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Todays Youth tomorrows Entrepreneur

Workshop on Entrepreneur Development

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WELCOME
NSIC TECHNICAL SERVICES CENTRE,CHENNAI-32

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TODAYS AGENDA
REGISTRATION ABOUT NSIC NSIC-CORPORATE FILM HOW TO START AN INDUSTRY ? NSIC TECHNOLOGY INCUBATION-FILM SUCCESS STORY FEED BACK & QUESTIONS ?
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Who is Entrepreneur ?

An individual who, runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale.

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Entrepreneur

Business leader Innovator of new ideas & Business processes.

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Entrepreneur
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
By Peter F. Drucker

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Entrepreneur
Entrepreneurs play a key role in any economy. Have the skills and initiative necessary to take good new ideas to market Make the right decisions to make the idea profitable. The reward for the risks potential economic profits the entrepreneur could earn.
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Why Entrepreneurship
In India, where over 30 crores people are living below the poverty line it is simply impossible for any government to provide means of livelihood to everyone. people are encouraged to come up with their entrepreneurial initiative.

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OPPORTUNITIES IN INDIA
India is one of the largest economies of the world.

It is a fast growing free market democracy which has come to the global forefront as a hub for manufacturing and services industry.
It is the fourth largest economy in terms of purchasing power parity (PPP) and

The tenth most industrialized country in the world.


Its diversified natural and human resource 8/7/2012 NTSC,CHENNAI base;

OPPORTUNITIES IN INDIA
a vast consumer market; a well connected infrastructural set-up;

sound macro-economic foundation; etc places it at a competitive position on the world platform.
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CENTRAL GOVERNMENT SUPPORT FOR ENTREPRENEUR


Loans at concessional rates of interest;

Subsidies in various forms;

Tax holiday and tax concessions including progressive reduction in rates of corporate taxes; import of capital goods at concessional customs duty, etc;

Setting up of Special Economic Zones (SEZs);

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CENTRAL GOVERNMENT SUPPORT FOR ENTREPRENEUR

Single Window clearance facilities have been provided in various States to simplify the procedure for investment;

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OPPORTUNITIES IN STATE
Tamil Nadu is one of the most developed states in the country. The state is witnessing rapid industrialization Grown as a manufacturing powerhouse in the country, especially in automobiles and textiles. The state's capital city, Chennai is called the 'Detroit of India'. Fastest growing State Economy in India

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OPPORTUNITIES IN STATE
One of the top three recipients of Foreign Direct Investment(FDI) Matured manufacturing sector Fast emerging as the IT happening destination Pro-active and investor friendly Government with transparent decisionmaking approach
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OPPORTUNITIES IN STATE
Ranks No.1 in availability of skilled manpower in India Most sought after destination by MNCs Excels in terms of human resource, infrastructure and labour relations Low cost of man power

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Definitions of Micro, Small & Medium Enterprises


In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
(a) Manufacturing Enterprises (b) Service Enterprises:
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Classification
The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery. The services enterprises are defined in terms of investment in equipment.

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Type of industries

Manufacturing service

MICRO SMALL MEDIUM

UPTO 25 LAKHS 25 Lacs TO 5 CRORES 5 TO 10 CRORES


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UPTO 10 LAKHS 10 Lacs TO 2 CRORES 2 TO 5 CRORES


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Selecting a Product
Central Government and the State Governments provide

Incentives for manufacture of certain products by small scale units. Reservation of several products for exclusive manufacture by small scale industries

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Selecting a Product
The Directorates of industries of State provide guidance to the entrepreneurs. An entrepreneur can also study the industry clusters to get an idea about the type of products best suited for production in particular areas.

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SELECTION OF PRODUCT-TAMILNADU
Engineering, Automobiles and Components Software & ITES

Bio technology, Pharma and Herbal based products


Agro and Food Processing

Health care
Tourism related projects Infrastructure Chemicals and petro- chemicals Textiles, garments and home furnishings
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Leather products

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Suggested Areas
Food sector - Food Processing, Packaging, Cashew processing, Bakery and confectionery. Fisheries - Fish Hatchery, Processing units, Aquarium, Sea Food sector, Coir and Handloom sector,

Rubber based industries

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Suggested Products
Decorative papers Paper Bags Paper board cartons Paper cups/plates Paper envelopes Drinking straws

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Suggested Products
Paper napkins including facial tissue napkins Gummed tape Computer stationeries rolls Stencil paper Toilet paper rolls and sheets Letter pads
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Suggested Products
Hot water bags Rubber Rubber balloons Rubber washers Rubber eraser 'O' ring rubber

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Suggested Products
Wooden storage shelves & racks Wooden storage cupboards Wooden furniture and fixtures

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Suggested Products
Pickles & Chutneys Bread Tapioca sago Tapioca Chips Ice Cream

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Suggested Products
Aquarium

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Suggested Products
Snacks Chips Toys

