Entrepreneurship is the process of creating something new and valuable, by investing time and effort, accepting risk and gaining a reward for the risk and effort invested.

“A person who sets up a business or businesses, taking on financial risks in the hope of profit”2

Adam Smith

The entrepreneur as an individual who forms an organization for commercial purpose. He/She is proprietary capitalist, a supplier of capital and at the same time a manager who intervenes between the labor and the consumer.

“Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist”7

Different types of entrepreneurs:

On the basis of nature Clarence Danhof classified entrepreneurs into four

categories. These are –

1.   Innovative entrepreneurs: An innovative entrepreneur in one, who introduces

new goods, inaugurates new method of production, discovers new market and

recognizes the enterprise. It is important to note that such entrepreneurs can work

only when a certain level of development is already achieved and people look

forward to change and improvement.

2.   Imitative entrepreneurs: These types of entrepreneurs creatively imitate the

innovative technical achievement made by another firm. Imitative entrepreneurs are

suitable for underdeveloped countries as it is hard for them to bear the high cost of

innovation.

3.   Fabian entrepreneurs: Fabian entrepreneurs are characterized by very great

caution and skepticism to experiment any change in their enterprises. They usually

do not take any new challenge. They imitate only when it becomes perfectly clear

that failure to do not so would result in a loss of the relative position in the

enterprise.

4.   Drone entrepreneurs: They are characterized by a refusal to adopt any change

even at cost of severely reduction of profit.

Some other types of entrepreneurs:

(i)                 Solo operators: These are the entrepreneurs who essentially work

alone and if needed at all employ a few employees. In the beginning most of the

entrepreneurs start their enterprises like them.

(ii)               Active partners: Active partners are those entrepreneurs who start or

carry on an enterprise as a joint venture. It is important that all of them actively

participate in the operations of the business.

(iii)             Innovators: Such entrepreneurs with their competence and creativity

innovate new products. Their basic interest lies in research and innovative activities.

(iv)             Buyers’ entrepreneurs: These are the entrepreneurs who do not like to

bear much risk. They do not take the risk of production but take the risk of

marketing a product i.e. wholesaler and retailer.

(v)               Life timers: These entrepreneurs believe business as an integral part

of their life. These entrepreneurs actually inherit their family business i.e. goldsmith,

potter etc.

(vi)             Challengers: These are the entrepreneurs who initiate business

because of the challenges it presents. They believe that ‘No risk, No gain’. When

one challenge seems to be met, they begin to look for new challenges.

Beside these, there are Govt. and Non-govt. entrepreneurs.

An Economic Theory: Mark Casson, in his book the Entrepreneur- An Economic theory, presented a functional definition of the entrepreneur and considered why the entrepreneurial function is so valuable. He emphasized that the demand for entrepreneurship stems from the need to adjust to change , and that the supply of entrepreneurship is limited firstly, by the scarcity of the requisite personal qualities, and secondly, by the difficulty of identifying them when they are available. He suggested that there are four main qualities which are crucial for a successful entrepreneur of which one – imagination – is almost entirely i9nnate. The other three qualities may be enhanced. The problems encountered in screening for these qualities, and in enhancing the ones that are deficient. Have a number of important implications for the development of a successful entrepreneurial career.

Leibenstein’s X-efficiency Theory

This theory, originally developed for another purpose, has recently been applied to analyse the role of the entrepreneur . Basically, X-efficiency is the degree of inefficiency in the use of resources within the firm it measures the extent to which the firm fails to realize its productive potential . For a given set of inputs, productive potentials is identified with the point on Neo classical production frontiers. X-efficiency arises either because the firm’s resources are used in the wrong way or because they are wasted, that is, not used at all.

Leibenstein identifies two main roles for the entrepreneur. The first role is input completion,which involves making available inputs that improve the efficiency of existing production methods or facilitate the introduction of new ones. The role of the entrepreneur is to improve the flow of information in the market. The second role, gap filling, is closely asking to the arbitrage function emphasized by Kirzner. Leibenstein provides a very vivid description of gap filling, visualizing the economy as a netmade up of nodes and pathways

Dynamic Entrepreneurship Innovation Theory

A dynamic theory of entrepreneurship was first advocated by Schumpeter (1949) who considered entrepreneurship as the catalyst that disrupts the stationary circular flow of the economy and thereby initiates and sustains the process of development. Embarking upon new combinations of the factors of production – which he succinctly terms innovation – the entrepreneur activates the economy to a new level of development. The concept of innovation and its corollary development embraces five functions: (1) introduction of a new good, (2) introduction of a new method of production, (3) opening of a new market, (4) conquest of a new source of supply of raw materials and (5) carrying out of a new organization of any industry . Schumpeter represent synthesis of different notions of entrepreneurship . His concept of innovation included the elements of risk taking, superintendence and co-ordination . However, Schumpeter stressed the fact the these attributes unaccompanied by the ability to innovate would not be sufficient toaccount for entrepreneurship.

Harvard School Theory According to the Harvard School (Code 1949) entrepreneurship comprises any purposeful activity that initiate, maintain or develop a profit-oriented business in interaction with the internal situation of the business or with the economic, political and social circumstances surrounding the business. This approach emphasized two types of activities: the organization or coordination activity, and the sensitivity to the environmental characteristics that affect decision-making . Another exposition of the Harvard tradition is that of Leibenstein (1968) who emphasized activities such as searching and evaluating economic opportunities, mobilizing resources necessary for the production process, connecting different markets and creating or expanding the firm. Despite its stress on the human factor in the production system, the Harvard tradition never explicitly challenged the equilibrium-obsessed orthodox economic theory. This was challenged by the neo-Austrian School who argued that disequilibria, rather than equilibrium, was the likely scenario and as such, entrepreneurs operate under fairly uncertain

circumstances. The essence of entrepreneurship consists in the alertness of market participants to profit opportunities. A typical entrepreneur according to Kizner (1979) is the arbitrageur the person who discovers opportunity at low prices and sells the same items at high prices because of inter-temporal and interspatial demands

.Theory of High Achievement McClelland identified two characteristics of entrepreneurship, namely, doing things in a new and better wary and decision-making under uncertainty.’ He stressed the need for achievement or achievement orientation as the most directly relevant factor for explaining economic behaviour. This motive is defined as the tendency to strive for successes in situations involving anevaluation of one’s performance in relation to some standard of excellence. People having highneed for achievement are more likely to succeed as entrepreneurs. McClelland explains theentrepreneur’s interest in profits in terms of a need for achievement. People with highachievement (N-Ach) are not influenced by money rewards as compared to people with lowachievement. The latter type are prepared to work harder for money or such other external orsuch other external incentives. On the contrary, profit is merely a measure of success andcompetency for people with high achievement need.

Theory of ChangeYoung conducted the Thematic Appreciation Test (TAT) on a group o entrepreneurs. The testrevealed the tendency to describe the situation as a problem to be solved, and awareness ofpragmatic effort required, confidence in their own ability to solve the problem and a tendency totake the viewpoint of each individual in turn and analysis the situation as he might see it beforesuggesting an outcome.Young’s theory is a theory of change based on society’s incorporation of reactive subgroups. Agroup becomes reactive when the following three conditions coincide: (i) When a group experiences low status recognition; (ii) When denied of access to important social networks; and (iii) When the group has better institutional resources than other groups in the society at the same level.

Theory of ProfitKnight identifies the entrepreneur as a recipient of pure profit. Pure profit, according to him, withregard to the entrepreneur, is bearing the costs of uncertainty. He identifies uncertainty with asituation where the probabilities of alternative outcomes cannot be determined either by a priorireasoning or by statistical inference. A priori reasoning is simply irrelevant to economic situationinvolving a unique event.Knight argues that business uncertainty can be reduced through ‘consolidation’. Consolidation isto

uncertainty what insurance is to risk; it is a method of reducing total uncertainty by poolingindividual instances. The elasticity of the supply of self-confidence is the single most importantdeterminant of the level of profit and the number of entrepreneurs.

3. Theory of Adjustment of PriceFor Kirzner, the adjustment of price is the main role of the entrepreneur. If the wrong priceprevails in the market; then an opportunity for profit is created somewhere in the market if afrustrated buyer or seller is willing, respectively, to pay a higher price or accept a lower one.Then, again if different prices prevail in the same market, there is scope for profitable arbitragebetween the two segments of the market.According to Kirzner, alertness to disequilibria is the distinguishing characterization of anentrepreneur. Alertness enables some individuals to intervene in the market by changing theprice while other individuals simply respond by changing their buying and selling plans in lieu ofthe new price.Kirzner further maintains that the primary role of economic theory is to explain behaviour interms of purposeful human action. And to consider to what extent purposeful human actions caninteract to produce unexpected outcomes. To pursue the analysis of entrepreneurship furtherwould be to go beyond the limits of the agenda of this piece. Anyone who believes that theentrepreneurs is predictable has an incentive to himself intervene in the market process, and sobecome an entrepreneur.To Kirzner, this provides a satisfactory basis for asserting the inherent unpredictability of theentrepreneur. It suggests that no predictor can be anything but an entrepreneur, and so makes apredictive theory of entrepreneurship impossible.

Theory of Market Equilibrium Hayek’s main contribution to entrepreneurial theory is to point out that the absence ofentrepreneurs in Neo-classical economics is intimately associated with the assumption of marketequilibrium. According to Hayek, the equilibrium postulate is equivalent to a postulate of full information; not full information in the sense of a complete information theory about every conceivable thing, but full information in the sense that no further information is needed in or derto modify anyone’s decisions. For him, the empirical content of economics related to the process of adjustment towards anequilibrium. This process involves the acquisition and communication of knowledge. Hevisualizes a world in which there is continuous process of discovery. Market help people tocommunicate their discoveries to others and learn of discoveries, thereby moving towards a saleof equilibrium.

