under the
State Financial Corporations Act.
2. Objective and Focus:
 Feature: SFCs primarily aim to promote small and medium-sized enterprises by providing them
with financial assistance and related services.
 Example: The Kerala State Industrial Development Corporation (KSIDC) focuses on promoting
industrial growth in the state of Kerala.
3. Financial Assistance:
 Feature: SFCs provide term loans, working capital, and other financial assistance to small and
medium enterprises for their establishment, expansion, and modernization.
 Example: Maharashtra State Financial Corporation (MSFC) provides financial support to
businesses in Maharashtra for various purposes.
4. Risk Capital:
 Feature: SFCs often offer risk capital in the form of equity or quasi-equity to help entrepreneurs
meet their long-term capital requirements.
 Example: Tamil Nadu Industrial Investment Corporation Limited (TIIC) is known for providing
risk capital to industries in Tamil Nadu.
5. Promotion of Entrepreneurship:
 Feature: SFCs actively promote entrepreneurship by supporting new and existing enterprises
with financial resources and technical assistance.
 Example: Karnataka State Financial Corporation (KSFC) encourages entrepreneurship and
industrial development in Karnataka.
6. Refinancing:
 Feature: SFCs have the authority to obtain funds by refinancing loans from other financial
institutions to meet the financial requirements of small and medium-sized enterprises.
 Example: Punjab Financial Corporation (PFC) in Punjab, India, engages in refinancing activities
to support local businesses.
7. Participation in Equity:
 Feature: SFCs may participate in the equity capital of industrial concerns to strengthen their
financial structure.

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 Example: Rajasthan Financial Corporation (RFC) may take an equity stake in eligible projects to
foster their growth.
8. Technical and Managerial Assistance:
 Feature: SFCs not only provide financial support but also offer technical and managerial
assistance to help entrepreneurs run their businesses effectively.
 Example: Odisha State Financial Corporation (OSFC) extends support by facilitating technology
upgradation and management training.
9. Coordination with Financial Institutions:
 Feature: SFCs collaborate with other financial institutions and banks to ensure comprehensive
financial support for SMEs.
 Example: Assam Financial Corporation (AFC) works in coordination with nationalized banks and
financial institutions to enhance the credit flow to industries.
10. Repayment Terms:
 Feature: SFCs design flexible repayment terms and conditions, considering the financial
viability of the projects they finance.
 Example: Haryana Financial Corporation (HFC) structures repayment schedules in a way that
aligns with the cash flow of the businesses it supports.
State Financial Corporations play a vital role in the economic development of them

18. Role of small-scale industries (SSI)

Small Scale Industries (SSI) are industries that manufacture, produce and render services on a small or micro scale
level. In India, several SSIs exists in various fields such as handicrafts, toys, weaving, pickle making, food products,
etc. These industries make a one-time investment in machinery, plant, and equipment, but it does not exceed Rs.10
crore and annual turnover does not exceed Rs.50 crore.

Essentially the small-scale industries are generally comprised of those industries which manufacture, produce and
render services with the help of small machines and less manpower. These enterprises must fall under the
guidelines, set by the Government of India.

The SSI’s are the lifeline of the economy, especially in developing countries like India. These industries are generally
labor-intensive, and hence they play an important role in the creation of employment. SSIs are a crucial sector of
the economy both from a financial and social point of view, as they help with the per capita income and resource
utilization in the economy.

Ownership
SSIs generally are under single ownership. So, it can either be a sole proprietorship or sometimes a partnership
firm.

Management
Generally, both the management and the control are with the owner/owners. Hence the owner is actively involved
in the day-to-day activities of the business.

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Labor Intensive
SSI’s dependence on technology is pretty limited. Hence, they tend to use labor and manpower for their production
activities.

Flexibility
SSIs are more adaptable to their changing business environment. So in case of amendments or unexpected
developments, they are flexible enough to adapt and carry on, unlike large industries.

Limited Reach
Small scale industries have a restricted zone of operations. Hence, they can meet their local and regional demand.

Resources Utilization
They use local and readily available resources which helps the economy fully utilize natural resources with minimum
wastage.

Role in the Indian Economy

Employment
SSIs are a major source of employment for developing countries like India. Because of the limited technology and
resource availability, they tend to use labour and manpower for their production activities.

Total Production
These enterprises account for almost 40% of the total production of goods and services in India. They are one of
the main reasons for the growth and strengthening of the economy.

Make in India
SSIs are the best examples for the Make in India initiative. They focus on the mission to manufacture in India and
sell the products worldwide. This also helps create more demands from all over the world.

Export Contribution
India’s export industry majorly relies on these small industries for their growth and development. Nearly half of the
goods that are exported from India are manufactured or produced by these industries.

Public Welfare
These industries have an opportunity to earn wealth and create employment. SSIs are also important for the social
growth and development of our country.

Seedbed for Large Scale Industries

SSI acts as the seedbed for Large Scale Industries (LSI) as it provides conducive conditions for the development and
growth of entrepreneurs. Small enterprises require low investment and simple technology and use local resources
to meet local demands through personal contacts. Thus, it creates scope for the growth and development of LSI.

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