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MSME-Service sector
Advertising Agencies Marketing Consultancy Industrial Consultancy Equipment Rental & Leasing Typing Centres Photocopying Centres Industrial Photography
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MSME-Service sector
Desk Top Publishing Internet Browsing/Setting up of Cyber Cafes Auto repair, services and garages Testing of Raw Materials, Finished Products -LAB maintenance, repair, testing or electronic/electrical equipment/instruments i.e. measuring/control instruments, servicing of all types of vehicles and machinery of any description including televisions, tape recorders, VCRs, Radios, Transformers, Motors, Watches, etc

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MSME-Service sector
Laundry and Dry Cleaning

X-Ray Clinic
Tailoring Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig, Boring Machine, etc

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MSME-Service sector
EDP Institutes established by Voluntary Associations/Non-Government Organisation Installation and operation of Cable T.V. Network Operating EPABX under franchises

Beauty Parlours and Creches

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MSME-Service sector
Weigh Bridge. Photographic Lab Blue Printing and enlargement of drawing/designs facilities ISD/STD Booths Sub-Contracting Exchanges (SCXs) established by Industry Associations

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How to start ?
REGISTRATION OF UNITS

DISTRICT INDUSTRIES CENTRE (DIC) is the Nodal agency to register the unit.
File the Memorandum Part II thro Internet or direct at DIC.

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How to start ? DIC


DIC provide an interface between industry and other agencies for industry inputs To get different industrial approvals and clearances from various departments at a single point-Single Window. They sanction incentives to eligible industrial undertakings Allotment of scarce raw materials to industrial units. Hence, a new entrepreneur must approach the concerned DIC while setting up a business firm
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How to start ?
Need only Information on

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Type of Industries-Manufacturing or service Type of business entities-Proprietorship partnership, Pvt or Public limited company Product or service details. Machinery or equipment details Man power requirements. Process details Investment details. Location details etc..
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Types of Business Entities


Sole Proprietorship Partnership

Private Limited Company


Public Limited Company Charitable Organization

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Sole Proprietorship
No registration required

Unlimited liability

Used for small business or by Professionals

No Separate Legal Entity

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Partnership
Section 11 of Companies Act, 1956 Maximum partnership 20 persons Unlimited Liability Registration not Compulsory

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Company
Governing Act Companies Act, 1956 Special Features of Company

Company is a Separate Legal Entity It can sue and be sued in its own name The liability of the shareholders are limited to the extent of their shareholdings Company is distinct from its shareholders It can hold property in its own name
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Process of setting up of enterprise

A good business plan is the key to setting up a successful business.

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Creating a Business Plan


Every new venture should have a business plan. A business plan is the formal written expression Vision, Strategy and operations of the proposed venture. Presented to a banker, it may be called a "loan proposal."
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Objectives
The business plan should present in a well defined format the short term and long term objectives of the new business venture.
The objectives can be broadly divided into quantitative and qualitative objectives.
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Environmental Influences
- Demonstrate your knowledge and competence by evaluating the impact of the environmental influences such as political, economic, technological, socio-demographic and ecological factors that affect your area of business
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Resource requirements
Quality Marketing Sales Forecast Financial Plans Human Resources - . Form of Business - . Critical Risks - . Conclusion Also mention the time schedules against each stage of your venture.
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Resource requirements
Along with your business plan make sure to support your document with flow charts, photographs, market surveys, sample brochures, advertisements, tax returns, resumes of board members, letters of recommendations etc. All this should form a part of appendixes.
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organisations to assist and promote industries are


The Investment Promotion Agencies (IPA)

NATION SMALL INDUSTRIES CORPORATION LTD (NSIC)


State Industrial Development Corporations (SIDCO) Small Scale Industries Development Corporations (SSIDC) State Financial Corporations (SFC) District Industries Centres (DIC) Single Window Service and Escort Service
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The opportunities in the small-scale sector are enormous due to the following factors:-

Less Capital Intensive Extensive Promotion & Support by Government Reservation for Exclusive Manufacture by small scale sector Funding - Finance & Subsidies Machinery Procurement
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Contd./Raw Material Procurement

Manpower Training Technical & Managerial skills Tooling & Testing support Reservation for Exclusive Purchase by Government Export Promotion
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Contd./Growth in demand in the domestic market size due to overall economic growth Increasing Export Potential for Indian products This sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy.
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Regulatory Requirements
Once an entrepreneur has taken all the important decisions relating to starting a business, he/she has to take into account the basic regulatory requirements which are to be followed for setting up the organisation . Basic regulatory Environmental regulatory

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Environmental regulatory
The environmental regulatory requirements envisage a wide legislative framework covering every aspect of environment protection like air, water, noise, forest conservation, wildlife protection, etc.