Theory of Personal Resourcefulness

The root of entrepreneurial process can be traced to the initiative taken by some individuals to gobeyond the existing way of life. The emphasis is on initiative rather than reaction, althoughevents in the environment may have provided the trigger for the person to express initiative. Thisaspect seems to have been subsumed within ‘innovation’ which has been studied more as the‘change’ or ‘newness’ associated with the term rather ‘proactive ness.’ This tendency to takeinitiative has been approached from different directions at various stages in the development oftheory in entrepreneurship. For instance, By grave and Hofer (1991) talk of the importance ofhuman volition, Carland et al. (1984) define an entrepreneur as one who ‘establishes’ anorganization, or Schumpeter (1949) talks of the agent who consciously disturbs the stationaryprocess to take it in a new direction. They all reflect on the primacy of individual initiative.Studies of entrepreneurial traits related to this aspect of behaviour, such as internal focus ofcontrol (Brochaus. 1982), capability to take personal risks (Gasse. 1985) and positive approachto work and problems, without excessive fear of failure, seeming from strong belief in favourablefuture (Kuratko & Hodgetts, 1989) – all lend to a strong sense of personal resourcefulness(Kanungo & Misra, 1992) through which entrepreneurs take up and deal with non-routine tasksand situations. Hence, ‘personal resourcefulness’ in the context of this paper is the belief in one’sown capability for initiating actions directed towards creation and growth of enterprises. Such

4. initiating process requires cognitively mediated self regulations of internal feelings andemotions, thought and actions as suggested by Kanungo and Misra (1992).

Theory of Cultural ValesThe key elements in Thomas Cochran’s theory are cultural values, role expectations and socialsanctions. In his theory on the process of economic development, entrepreneurs are not seen asbeing deviant or super normal individuals but rather as representing society’s modal personality.This modal personality is modal by prevailing child-rearing practices and schooling common to agiven culture. The performance of a businessman, according to him, will generally the influencedby three factors: (1) his own attitude towards his occupation; (2) the role expectations held by thesanctioning groups; and (3) the operational requirements of the job. The determinants for the firsttwo factors are the society’s values. Changes over time in such variables as population,technology, and institutional drift will impinge on the role structure by creating new operationalneeds.Development in any walk of life has always depended, to some degree, on individual qualities ofentrepreneurship. The success of planned efforts made by some countries in

developing localentrepreneurs demolished the contention that an entrepreneur is a rare character; thatentrepreneurship is not restricted to those who are gifted with certain qualities at birth. It can alsobe developed. It sia precisely this conviction that has led to careful studies on entrepreneurshipfrom economical psychological and socio-logical perspectives, as well as steps to identify anddevelop entrepreneurship. As observed, every theorist has looked at the entrepreneur andentrepreneurship on the basis of his perception, and therefore, can, at best, provide only a limitedview of entrepreneurial phenomenon. No view is right or wrong, or more or less; in fact, thevarious factors which cause the emergence of entrepreneurship are integral and not additive.They are interlocking, mutually dependent and usually reinforcing.Factors Influencing EntrepreneurshipPeter Heydemann, the Science Counsellor in the U.S Embassy here seems much impressed withthe role the small business play in the process of innovation in the U.S. economy. He explainedhow “incubators” are used successfully in the United States to encourage small entrepreneurs.The problem is how best to

CLASSIFICATION OF ENTREPRENEURS

I. According to the Type of Business Entrepreneurs are found in various types of business coronations of varying size. We may broadly classify them as follows:

Business Entrepreneur: Business entrepreneurs are individuals who conceive an idea for a new product or service and-then creates a business to materialize their idea into reality. They tap both production and marketing’ resources in their search to develop a new business opportunity. They may set up a .big establishment or a small business unit. They are called small business entrepreneurs when found in small business units such as printing press, textile processing house, advertising agency; readymade garments, or confectionery. In a majority of cases, entrepreneurs are found in small trading and manufacturing business and entrepreneurship flourishes when the size of the business is small.

Trading Entrepreneur: Trading entrepreneur is one who undertakes trading activities and is not concerned with the manufacturing work. He identifies potential markets, stimulates demand for his product line and creates a desire and interest among buyers to go in for his product. He is engaged in both domestic and overseas trade. Britain, due to geographical limitations, has developed trade through trading entrepreneurs. These entrepreneurs demonstrate their ability in pushing many ideas ahead to promote their business.

Industrial Entrepreneur: Industrial entrepreneur is essentially a manufacturer, who identifies the potential needs of customers and tailors a product or service to meet the marketing needs. He is a product- oriented man who starts in an industrial unit because of the possibility of making some new product. The entrepreneur has the ability to convert economic resources and technology into a considerably profitable venture. He is found in industrial units as the electronic industry, textile units, machine tools or videocassette tape factory and the like.

Corporate Entrepreneur:

Corporate entrepreneur is a person .who demonstrates his innovative skill in organizing and managing corporate undertaking. A corporate undertaking is a form of business’ organization, which is registered under some statute or Act, which gives it a separate legal entity. A trust registered under the Trust Act, or companies registered under the Companies Act are example of corporate undertakings. A corporate entrepreneur is thus an individual who plans, develops and manages a corporate body. Agricultural Entrepreneur: Agricultural entrepreneurs are those entrepreneurs who undertake agricultural activities as raising and marketing of crops, fertilisers and other inputs of agriculture. They are motivated to raise agriculture through mechanization, irrigation and application of technologies for dry land agriculture products. They cover a broad spectrum of the agricultural sector and include its allied occupations.

II. According to the Technology use The application of new technology in various succors of the national economy is essential for the future growth of business. We may broadly classify these. entrepreneurs on the basis of the use of technology as follows:

Technical Entrepreneur: A technical entrepreneur is essentially compared to a “craftsman.” He develops improved quality of goods because of his craftsmanship. He concentrates more on production than marketing. On not much sales generation by and does not do various sales promotional techniques. He demonstrates his innovative capabilities in matter of production of goods and rendering of services. The greatest strength, which the technical entrepreneur has, is his skill in production techniques.

Non-technical Entrepreneur: Non-technical entrepreneurs are those who are not concerned with the technical aspects of the product in which they deal. They are concerned only with developing alternative marketing and distribution strategies to promote their business. Professional Entrepreneur: Professional entrepreneur is a person who is interested in establishing a business, but does not have interest in managing or operating it once it is established. A professional

entrepreneur sells out the running business and starts another venture with the sales proceeds. Such an entrepreneur is dynamic and he conceives new ideas to develop alternative projects.

III. According to the Entrepreneur and Motivation Motivation is the force that influences the efforts of the entrepreneur to achieve his objectives. An entrepreneur is motivated to achieve or prove his excellence in job performance. He is also motivated to influence others by demonstrating his business acumen.

Pure Entrepreneur- A pure entrepreneur is an individual who is motivated by psychological and economic rewards. He undertakes an entrepreneurial activity for his personal satisfaction in work, ego or status.

Induced Entrepreneur- Induced entrepreneur is one who is induced to take up an entrepreneurial task due to the policy measures of the government that provides assistance, Incentives, concessions and necessary overhead, facilities to start a venture. Most of the induced entrepreneurs enter business due to financial, technical and several other facilities provided to them by the state agencies to promote entrepreneurship. A person with a sound project is provided package assistance to his project. Today, import restriction and allocation to production quotas to mall units have induced many people to start a small-scale industry. Motivated Entrepreneur New entrepreneurs are motivated by the desire for self-fulfillment. They come into being because of the possibility of making and marketing some new product for the use of consumers. If the product is developed to a saleable stage, the entrepreneur is further motivated by reward in terms of profit.

Spontaneous Entrepreneur- These entrepreneurs start their business their by Entrepreneur. They are persons with initiative, boldness and confidence in their_- ability, which activate, them, underage entrepreneurial activity. Such entrepreneurs have a strong conviction and confidence in their inborn ability.

IV. According to the Growth and Entrepreneurs The development of a new venture has a greater chance of success. The entrepreneurs a new and open field of business. The customer’s approval to the new product gives them

psychological satisfaction and enormous profit. The industrial units are identified as units of high growth, medium growth and low growth industries and as such we have “Growth Entrepreneur” and “Super-Growth Entrepreneur.” Growth Entrepreneur: Growth entrepreneurs are those who necessarily take up a high growth industry, which has substantial growth prospects.

Super-Growth Entrepreneur: Super-growth entrepreneurs are those who have shown enormous growth of performance in their venture. The growth performance is identified by the liquidity of funds, profitability and gearing.

V. According to the Entrepreneur and Stages of Development Entrepreneurs may also be classified as the first generation entrepreneur, modern entrepreneur and classical entrepreneur depending upon the stage of development. They are explained below:

First-Generation Entrepreneur: A first-generation entrepreneur is one who starts an. industrial unit by innovative skill. He is essentially an innovator, combining different technologies to produce a marketable product or service. .

Modern Entrepreneur: A modern entrepreneur is one who undertakes those ventures, which go well along with the changing demand in the market. They undertake those ventures, which suit the current marketing needs.

Classical Entrepreneur: A classical entrepreneur is one who is concerned with the customers and marketing needs through the development of a self-supporting venture. He is a stereotype entrepreneur whose aim is to maximise his economic returns at a level consistent with the survival of the firm with or without an element of growth.

VI. Others Innovating entrepreneurship is characterized by aggressive assemblage in information and analysis of results, deriving from a novel combination of factors. Men / women in this group

are generally aggressive in experimentation who exhibit cleverness in putting attractive possibilities into practice. One need not invent but convert even old established products or services by changing their utility, their value, and their economic characteristics into something new, attractive and utilitarian. Therein lies the key to their phenomenal success. Such an entrepreneur is one who sees the opportunity for introducing a new technique of production process or a new commodity or a new market or a new service or even the reorganization of an existing enterprise.

Creativity and innovation.

IV. TECHNIQUES FOR DEVELOPMENT OF CREATIVITY AND INNOVATION Value of entrepreneur is recognized by the concepts such as creativity and innovation. Schumpeter believes that entrepreneur can only be a person who is different from others. Therefore, entrepreneur is an individual who is extremely talented, capable to introduce novelty, prepare creative ideas, initiate and use changes. It was believed earlier that entrepreneurs were born, so an individual who had a good intuition could conduct such work. However, the situation is slightly different today. Namely, today's entrepreneurs grow into professionals who rely more on their knowledge, gained by education, and intellectual abilities they have. There are three types of skills that potential entrepreneurs must master before they enter the business project: technical, human and conceptual [8]. It is

believed that by mastering these skills, entrepreneurship can be learned like any other profession. Therefore, entrepreneurs are not born, but created. Some entrepreneurs are less, some more talented to carry out entrepreneurial activities, and therefore the techniques for stimulating creativity and innovation have been formulated. According to [12], there are six methods of stimulating creativity and innovation: (1) Brainstorming - means the emergence of new idea, suddenly, all at once. Group members suggest as many ideas as possible, on the basis of which the potential solution to the problem is defined.

(2) Brainwriting - means presenting the problem to the group, where individuals write down ideas for solving the problem and then change their sheets and discuss ideas.

(3) Method of Creative Orientation - is a method which includes: bionics as a skill that is based on the application of knowledge on living systems for solving social problems; searching for solutions according to heuristic principles, starting from the existing product where possible changes in such product are examined; searching of examination area starting from observation of the current situation from another angle.

(4) Method of Creative Confrontation - is a method which includes: classic synectics, synectics conference, visual synectics, analysis by stimulating words, BBB method, Force-Fit game, Tilmag method, method of integration of adjacent fields, semantic intuition, forced connection, catalog technique.

(5) Method of Systematic Structuring - is a method which includes: morphological box, specifying the list of attributes, showing problem fields, sequential morphology, decision tree, process analysis. These methods try to encourage intellectual and rational thinking of people. (6) Method of Systematic Specification of Problem - is a method which includes: progressive abstraction, epistemological analysis, K-J method, N-M method, hypothesis matrix, relevance tree.

According to [7], techniques for stimulating creative ideas and innovations are the following: (1) Brainstorming - develops ideas about the problem within a limited period of time, along with spontaneous contributions of participants;

(2) Reverse Brainstorming - is based on finding shortcomings of an idea;

Creative problem solving Creativity training usually includes some training in techniques which promote divergent thinking .

The Creative Problem Solving (CPS) program, sometimes called the Parnes-Osborn model was developed by Parnes and colleagues. It consists of six stages of creative problem solving: mess finding, problem finding; idea finding; solution finding and action planning.

Most researchers agree that ongoing creativity requires more than individual idea generation.

The idea selection process, idea evaluation and implementation are critical to success

commonly used in studies of innovation in firms. Other variations include idea combination,

idea aggregation, idea selection and transformation of the everyday. A review of creative

problem solving training in the workplace indicates that training in creative problem solving

enhances organizational performance

rough

1. UNDERSTANDING ENTREPRENEURSHIP CHAPTER 1 ENTREPRENEURSHIP

2. Chapter Objectives To understand the evolution of the term – ‘entrepreneur’ To study the reasons for the current growth in entrepreneurship To list various reasons driving a person to starting a business To explore the characteristics and skills of successful entrepreneurs To classify different types of entrepreneurs To look at the reasons for entrepreneurial failure

3. The Entrepreneur entreprende , which means – ‘to undertake’ Webster dictionary – one who organizes, manages and assumes the risks of a business or enterprise Richard Cantillion – an entrepreneur is someone who takes the risk of running an enterprise by paying a certain price for securing and using resources to make a product and reselling the product for an uncertain price.

4. Joseph Schumpeter - an innovator playing the role of a dynamic businessman adding material growth to economic development Timmons - Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled

5. Reasons for Growth of Entrepreneurship Industry Structure New technologies Deregulation and privatization Formation of new business communities Increasing demand for variety Government incentives and subsidies Increasing flow of information

6. Easier access to resources Entrepreneurial education Return on innovation Entrepreneur as a Hero Self-employment is highly valued Rising dissatisfaction at job Acceptance of ex-entrepreneurs in the job market

7. Gurubhai and Dhirubhai Both start their career from the gulf Both come to Mumbai to deal in synthetic yarn Guru’s battle against an anglicized scion of an established business family seems to mirror Ambani’s spat with Nusli Wadia. Guru’s success in getting people to invest in his IPO is similar to what happened in Ambani’s case. Mithun Chakraborty plays a newspaper owner in the film and his character resembles Ramnath Goenka. The virulent attacks of the newspaper on Guru are similar to what is alleged of Indian Express and Reliance in real life.

8. Impact of Entrepreneurial Firms Job Creation Economic growth New Technology Serving small markets

9. Why Start a Business? Control The idea Flexibility Money

10. Pros & Cons You are the boss All profits are yours There will be great variety in roles and tasks Increases self confidence Work can be very satisfying Success will give you immense satisfaction You are alone All decisions are yours All losses are yours Work may not be satisfying You will need to put in long hours Lack of success will effect self esteem Exiting the business is difficult Pressures will affect social and family life

11. Entrepreneurial Characteristics Timmons: commitment and determination; leadership; opportunity obsession; tolerance of risk, ambiguity and uncertainty; creativity, self-reliance and ability to adapt; and motivation to excel.

12. Bianchi being an offspring of self-employed parents; being fired from more than one job; being an immigrant or a child of immigrants; previous employment in a firm with more than 100 people; being the oldest child in the family; and being a college graduate.

13. Entrepreneurial Skills Creativity and Opportunity Evaluation Real-time Strategy and Decision Making Comfort with Change and Chaos Teamwork Evangelism, Selling, Negotiation, and Motivation through Influence and Persuasion Oral and Written Communication Basics of Start-Up Finance, Accounting and Law

14. Entrepreneurial Attitudes Comfortable with lifestyle changes Willingness to break / bend / stretch laws Patience to start small Prepared to make enemies Comfort with confrontations Dealing with failure Willingness to learn

15. Entrepreneurial Motivation Entrepreneurial Motivation Personal Characteristics Personal Goals IDEA Environment Entrepreneurial Activity Expectations Outcomes Match

16. Types of Entrepreneurs Based on Timing of Venture Creation: Early starters Experienced Mature Based on Socio-cultural Variables: 1st generation entrepreneurs From Business families Minority entrepreneurs Women Entrepreneurs

17. Based on Entrepreneurial Activity: Novice Serial Portfolio

18. Reasons for Entrepreneurial Failure Lack of experienced management Few trained or experienced human resource Poor financial management Rapid growth Lack of business linkages Weak marketing efforts Lack of information Incorrect pricing Improper inventory control Short term outlook

19. Thank you

20. Chapter Objectives To understand the importance of the business idea To explain the significance of a ‘new’ business idea To formulate a pre-selection process to precede the search for a business idea To list the possible source of business ideas To describe the process of researching a business idea To develop a comprehensive framework for evaluating business ideas

21. Warren Buffer says, “Today’s successful companies live and die according to the quality of their ideas”. Peter Drucker, “Innovation is the specific instrument of entrepreneurs, the means by which they exploit change as an opportunity for a different business”

22. First Mover Advantages Technological leadership: can also lead to Cost advantages Economies of scale Obtain and secure scarce resources before crowding Impose switching costs on buyers Disadvantages Reveal underlying business concept Others can try different resource combinations Investments in resolving problems: others can benefit from learnings Inertia makes it difficult to abandon strategy no longer effective

23. Pre-selection Uncover your personal traits Knowledge and Experience Goals and aspirations Technical knowledge Domain knowledge Contacts

24. Sources of Business Ideas Past work experience Hobbies and interests Strengths and abilities Friends and family Distribution channels Travel Books and magazines Current trends Research organizations The web

25. Brainstorming Some of the important ‘rules’ are as follows: Focus on quantity. Postpone criticism. Build on others’ ideas. Encourage crazy ideas. Work with a deadline.

26. Preliminary Research Cost structure Market structure Technology HR issues Government regulations

27. Mind Maps

28. Five Questions Framework Q1. Which is the market segment being targeted? Q2. What is the business model? Q3. How big is your market? Q4. How can you protect your business? Q5. What are you getting out of it?

29. Porter’s Five Forces

30. SWOT Analysis STRENGTH WEAKNESS OPPORTUNITY THREAT

31. Thank You

32. INTELLECTUAL PROPERTY CHAPTER 3 ENTREPRENEURSHIP

33. Chapter Objectives To understand the importance of intellectual property in modern business To explain the laws protecting trademarks, patents, designs, copyrights and other intellectual property To describe the procedure for registration of trademarks, patents, etc. To develop a strategy for building and protecting intellectual property To comprehend the significance of trade secrets and other confidential information

34. IP Laws in India IP laws in India cover the following: Trademarks Copyright Patents Geographical indication of goods Designs Others including Semiconductor layout designs, plants and farmer rights and biological diversity.

35. Interesting Trademarks numbers can be trademarks like in the case of 501 tea and 555 cigarettes symbols like those of Mercedes Benz or apple computers letters like in 3M, IBM, NIIT Orange cellphone service has successfully managed to include the colour orange as its trademark. sound like MGM’s ‘roar of the lion’ can also be a trademark Sumitomo tyres has registered a rose like smell as its trademark

36. Assignment of Trademarks Trademark search Application for registration Receipt and examination Acceptance, advertisement and opposition Cancellation

37. Particulars of Application The class of goods for which the mark is sought. Classes can be textiles, food and confectionery, machine tools, etc. Definition of goods which is sought to be registered Details of the applicant including name, age, occupation, address and nationality Whether the trademark is in use or is proposed to be used. If in use, applicant must specify by whom and for what period.

38. Infringement of Trademarks The allegedly infringing mark must be either identical or deceptively similar to the registered trademark; The goods / services in relation to which the allegedly infringing mark is used must be specifically covered by the registration of the registered trademark; The use of the allegedly infringing mark must be in the course of trade; and The use must be in such a manner as to render the use likely to be taken as being used as a trademark.