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Financing a Start Up Business


One needs money to make money. Finance is the lifeline of business. A business firm requires finance to commence its operations, to continue its operations and for its expansion and growth. There must be continuous flow of funds in and out of business. Sound plans, efficient production and marketing are all dependent on NTSC,CHENNAI flow of finance. smooth 8/7/2012 54

Financing a Start Up Business


Hence, a financial plan needs to be prepared, which indicates the requirements of finance, sources for raising the finance and the application of funds. Financial planning for starting a business begins with estimating the total amount of capital required by the firm for the various need of the business.
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Types of Financial Needs


Financial Needs of a Business may be Classified into two on the basis of the Extent of Permanence :Fixed Capital Working Capital

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Fixed Capital
The funds required to purchase fixed or durable assets are known as fixed capital or long term capital. The fixed or durable assets include land, buildings, Machinery & equipment, furniture,etc.

The nature and size of the business generally determines the amount of fixed capital needed.
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Fixed Capital
For e.g. manufacturing activities require large investments in plant, machinery, warehouses and others.

While, trading concerns need relatively lesser investment in such assets.


These assets continue to generate income and profits over an extended period of time.
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Working Capital
Money invested in short term assets or current assets is known as working capital It includes purchase of raw materials, payment of wages and salaries, rent, fuel, electricity and water, repairs and maintenance of machinery, advertising, etc

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SOURCES OF FUND
The funds raised to meet both the longterm and short-term capital requirements may take the form of :Ownership Capital Borrowed Capital

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Ownership Capital

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It is the amount of capital invested in a business by its owners. It is on the basis of the amount invested that the owners become entitled to the profits of the business. Under sole proprietorship, the individual owner normally invests capital from his own savings. In partnership, each partner contributes capital as mutually agreed among partners.
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While companies raise capital by issuing shares. The investors who contribute towards the share capital of a company become its owners by virtue of their share holdings. The rate of return on owners investment depends on the level of profits earned and are entitled to receive dividend out of these profits. Ownership capital is generally used as permanent capital or long-term capital.
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Borrowed Capital
The financial requirements of the business are often met by raising loans. Borrowed money involves a fixed obligation to pay interest and repay the principal amount as and when due. In a sole proprietary business the proprietor can borrow money on his personal security or on the security of his existing assets. A partnership firm can raise loans on the personal security of the individual partners. Money may be borrowed for short-term and long-term i.e. to finance fixed assets as well as current assets
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Methods of Raising Capital


Investment of own savings Raising loans from friends and relatives Arranging advances from commercial banks Borrowing from finance companies
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Loans from Commercial Banks


Medium-term loans can be raised by companies from commercial banks against the security of properties and assets. Funds required for modernisation and renovation of assets can be borrowed from banks. This method of financing does not require any legal formality except that of creating a mortgage on the assets.
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Loans from Financial Institutions


Long-term and medium-term loans can be secured by companies from financial institutions State level Industrial Development Corporations, etc. These financial institutions grant loans for a maximum period of 25 years against approved schemes or projects. Loans agreed to be sanctioned must be covered by securities by way of mortgage of the company's property .
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Sourcing Process, Raw Materials, Machineries and Equipments

Once the firm has decided on the foremost issues of which product it wants to produce and the location of the industry, the next important step is to select appropriate technology and equipment to produce the same.

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Sourcing Process, Raw Materials, Machineries and Equipments


In addition to this, the source of raw material has to be decided upon. The requirements of all these can either be met through domestic sources or can be imported subject to the regulatory requirements of the Government.

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Tender Marketing
The Corporation participates in bulk global tender enquiries and local tenders of Central & State Government and Public Sector Enterprises on behalf of small scale units. It is aimed to assist SSIs with ability to manufacture quality products but which lack brand equity & credibility or have limited financial capabilities. Under this scheme, the Corporation has identified large number of items for which it actively participates in tenders of these Departments and Enterprises. On receipt of the orders, Corporation farms out these orders to the units on whose behalf it has quoted. This assistance has enabled a large number of small units to compete for the orders which are normally out of reach of the individual units because of the bulk requirement.
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Consortia Marketing
A SSI unit in its individual capacity faces problem very often to procure & execute large orders, which inhibits and restricts the growth of SSIs. NSIC, accordingly adopted Consortia Approach and built groups/consortia of units manufacturing same products, thereby easing out marketing problem of SSIs. The Corporation explores market and secures orders for bulk quantities. These orders are then farmed out to small units in tune with their production capacity. Testing facilities are also provided to enable units to improve and maintain the quality of their products conforming to the standard specifications.

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Government Purchase Programme


The Government is the single largest buyer of a variety of goods. With a view to increase the share of purchases from the small-scale sector, the Government Stores Purchase Programme was launched in 1955-56. NSIC registers SSI units under Single Point Registration scheme for participation in Government Purchases.
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Benefits
Issue of tender sets free of cost. Advance intimation of tenders issued by DGS&D. Exemption from payment of earnest money. Waiver of security deposit up to the monetary limit for which the unit is registered. Issue of competency certificate in case the value of an order exceeds the monetary limit, after due verification
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