39. Copyright Copyright confers protection to: Literary works Dramatic works Musical work Artistic works Cinematographic films and sound recordings

40. Dimensions of Copyrights Idea Expression Originality Fixation Fair use

41. Creators can prohibit others to: reproduce the work in any form, such as print, sound .video, etc record the work in a compact discs, cassettes, etc broadcast it in any form translate it to

other languages use the work for a public performance, like a stage drama or musical performance

42. Patents The following are criteria for patentability: Novelty Utility Inventive step

43. The following are not patentable: Inventions which are frivolous or contrary to established natural laws Inventions, the primary use of which, are contrary to morality or can cause harm to humans or the environment The mere discovery of a scientific principle without manifesting it in a product Discovery of a new use of an existing substance A new method of agriculture A business method A manufacturing process

44. Patent Filing process Filing application Publication of the application First examination report Grant Post-grant opposition

45. Assigning Use of Patent A patent holder may assign a patent to a 3 rd party. Their agreement will have the following elements: The term of the agreement The territorial exclusivity of the rights Financial terms including payments of fixed and variable amounts to the patent holder Specification of production capacities to be set up and marketing budget to be committed Commitments from the patent holder regarding performance of the invention Any other provisions which may be deemed necessary

46. Geographical Indication of Goods The GI should pertain to a defined territory A given quality or reputation should be attributable to goods originating from that region Registration of a GI confers the right to use the GI in relation to goods for which GI is registered Also, right to obtain relief in case of infringement Rights under GI Act, cannot be assigned, transferred or transmitted.

47. Designs Criteria for registration: The design has to be original Designs are registered only when they can be applied to an article An article, in turn, is defined as any article of manufacture and any substance, artificial or natural, and includes any part of an article capable of being made and sold separately. The elements of design must be capable of existence separate from the article on which they have been applied. The design must be of a distinctive nature and must appeal to people.

48. The following designs will not qualify for protection under the Design Act: Methods or principles of construction Features dictated by function A mechanical device A trademark Designs which can be construed as immoral

49. Other IP Laws The Protection of Plant and Varieties and Farmer Rights Act, 2001 The Biological Diversity Act, 2002 Semiconductor Integrated Circuits Layout Act, 2000

50. Non Disclosure Agreement NDA should have the following elements: An NDA should define what information is confidential. Agreements should have clauses on restrictions on disclosure, copy and use of information Restrictions on use of information when in employment and upon termination of employment. Requirements relating to return of confidential documents and paperwork upon termination of association Specification of penal clauses like withholding salary, imposing fines, etc Addition of non-compete clause in an NDA prevents employees and vendors from setting up competing businesses or helping competitors. Care should be also taken to ensure that employees do not violate the rights of third parties.

51. Protecting Trade Secrets Employees should be made to realize their responsibility to protect confidential material. Employees should be educated to identify confidential material Data and

information which is confidential should be marked as such. Access to sensitive material or sensitive areas of the workplace should be restricted on a need to know basis Interactions and disclosure to third parties should be channeled through specified responsible employees When leaving an organization, an employee should be reminded of his obligations with respect to confidential information through an exit interview.

52. FAMILY BUSINESS CHAPTER 4 ENTREPRENEURSHIP

53. Chapter Objectives Define a family business Discuss the history of family business in India Discuss the roles and responsibilities of the founder List the characteristics of able successors Describe the roles, rights and responsibilities of family members in a family business Explain the role of non-family managers Describe the issues in succession in a family business List the best practices in managing family business, from across the world. Entrepreneurship

54. What is a Family Business High percentage of share capital owned by a family either jointly or individually. Family members employed in the highest decision making posts Expression of intention to maintain family involvement in the future. A number of generations of the same family involved in management or ownership Direct descendants of the founders have management or ownership control

55. Advantages of a Family Biz There is a long term orientation as the continuity of the firm is of great concern to the older generations. The family culture is a source of great pride for family and non-family employees alike. The family firm functions in a less bureaucratic manner and it is not impersonal in dealing with employees and customers. Family firms have shown greater willingness to weather the bad times by ploughing back profits. It is structured to impart training to younger members of the family.

56. Disadvantages They may have a confusing structure where the role of many family members is not clearly defined. The style of functioning may be autocratic or patriarchal. Many of the younger generation may not be worthy of their position and role in the organization There can be very strenuous succession battles Sometimes family members can selfishly drain the finances from the company.

57. Roles of the Founder Starting the business Building the organization Providing guidance and direction to employees and family members Constructively involving family members in business Planning for succession

58. The Next Generation They know the business well. Ideally, they like or even love the nature of the business They know themselves and their strengths and weaknesses They have had the necessary outside experience and education They want to lead and serve They are guided responsibly by the previous generation, advisors and the board They have good interpersonal relationships particularly with other family members in business

59. The Next Generation They can count on competent non-family managers to complement their own skills They have controlling ownership either directly or through allies They have earned the respect of employees, suppliers, customers and other family members Their skills and abilities fit the strategic needs of the company They respect the past and focus their energies and resources on the future of the business and the family

60. Stepping Up A new entrant should have a track record that gives legitimacy to his ideas and his claims. It pays to consult the older generation while making the plan. Suggest a step by step

approach. If the plan is still not acceptable, accept that there may be something wrong with the plan.

61. Retaining Non-family Managers Discuss career paths in the company and clearly state if top positions are not open for them. Offer compensation and benefits that are at par with the others in the industry. Involve non-family managers in top level decision making by getting them to be part of decision making teams with other owner-managers. Set targets and use performance measures to build motivation. Achievement of targets provides significant motivation.

62. Retaining Non-family Managers Emphasise the contribution of non-family managers in company meetings. Treat family members like employees at work. It helps build a healthy atmosphere. Involve non-family managers in succession planning. Some senior non-family managers can be used as ‘bridge’ heads to smoothen the succession from one generation to another. Periodically assess the motivation level of non-family managers and the working relationship between family members and non-family managers.

63. Succession Planning Choose a successor Grooming the successor Planning Early entry Late entry

64. Advantages of Early Entry The successor becomes familiar with the nature of the business Gets a chance to develop relationships with other employees Gets to know other business associates Skills specifically required for the business can be acquired and developed Good performance during employment will lead to credibility with employees and other stakeholders

65. Advantages of Late Entry Success outside the firm establishes credibility Best practices from other firms are brought into the family business Business perspective of the successor is broad The successor’s competence is judged with greater objectivity.

66. Best Practices in Family Biz Communication Independence Shared Vision Documentation Conflict resolution

67. DOING BUSINESS IN INDIA CHAPTER 5 ENTREPRENEURSHIP

68. Problems Bureaucracy Corruption Labour Local Sentiments Gray Market Social Capital

69. Chapter Objectives To understand the ground realities of doing business in India To identify the socio-cultural issues facing an Indian entrepreneur To list the various forms of business ownership available in India To understand some of the major laws and regulations governing conduct of business in India

70. Bureaucracy Characteristics of ideal bureaucracy: Official business is conducted on a continuous basis Official business is conducted according to written rules Roles and responsibilities are defined within a hierarchy, with rights of supervision and appeal Official and private business and income is strictly separate

71. Factors Working Against Corruption There is greater transparency in procedures to be seen across government departments. The right to information act (RTI) has significantly changed the situation Lately the media too has played an active and visible role

72. Measures Against Gray Markets Manufacturers may drastically reduced prices to narrow the gap in prices in local and overseas markets. Warranties may not be extended to products not

purchased through the regular channels. Some high tech solutions have also been devised like the use of DVD regional codes to protect movies and other digital content.

73. Social Capital Negative consequences of ‘Pehchaan’: Exclusion of meritorious outsiders Excessive claims on group members Restrictions on individual freedom Norms aimed at downward leveling

74. Types of Ownership Sole Proprietorship Partnership Company Limited Liability Partnership Small Company One Person Company

75. Taxes, etc Income tax Sales tax Excise Service tax Profession tax

76. Features of VAT Input tax credit even on capital goods Credit is carried forward for 2 yrs and then it is refunded in case it cannot be offset Uniform rates throughout the country Self assessment of possible tax liability is allowed Audit In case of excess payment, refund is made within 60/90 days Interest can be claimed on delayed payments

77. Paying VAT Sell after stock transfer Be careful of bogus stock transfer Collect Forms C D F & H on time Advise your dealer to be registered Use ‘input tax credit’ on capital goods Encourage dealers to get registered Ensure that purchase and sales registers and stock- books are maintained Claim interest for delayed payment

78. Central Excise Find out if the product is excisable Find out its classification Find out its rate of duty Pay the tax File returns

79. Paying Excise Bill directly to the buyer Advice all distributors and dealers of your products to be registered Avail of SSI concession if your unit is eligible Know your product properly. There may be an opportunity for reclassifying your product in a lower rate slab. Avail of all concessions under ‘ CENVAT ’ Let the customer pay separately for add-ons like transport and warehousing expenses so it does not get included in calculating the total excise liability

80. Other Regulations Company law Labour law Import Export Pollution control

81. ENTREPRENEURIAL SUPPORT CHAPTER 6 ENTREPRENEURSHIP Entrepreneurship

82. Chapter Objectives Discuss various sources of support for the entrepreneur List policies from all over, that help entrepreneurs Discuss how to evaluate these policies Describe the benefits of a business incubator Explain the intricacies of incubator management Define a business cluster Discuss identification and development of clusters Entrepreneurship

83. Entrepreneurial Support Support in the form of progressive policies which help entrepreneurial ventures. Incubators – which are set up to provide support to new firms in the early stages. Business clusters – which are made up of firms in the same industry in close proximity to one another.

84. Aims of Policies Entrepreneurship education: Entrepreneurial skills: Access to debt: Stimulating Innovation: Access to equity: Simplifying administrative burden: Access to markets: Encourage weaker sections:

85. Evaluating Policies Take up of policy Opinion of beneficiaries Comparing performance

86. Incubators Benefits from an incubator Access to shared flexible spaces Shared offices services Providing a business consulting network Networking Facilitating access to capital

87. Incubator Management There should be an incubator manager and a team of professionals The incubator should set clear guidelines for eligibility. An incubator should have clear cut guidelines for an admission process. A contract should be signed by the incubator and the entrepreneur laying down all the terms and conditions. Clear guidelines for the entrepreneur’s exit should also be laid out The long term financial viability of the incubator will depend on its business model.

88. Revenue Streams for Incubators A fixed rental to cover the cost of basic infrastructure A usage based charge for services like conference room, copier, etc. A success fee which can be in the form of an equity stake in the new venture.

89. Exiting an Incubator The entrepreneur should exit: After a fixed period When the start up receives substantial funding When it achieves a certain level of profitability In case of irresolvable disputes

90. Some of the successfully incubated companies from SINE, the incubator at IIT, Bombay Herald Logic Pvt. Ltd. Voyager2 Infotech Myzus Technologies eInfinitus Powai Labs Pvt. Ltd. Seclore Technology Pvt. Ltd Eisodus Networks Pvt. Ltd. Quantum Phynance Pvt. Ltd.

91. Business Clusters A geographical concentration of industries that gain performance advantages through co-location Well developed and intense links with suppliers Formal and informal business networks Shared supporting infrastructure like buildings and road connections A certain level of cooperation in spite of a high degree of rivalry and competition

92. International Clusters Auto industry in Detroit Paris for high fashion Antwerp for diamonds Hollywood for movie production 5th Avenue in New York for Advertising Hsinchu in Taiwan for high technology Entrepreneurship

93. Indian Clusters IT firms in Bangalore Diamond polishing in Surat Textiles in Tirupur Seafood processing in Kochi Call Centres in Gurgaon / NCR Jute mills in Kolkata

94. Benefits of Clusters Michael Porter: productivity of the companies in the cluster increases there is increased scope for innovation in the sector new businesses are encouraged to come up

95. Types of Clusters A vertically-integrated cluster is made up of businesses linked through intense buyer-seller relationships. A horizontally-integrated cluster is made up of businesses which share a common market for their end products, use a common technological base or common skilled workforce, or require similar raw materials. Entrepreneurship

96. Cluster Development Supplier buyer relationships can be forged by collecting and distributing information about potential industry linkages. Common infrastructure can be supported by external agencies. Especially in the case of industries heavily dependant on specialized skills, providing skills training and education is a good means of supporting a cluster. Industries in a cluster can be aided by providing marketing channels.

97. BUYING A BUSINESS CHAPTER 7 ENTREPRENEURSHIP

98. Chapter Objectives To list the benefits of buying an existing business To list the disadvantages of buying an existing business To discuss the possible sources of information about a business for sale To describe a step by step process of buying a business To tabulate the factors to be investigated before a purchase To understand various methods of valuing a business To discuss the major mistakes made in buying a business To understand the concept of franchising To list the benefits of being a franchisee To discuss the factors important in evaluating a franchise opportunity To describe the elements of a franchise agreement Entrepreneurship

99. Advantages of Buying a Business Buying an existing business will enable you to go around a lot of problems likely to crop up in opening a business. The existing business would have already got some licenses and government approvals which would be otherwise difficult to get. Land is scarce and it is difficult to find an appropriate location. An existing business is likely to come bundled with the land. The plant and machinery have already been bought and have been installed and tested. Employees are experienced. A supplier base has already been established. Entrepreneurship

100. Advantages of Buying a Business There is a readymade market. A distribution network has been set up and money and effort has already been invested in establishing a rapport with retailers and wholesalers. Goodwill and reputation would have been built up. Cash flow is going to start immediately. Banks may be more willing to lend to a business with running operations, an established customer base and a steady cash flow. It might be cheaper than setting up new operations. The former owner may be persuaded to guide you in the early days. This free advice may prove to be invaluable. Entrepreneurship

101. Disadvantages The industry as a whole is not doing well and the situation is not likely to improve in the near future. The owner may not have been truthful about the business. The equipment could be old and outdated. The location is bad or is likely to become bad. Employees may be unproductive or incapable of meeting the standards required of them. Entrepreneurship

102. Disadvantages Any bad reputation that the business had acquired amongst suppliers, distributors and other people in the industry is likely to pass on to you. The previous owner may have got into some unfavourable long term contractual obligations The inventory lying in stores could be obsolete or unfit for use. If the company’s products have not been received well by the market it will be harder to gain market share than it would have been for a new product. Entrepreneurship

103. Buying a Business Preliminary information collection Site visit Scrutiny Additional information collection Negotiation Transition

104. Getting Information The industry Accountants, lawyers Bankers Advertisements Others

105. Scrutiny Financial statements Other statutory documentation Valuation of capital equipment Inventory Licenses and permits Contracts with customers and suppliers Debt and accounts payable Accounts receivable Reputation of the firm

106. Valuation Value of assets Book value Replacement value Market value Return on investment Payback period Discounted cash flow

107. Negotiations Elements other than cash: Combination of stock and cash Accounts receivable Lease; with option to buy Non-compete clause

108. Common Mistakes While Buying Scrutunise claims Risk vs returns Valuation of receivables Antagonising the seller

109. McDonalds Arguably the most successful franchise chain Operates 30,000 outlets in over 100 countries Became a success after Ray Croc bought it from the McDonald Brothers

110. Franchising

111. Advantages of a Franchise By taking a franchise, you get a proven system of operation. The franchisor allows you the use of an established brand name. The franchisees can also use professionally designed point of sale advertising materials, packaging material, posters and print and TV ads. This brand recognition is driven by national and regional advertising programmes. The franchisor will often train the franchisee and the franchisee’s employees before letting a new franchisee start the business.

112. Advantages of a Franchise Ongoing product development and research is another advantage of being with a franchise chain. Large companies can gain from economies of scale but that would not be possible for individual entrepreneurs. The cost of starting up the franchise operations and the ongoing operating costs are very well documented by the franchisor and the details are shared with all prospective franchisees. A franchisor can add value by putting a quality program in place. The franchisor often does market research to find out if the market is big enough to support an outlet.

113. Choosing a Franchisor It is good to get into an industry that is growing and shows signs of sustaining a rate of high growth over the next few years. It is also important to take into account, the performance of the franchisor’s products in the market. It is better to choose a franchisor, which has been in this business for a long time. It is disadvantageous to become one of the initial franchisees in a chain. The reputation of the franchisor counts for a lot.

114. Choosing a Franchisor The franchisor’s relationship with other franchisees is also a very important factor to consider. Take a close look at the profitability indicated in the figures shared by the franchisor. Some of the assumptions made while arriving at those figures may need to be changed. It might need a good amount of investigation to come up with accurate estimates of the success rate of franchisees.

115. The Franchise Agreement The size and location of space needed The franchise fee including down payment and continuing royalties Refundable deposits A franchisee’s allotted territory The range of products and services which are offered by the franchisor

116. The Franchise Agreement Training and who pays for it Advertising and who pays for it Any other assistance No-compete clauses Dispute resolution and legal recourse

117. ENTREPRENEURIAL FINANCE CHAPTER 8 ENTREPRENEURSHIP

118. Chapter Objectives To list the various sources of debt finance To understand the process of securing debt finance To discuss the importance of collateral security To tabulate the lending strategies of banks To discuss the characteristics of venture capital To understand the structure of venture funds To list the various roles within a venture fund To understand how venture capitalists get compensated for their efforts To describe a step by step screening process followed by venture funds while making an investment To list the elements of a termsheet To understand the current scenario of VC funding in India

119. Disadvantages of Equity Finance Dilution of shareholding Increased 3rd party governance Increased external controls Increased commitment to stated strategy

120. Sources of Debt State Finance Corporations NBFC Banks

121. Securing Debt Drawing up the business plan. Identifying sources of debt finance. Presenting the proposal to the bank. If the manager is considering your proposal favourably, you will have to go for further talks Once the two parties have broadly agreed, details have to be worked out. Entrepreneurship

122. Principles of Good Lending Purpose Safety Profitability Other considerations

123. Security Collateral Inside Outside Personal guarantee Maturity Covenants Menu pricing

124. Lending Strategies Financial statements Relationship lending Length of relationship Breadth of relationship Degree of trust Credit scoring

125. Venture Capital Venture capital is characterized by: Financing of new and potentially high growth companies Investments primarily in the form of equity participation Assistance in the early days of the enterprise Adding value to the company through active participation, even joining the management on occasions Willingness to take on higher risk Expectation of higher rewards A long-term outlook regarding the investment Entrepreneurship

126. Roles in a Venture Fund General partner Investor Venture partner Entrepreneur-in-residence Others

127. Screening by VCs Get rid of scamsters Major broad concerns Growth and industry considerations Monetising value

128. Important Considerations The entrepreneurial team Personal or individual characteristics Experience of the individual Ease of exit Via IPO Sale to PE, etc

129. The Termsheet Amount and terms of investment Dividend policy Composition of the board of directors Reporting Liquidity (exit) plans Rights of sale Warranties Matters requiring venture capitalist approval Entrepreneurship

130. Problems Facing VCs in India Large established firms with strong growth figures look like a very attractive proposition. Investments in public listed firms are giving returns in excess of 30%, at far lesser perceived risk Small firms in India are informationally opaque. Indian entrepreneurs are perceived as lacking in marketing and management skills. Indian entrepreneurs are more reluctant to give up controls than their western counterparts. VCs face an exit challenge as the capital markets in India are still shallow Brand ‘India’ is strong only in some manpower driven services sectors like IT and ITES. Entrepreneurship

131. Sectors Favored by VCs IT and IT-enabled services Software Products Wireless and telecom Banking and financial services Divestments in public sector units Media and entertainment Biotechnology Pharma and diagnostics High technology Manufacturing Retail

132. MAKING A BUSINESS PLAN CHAPTER 9 ENTREPRENEURSHIP

133. Chapter Objectives To understand how a business plan is divided into sections To list the uses of a business plan To lay out the steps involved in writing a business plan To list out data

required in drawing up a business plan To discuss about the various types of business plan To understand the significance of an executive summary To understand the structure and composition of various sections of a business plan To list the various appendices and exhibits needed in a business plan

134. Uses of a Business Plan Equity funding Bank finance Alliances Recruitment Clarify the business Others

135. Kinds of Business Plans Summary Plan Executive summary Full Business Plan Operational Business Plan The oral presentation

136. Steps in Writing a Business Plan Define purpose Collect Information Put it down The rough draft. Financial analysis Finishing Review

137. Data Required Company details Documents relating to formation Shareholding details Permits and registrations Management Organization chart Details of key employees Consultants and advisors Compensation and other employee agreements Industry and Competitors Market statistics from secondary sources Reports on trends, etc Competitor data Customer surveys

138. Data Required Operations Product specifications Contracts and purchase orders for raw materials Competitive advantages Details of Intellectual Property (Patent, license, and trademarks) Regulatory approvals Industry standards as per regulations Plant layout and operations plan Research and development plans Marketing and Sales Marketing plan Advance orders, if any Marketing materials Financial Information Data on fixed and variable costs to be incurred Financial forecasts

139. Key Sections of a Business Plan Executive summary The company The management team The industry and the market Operations The marketing plan Financial plan Risks and contingencies Appendices

140. Executive Summary The executive summary is probably the most important section of the business plan. It is basically the whole business plan condensed into a few pages The main objective of the executive summary is to entice the reader to go through the entire plan.

141. The Company History Current Status Future

142. The Management Team Technical and professional qualifications Quality of work experience Experience in the relevant sector Reputation in the business community Evidence of moral integrity Financial capacity Networking with other vital people in the industry

143. The Industry and the market An industry is a collection of sellers A market is a collection of buyers Concentrate on the relevant segments Competition

144. Operations Gantt chart outline setup Technology Raw material strategy Production planning Quality HR policy

145. Marketing Target Segments Branding Product Packaging Pricing Distribution Promotion

146. Finance Funds sought Projected financial statements Costing details Break even and payback analysis

147. Risks and Contingencies Identify major threats and risks Outline strategies for countering them

148. Appendices Copy of documents pertaining to incorporation or formalisation of partnership. CV’s of the entrepreneur/s and of key employees Copies of various permits or permissions granted. Copies of papers pertaining to sale or lease of land for the business Copies of documentation of proprietary intellectual property Graphical representation of schedule including milestones and dates Photographs of location Factory or plant layout Graphical representation of production process

149. Appendices Findings of market survey conducted Photograph of product or prototype Storyboards or mock-ups of advertisements Projected balance sheets Projected profit and loss accounts Projected cash flow statements Sensitivity analysis of P&L a/c Break even analysis Financial ratios

150. MANAGING OPERATIONS CHAPTER 10 ENTREPRENEURSHIP

151. Chapter Objectives To understand the importance or correct purchasing in a venture To list the activities involved in purchasing To tabulate the elements of a purchase policy To discuss the ways to evaluate suppliers To discuss the best practices in purchasing To list the kinds of inventory carrying costs To classify different kinds of inventory To understand the importance of cash management To understand the role of the cash manager To appreciate the challenges posed by cash flows To understand the principles of receivables management To discuss managing for disasters To understand the strategies followed by seasonal businesses

152. Purchase Unplanned purchasing can lead to: spending more money than you need to buying goods that aren't of the proper quality choosing suppliers that don't offer the required level of customer service Entrepreneurship

153. Role of the Purchase Manager gather orders from various departments make sure the orders are complete, stay within specified spending parameters select appropriate vendors order for the goods check condition upon receipt check to make sure the invoice is correct ensure timely payment of the invoice by forwarding it to the accounting department communicate effectively with the suppliers on various issues

154. Purchase Policy The purchase policy should address the following issues: Who is authorized to purchase various goods? How is the budget set for a purchase? How does the venture hope to ensure competition among vendors? How to ensure quality of received goods? What will be the payment system? What will be the level of confidentiality between the venture and vendors? Entrepreneurship

155. Suppliers Evaluate a supplier on: Timely delivery Completeness of orders shipped Quality of items Price competitiveness Strength of financial condition Ability to service special orders Quality of customer service Expertise of sales representatives and technical staff Consistency on above factors

156. Prioritising Purchases Some items need more attention than others, on the basis of: Unit cost Total cost Time to delivery Quality Criticality

157. Inventory Costs of carrying inventory Interest on the financial investment in inventory. Cost of insurance covering inventory. Rental or ownership related costs of the store Cost of handling inventory Obsolescence Pilferage, wastage or deterioration of stock

158. Types of Inventory On the basis of stage in process: Raw Materials Work In Progress (WIP) Finished goods Goods for resale

159. Types of Inventory On the basis of reason for stock to be held: Buffer stock Safety stock Overproduction Lot delay stock Demand fluctuation stock Line balance stock

160. Cash Management The efficient utilization of current assets and current liabilities throughout each phase of the business cycle. The systematic planning, management and monitoring of the company’s collections and disbursements. The collection, management and dissemination of information to enable effective use of available funds.

161. Good Vs Bad Cash Management Increasing the possibility that your business never runs out of cash. Eliminating the constant worry associated with not knowing your current and future cash position Improved relationships with your vendors as a result of good payment practices. The ability to foresee cash flow problems long before they actually happen. Suppliers are going to be dissatisfied with late paymentsand that will lead to higher prices, late deliveries or quality problems. If you are unable to meet salary obligations on payday, employees are going to be worried about the financial stability of the firm. If your cash problems are a result of tardy collections, customers will stand to gain a lot by not paying up and taking their business elsewhere.

162. Cash Manager Role of the cash manager: Efficiently collecting cash inflows Concentrating collected funds Controlling the timing of cash outflows Forecasting the cash position Securing adequate sources of short-term funds Optimizing use of any temporary cash surpluses Gathering timely information Implementing the systems necessary to monitor, manage and control the cash position Ensuring the internal and external transfer of financial data between departments or with the bank.

163. Cash Problems As a result of business growth, cash can be: Mismatched Irregular Unpredictable

164. Collecting Accounts Receivable Investigate new customers. Supply against written orders. Sign on a legal contract. Maintain close contact with customers. Get and repeat positive feedback. Send invoice ASAP.

165. Collecting Accounts Receivable Contact before sending invoice. Keep a close watch on customer’s fortunes. Immediately contact on any delayed payment. Be firm Allow a customer to graduate in his credit ratings with you.

166. Managing During Disasters Identify risks Reduce risks Plan Train Getting back to business

167. Seasonal Businesses Seasonal businesses try to cut costs during the off season. The easiest way to do that is to cut down operations is seasons of low demand. By design some seasonal businesses have low installed capacities but create additional capacities for the season. E.g. restaurants putting in additional seats during a festive occasion are common sight in all major cities.

168. Many businesses which close down during the off season depend on temporary labour and sometimes even the infrastructure is leased for a short time only. Clothes exhibitions that spring up in temporary shamianas (tent) are also another familiar sight in all cities.

169. The off season is a very good time to carry out routine maintenance and repair work. In case the business is doing very well, the off season is a good time to plan and execute expansion plans. In case the goods can be stocked, the fallow time in the off season can be use to smoothen out the production schedule. So the entire year can be used to plan out production, which is ultimately sol within a short time.

170. HUMAN RESOURCE MANAGEMENT CHAPTER 11 ENTREPRENEURSHIP

171. Chapter Objectives To discuss the process of hiring an employee To describe the interview process To discuss the induction process To understand the ways of motivating employees To discuss the important aspects of salary and perks To list the ways of providing training to employees To understand the process of firing an employee

172. Job Description Elements of a job description Details of the job responsibilities The qualifications desired The kind of experience the candidate should possess Salaries and other benefits to be given Career path

173. Hiring People you know personally can be good employees. A referral is the next best thing to knowing the candidate personally.

174. Other Sources Advertisements in local newspapers Posting on online job sites Accessing listed resumes Tapping a placement agency

175. Induction Signing of joining papers Narration about the company A tour of the facilities Early mentoring

176. Motivation Employees seek the following from their jobs: Recognition for good work done by them Meaningful participation in the venture’s endeavours A feeling of belonging and of sharing in the success of the organization Opportunities for growth in accordance with their competence and experience Security in their job as long as they perform according to expectations Monetary reward for performance in their job Benefits relating to medical expenses and insurance Entrepreneurship

177. Salary How employees measure their salary: The salary is comparable to salaries of others in similar jobs in other companies within the industry The salary being paid should be comparable to what the employee is likely to get in some other job. The salary should compare with salaries of others with similar responsibilities within the company The salary should be comparable to the salaries of his friends and peers outside the industry

178. Components of a Salary The fixed component Allowances Provident fund Medical insurance and a life insurance cover. Additionally, a medical reimbursement can be provided for incidental medical expenses. Annual bonus based on salaries or on performance. Employee stock option plan (ESOP)

179. Some Perks Work related awards and competitions Recreation room in the office An annual picnic or excursion Recognising achievements of employees and their family members in other spheres Employees can be encouraged to attend seminars, workshops and short term courses.

180. More perks Free or subsidised lunch in the office Discounts to employees on company products Involving employees in a joint social cause Employees can be allowed to work from

home on selected days Bonus can be given to some or all employees. Gifts like a watch or a household appliance on some important occasions

181. ENTREPRENEURIAL MARKETING CHAPTER 12 ENTREPRENEURSHIP

182. Chapter Objectives To look at the marketing constraints of entrepreneurial firms To list the characteristics of entrepreneurial marketing To tabulate market research practices in entrepreneurial firms To discuss the concepts of segmentation, targeting and positioning and their relevance to entrepreneurial marketing To understand the process of brand building in entrepreneurial firms To explore pricing in entrepreneurial marketing To look at the distribution function in small firms To explore non-traditional advertising in entrepreneurial firms To tabulate different types of promotional campaigns

183. Characteristics of Entrepreneurial Firms Limited resources Small size Newness

184. Entrepreneurial Marketing Proactive orientation Innovativeness Customer focus Opportunity focus Risk management Value creation

185. Market Research Field survey Systematic Observation Focus groups Secondary sources Test marketing

186. Field Survey Low cost field surveys: Convenience sampling Snowball sampling Omnibus sampling Low-cost surveyors

187. Good Market Research The researcher understands decision alternatives and the information required The relationship between results and the decision is understood by the entrepreneur and the researcher The results are communicated well. Poor research design and poor planning can delay the research or can result in erroneous conclusions. There is no fudging of data

188. Forecasting Demand Define the total market Divide total demand into distinct market segments Forecast drivers of demand in each segment Match with own product to come up with possible sales of own product in that segment Total the forecasted sales in the segments that can be profitably targeted Conduct sensitivity analysis to understand assumptions Entrepreneurship

189. Attractiveness of a Segment Is your product able to deliver the value sought by a segment, better than the competition? Can the segment be easily identified? Is the segment big enough in terms of potential revenue? How easy is it to reach the segment with the positioning communication and with the product? Entrepreneurship

190. Branding Strategic brand building Identity-building brand exposure Involve the customer in the brand building experience Borrow practices from across industries Pilot test novel ideas Have a ‘brand manager’ Monitor results Do not outsource

191. According to Aaker, the following are the difficulties in branding: Pressure to compete on price Proliferation of competitors Fragmentation of media and markets Brand relationships Bias towards changing strategy Bias against innovation Pressure to invest elsewhere Short term pressures Entrepreneurship

192. Costs and Pricing Producers costs indicate a floor price Customers cost indicates price sensitivity Competitor’s costs indicate their strength

193. Pricing Assess what value customers place on the product. Look for variations in the way customers value the product. Identify a pricing structure. Consider competitor’s reactions. Monitor realised prices. Assess customer’s emotional response to prices.

194. Pricing Percepts Pricing of a product should work towards maximising present worth The unit for making decisions and for measuring return is the entire economic life of the product Pricing begins before production commences and re-pricing continues for the entire life cycle Different pricing strategies can be used in different segments

195. Price Sensitivity Price sensitivity is less if a third party bears the cost. Sensitivity is high when the cost of the item is a significant portion of the individual’s total expenditure. Price sensitivity is higher in the case of B2B buyers as the buyer is not end user. When there is no differentiation between the products available, it becomes easy to compare products in the category and the price sensitivity of customers increase. Price sensitivity is more when there is easy access to competing products. Sensitivity decreases when there is a high cost of switching. When a long term relationship with the seller is not important, price sensitivity is low.

196. Response to a Price Cut Is there a response that would cost less than the preventable sales loss? If you respond, is competitor willing and able to reestablish the price difference? Respond Does the value of the markets at risk justify the cost of response? Respond While the multiple responses required to match a competitor cost less than the preventable sales lose? Respond Accommodate or ignore Is your position in other markets of risk? Competitive price cut or” low cost” product No No No No No Yes Yes Yes Yes Yes

197. Distribution Alternatives Go directly to the consumer Go directly to the retailer: bypass distributor Use sales agents Participate in establisher channel structure Set up your own intermediaries

198. Distribution Tasks

199. Buzz Marketing Most recent studies show that word-of-mouth is 10 times more effective than other media Media is getting fragmented and ad clutter is rising. Companies feel the need to stand apart Traditional forms of media are rising in cost. A 30 second slot during a cricket match on a TV channel can cost over seven lakhs. Too many marketers are making conflicting claims. The common man’s trust in ads is coming down. Many new technologies provide the impetus for the acceleration of buzz marketing. Entrepreneurship

200. Strategies for Buzz Give away valuable products or services Take advantage of others’ resources The proper transfer mechanism should be in place Give people a story to tell The entire self replicating communication should be scalable Utilize existing communication networks rather than creating new ones Entrepreneurship

201. Promotion Objectives in a promotional campaign: SALES Increase in distribution outlets Increase in shelf space Increased in-store presence Expand the selling season Increase purchase frequency Increase usage occasions Increase average transaction size Induce trial

202. Steps in Planning a Promotion Planning a promotional campaign Establish its objectives Plan on strategies and tactics Establish criteria for success Create back-up plan Review and test Put controls in place Roll out

203. Types of Promotions Contests Coupons Discounts Continuity Point Of Purchase Sampling Event Free gift Trade Promotions

204. Training Training of employees can be carried out by the following: Training institutes Business schools In House training Online

205. Firing Reasons for termination of employment: Indiscipline Impropriety Underperformance Lay off Resignation

206. Process of Termination An exit interview should be conducted and reasons for the termination should be honestly discussed. A letter of recommendation should be promptly given to the exiting employee. All terminal benefits and other payments due should be made promptly. All documentation citing the reasons for termination should be organized.

207. NEW PRODUCT DEVELOPMENT CHAPTER 13 ENTREPRENEURSHIP

208. Chapter Objectives To understand the importance of having a NPD process To list the types of new products To study the various stages of the NPD process To understand the adoption of new products To tabulate the best practices in NPD To look at various ways of involving customers in the NPD process To list various barriers to NPD To discuss the common mistakes in NPD Entrepreneurship

209. Types of New Products New-to-the-world products New product lines Additions to a product line Improvements and revisions of existing products Repositioning Cost reduction

210. Failure Rate of New Products “ Debugging” Stage Expected Product Life “ Wearout” Stage Time Number of failure

211. The NPD Process Opportunity identification Concept generation Concept evaluation Technical Development Launch Life Cycle Management

212. Product Testing Alpha testing Beta testing Gamma testing

213. The Adoption Process Awareness Interest Evaluation Trial Adoption

214. Adopter Groups According to Rogers, the adopter groups are: Innovators Early adopters Early majority Late majority Laggards

215. Entrepreneurship Adopter Categories 21/2% Innovators 131/2% Early adopters 34% Early majority 34% Late majority 16% Laggards Time of Adoption of Innovation

216. Adoption These five product characteristics influence product adoption: Relative advantage Compatibility Complexity Divisibility Communicability

217. Communicate with the customer Tap employees for ideas New product team Budgeting Letting go

218. Involving the Customer Lead user method Mapping the consumption chain

219. Barriers to NPD Shortage of funds Limited scope in some product categories Lack of time Restrictive laws and regulations Small markets Changing technology Changing consumer preferences Entrepreneurship

220. Common Mistakes in NPD No market research Hasty commercialization Focus on product Lack of communication Product availability Pricing it high Pricing it low

221. Success of Entrepreneur in Rural India PANKAJ KUMAR Rai Business School

222. Content Rural Enterprise :- Some Facts Agriculture Entrepreneurial Development Under TRYSEM Risk taking Among Rural Entrepreneur Development Strategy For Small Entrepreneur Entrepreneurial Development In Backward Area

223. RURAL ENTERPRISES: SOME FACTS Fair industrial activity in rural India. There are 42.12 million enterprises in the country engaged in different economic activities other than crop production and plantation of which 25.81 million (61.30%) are in the rural areas. The annual rate of growth of enterprises and employment in rural areas was 5.53% and 3.33% respectively as compared to 3.71% and 1.68% respectively in urban centers. Average annual growth in employment is higher in rural areas (3.33%) than in urban India (1.68%).

224. Towards enabling Rural Areas…. Agriculture

225. Risk Coverage Crops insurance KCC Other Loan

226. Information Technology Development Use of Village Internet kiosk and mobile phones for Obtaining market-prices in different Markets Transaction and deal-closing from villages Scheduling delivery Booking of transport Direct payment through banks and loan repayment

227. Training Programmed Skill Improvement Trainings Entrepreneurial Development Programmers ( EDPs ) Agriculture and Animal Husbandry Training on DTP Fashion Designing

228. Entrepreneurial Development Under TRYSEM

229. Component of TRYSEM Identification of entrepreneurial Quality. Identification of entrepreneurial opportunity. Training in motivation and skills. Provision of credit facilities. Risk sharing by providing investment subsidy. Help in developing new materials and Market. Constant monitoring and follow-up.

230. Risk taking Among Rural Entrepreneur

231. Environmental Risk Social Risk Economic Risk Technical Risk Types of Risk Types of Risk

232. Development Strategy For Small Entrepreneur

233. Condition Influencing The Entrepreneurial Trends Economic Conditions (infrastructural & institutional) Insufficient (-) Entrepreneurial Trends Insufficient (-) Sufficient (+) Sufficient (+) Little ( - - ) Low (+ - ) High (+ +) Low (+ -) Social Conditions Favorable (+) Favorable (+) Unfavorable (-) Unfavorable (-) + =

234. Entrepreneurial Development In Backward Area

235.  

236. Training and Entrepreneurship Development Programme in India Importance of training Methods of training EDP- Need and importance Phases of EDP Selection of entrepreneurs for EDP Training programme - Course contents Pre requisites of EDP Organisations providing EDP

237. Importance of Training Ensures availability of skilled manpower at all management levels Enhancing abilities, potential among entrepreneurs Increase efficiency Maintain and enhance

product quality Minimise wastages in production process Minimise accidents on the job Reduce fatigue and increase speed of work Standardisation in industry and internal processes

238. Methods of Training Individual instruction Group instruction Lecture method Demonstration method Written instruction method Conference Meetings

239. EDP Designed with an aim of encouraging self employment Imparts training and motivates potential and existing entrepreneurs to start new business or diversify and expand the existing one Helps employment and wealth creation among educated unemployed youth Well equipped to face risks and challenges as an entrepreneur Government needs considerable human and material resource, importance to detailed planning & implementation

240. Phases of EDP Select area from existing government policy guidelines/socio-economic reports Techno-economic survey of the selected area; feasibility study Identify potential and existing entrepreneurs interested in starting new business/expansion/diversification Training Follow up and consultancy services

241. Selection of entrepreneurs for EDP The programme is well publicised and promoted to attract maximum applications for screening Selection of top 25 to 30 applicants only Applications screened for: Demographics and socio cultural data – age, education, work exp, financial resources, type of business etc Motivation factors – pull factors, source of encouragement, credibility, endurance, concreteness of plans Psychological test results- traits like risk taking, need for achievement

242. Training – Course contents Introduction to entrepreneurship Motivation training Essentials of management Fundamentals of project feasibility study Organising the business Plant visit

243. Pre requisites of EDP Selection of entrepreneurs Inputs for EDP Support system Follow up

244. Organisations providing EDP

245. National Institute for entrepreneurship and Small Business Development (NIESBUD) Established by Government of India in 1983 An apex body for coordination and supervision on activities of various institutes engaged in entrepreneurial development Helps evolution of EDP, model syllabi, effective training strategies, methodology, manuals and tools Activities undertaken: Organise and conduct training programmes Coordinate training activities of various agencies/institutes Provide affiliation to such institutes Hold examinations and confer certificates to trainers and trainees

246. Small Industries Service Institutes (SISI) Three months part time evening courses in management 4-6 weeks part time courses in intensive training in functional areas (marketing, finance) Special courses in quality control, HR, production planning, product development etc Mobile workshops imparting training on correct usage of tools and equipment Helps with preparation of plant layouts Helps individual firms on specific problems faced

247. Small Industries Development Organisation (SIDO) Runs EDP in collaboration with financial institutes, directorate of industries Gives on the job training on shop floor (carpentry, electrical devices) Sends its officials/trainers to organisations to update their knowledge

248. National Small Industries Corporation (NSIC) Provides apprenticeship for 2 years Training supervisory staff of SSI up to 2 years Training to engineers up to 2 years Training workmen for

12 months Training to set up own venture Advice on machinery and components Production of technologically advanced machines

249. Entrepreneurship Development Institute of India (EDII) Develops programmes for entrepreneurial training and development Develops innovative training techniques for trainers Focused attention on women entrepreneurs with first such EDP in 1988 EDP for rural entrepreneurship development in U.P and Orissa Famous for organising camps on entrepreneurship Condusted EDP in Sri Lanka, Nepal, Ghana, Kenya etc

250. National Alliance of Young Entrepreneurs (NAYE) Contribution in encouraging women entrepreneurship Set up women’s wing in 1975 This wing assists women in: Getting better access to resources, infrastructure, markets Identify investment opportunities Attending to problems of individual industries Sponsor participation in trade fairs, exhibitions, conferences Organise seminars, training programmes, workshops

PROFESSIONALISMVS.FAMILY ENTREPRENEURS : PROFESSIONALISMVS.FAMILY ENTREPRENEURS PRESENTED BY: AJAY KUMAR GUPTA

PROFESSIONALISM : PROFESSIONALISM Professionalism is actually the process by which given occupation become professions in the sense of attaining professional status. OR The expertness characteristic of a professional person.

ELEMENTS OF PROFESSIONALISM : ELEMENTS OF PROFESSIONALISM ALTRUISTIC ACCOUNTABILITY EXELLENCE HONESTY/INTEGRITY DUTIFUL RESPECT TO OTHER

Slide 4: 1.ALTRUISTIC: Showing unselfish concern for the welfare of others

2. ACCOUNTABILITY Responsibility and Reliability

Slide 5: 3.EXELLENCE Knowledgeable Skilful Competency to retrieve and handle information Appropriate decision making skills Competency in skills of communication

Slide 6: 4. Honesty/ Integrity The quality of being honest Moral soundness Undivided or Unbroken 5. Dutiful Appreciation of the role Aptitude for personal development 6. Respect to others

Professionalism in Business : Professionalism in Business Health and Hygiene Personal Image-First Impressions REALLY Count! Appearance and Dress Etiquette and Manners Always use the magic words: PLEASE and THANK YOU Be on time Keep your promises Respect people and be courteous Follow up with thank-you notes Return all phone calls Call ahead to confirm appointments

FAMILY ENTREPRENEUR : FAMILY ENTREPRENEUR A family entrepreneurship is defined in terms of: Ownership control by members of a family Strategic influence of a family in the management of the firm Concern for family relationship The dream of continuity across generation

PROFESSIOANLISM VS. FAMILY ENTREPRENEURS : PROFESSIOANLISM VS. FAMILY ENTREPRENEURS 1. DEGREE OF OPEN MINDEDNESS: Professional are open minded, receptive to new ideas, ready to experiment. While family entrepreneurs generally lack this.

Slide 10: 2. NEW PRACTICES: Include Quality certification, Participative Mgmt., Change in working style, financing pattern. Professional are always leaders in adopting them, experimenting with them. While there is lack of this attitude in family entrepreneurs

Slide 11: 3. IMPARTIAL HRM: Professionals do not show partiality towards any particular gender. But family business houses employ their relative or friends or people belonging to same social caste in responsible position.

Slide 12: 4.ORGANIZATION ORIENTED FINANCIAL MANAGEMENT: Professionals tend to make financial decision in the way which is best for the organization. But family entrepreneurial firms give first priority to their familiar concern & interests.

Slide 13: 5.DECISION MAKING STYLE: The decision making process in professional run organization tends to be qualitative better & vision to be broader. It is mostly participative. While in family run businesses is more autocratic in nature. Here it is mostly owner entrepreneur himself or herself who makes the decision sometimes with the help of his family members or friends.

ROLE OF WOMEN ENTREPRENEURS: ROLE OF WOMEN ENTREPRENEURS PRESENTATION BY S.Alexander M.Arun kumar J.Nikhil kumar

Introduction: Introduction Women entrepreneurs may be defined as a woman or a group of women who initiate, organize and run a business enterprise. In terms of Schunpeterian concept of innovative entrepreneurs, women who innovate, initiate or adopt a business activity are called business entrepreneur.

Areas of Women Entrepreneurs: Areas of Women Entrepreneurs The areas chosen by women are Retail Trade, Restaurants, Hotels, Education, Cultural, Cleaning Insurance and Manufacturing .

Women entrepreneurs in India: Women entrepreneurs in India The Government of India has defined women entrepreneurs based on women participation in equity and employment of a business enterprise . Accordingly, a woman entrepreneur is defined as an enterprise owned and controlled by a woman having a minimum financial interest of 51% of the capital and giving at least 51% of the employment generated in the enterprise to a woman.

Reasons for their marks in business: Reasons for their marks in business They want to improve their mettle in innovation and competitive jobs. They want the change to control the balance between their families and responsibility and their business levels. They want new challenges and opportunities for self fulfillment.

Role of women as an Entrepreneur's: Role of women as an Entrepreneur's Imaginative Attribute to work hard Persistence Ability and desire to take risk Profit earning capacity

Imaginative: Imaginative It refers to the imaginative approach or original ideas with competitive market. Well-planned approach is needed to examine the existing situation and to identify the entrepreneurial opportunities. It further implies that women entrepreneur's have association with knowledgeable people and contracting the right organization offering support and services

Attribute to work hard: Attribute to work hard Enterprising women have further ability to work hard. The imaginative ideas have to come to a fair play. Hard work is needed to build up an enterprise..

Persistence: Persistence Women entrepreneurs must have an intention to fulfill their dreams. They have to make a dream transferred into an idea enterprise; Studies show that successful women work hard.

Ability and desire to take risk: Ability and desire to take risk T he desire refers to the willingness to take risk and ability to the proficiency in planning making forecast estimates and calculations.

Profit earning capacity: Profit earning capacity she should have a capacity to get maximum return out of invested capital.

Functions of Women Entrepreneurship: Functions of W omen Entrepreneurship Exploration of the prospects of starting a new business enterprise. Undertaking a risk and handling of economic uncertainties involved in business. Introduction of innovations, imitations of innovations. Co ordination, administration and control. Supervision and leadership.

Successful Women Entrepreneurs: Successful Women Entrepreneurs Indra Nooyi Kiran Mazumdar-Shaw Priya Paul Naina Lal Kidwai

Indra Nooyi: Indra Nooyi Born 28 October 1955 (age 56) Chennai, Tamil Nadu, India Citizenship United States Alma mater Madras Christian College IIM Calcutta Yale School of Management Occupation Chairman & CEO of PepsiCo Predecessor Steven Reinemund Religion Hindu Awards Padma Bhushan 2007

Kiran Mazumdar-Shaw: Kiran Mazumdar -Shaw Born March 23, 1953 (age 58) Bangalore, India Residence Bangalore, India Education Mount Carmel College, Bangalore University. Occupation Chairperson of Biocon Net worth US$900 million (2010 )

Priya Paul: Priya Paul Priya Paul Born 1967 Nationality Indian Occupation Chairperson [The Park Hotels]]

Naina Lal Kidwai: Naina Lal Kidwai Naina Lal Kidwai is an Indian business executive. She is currently the Group General Manager and Country Head of HSBC India. S he is a chartered accountant by profession, later earned a Bachelors degree in Economics from University of Delhi and an MBA from Harvard Business School in 1982 . Kidwai was the first Indian woman to graduate from Harvard Business School. During 1994-2002, she worked at Morgan Stanley as Vice Chairman of JM Morgan Stanley and Head of the Investment Bank in India.

Conclusion: Conclusion women entrepreneur are those women who think of a business enterprise,  initiate it organize and combine the factors of production, operate the enterprise,  undertake risk  and handle economic uncertainties involved in running a business enterprise.

BIFR struggling to revive sick companiesOur Mumbai Bureau

The role of the Board for Industrial and Financial Reconstruction (BIFR) needs a re-look in the face of a steep rise in the number of industries turning sick. BIFR was constituted to facilitate the revival of industries deemed sick.

When an industry turns sick, BIFR takes on the role of a quasi-judicial body and dispenses functions as an operating agency (generally the lead financial institution having the largest loan exposure among the creditors) to devise a revival strategy proposal.

The company or bank, as the case may be, if not satisfied with BIFR ruling can approach the Appellate Authority for Industrial Financial and Reconstruction (AAIFR) for redressal. The High Court, Delhi, may be approached thereafter if the AAIFR verdict is found to be unsatisfactory. There is no time limit on the revival procedure.

Progress in the right disposal of sick company cases registered with BIFR has been slow on account of the conflicting interests between the companies and the creditors (banks and financial institutions, government bodies/agencies) and certain lacunae in the SICA Act. The rehabilitation schemes met with 40-45 per cent failure, as a result of which many of the cases had to be reopened.

When a company (an industrial company registered for not less than five years) incurs accumulated loses equal to or in excess of its entire net worth at the end of a financial year, by definition, such a company is considered sick.

The rate of registration/sickness increased substantially during 1997 due to (a) the recessionary trends prevalent in industry (b) poor financial market conditions and (c) the tough stance taken by banks/financial institutions (FIs) towards defaulters/potential sick companies under their non-performing assets (NPA) accounts for rescheduling of repayments, etc.

The problem appears even more acute if one takes note of potentially sick BIFR companies, as also the NPAs of FIs and banks. In fact, the NPAs of banks and others have risen to a whopping Rs 40,000 crore.

The outstanding bank credit against sick companies has reached an abnormal proportion of over Rs 13,739 crore, which is 13.3 per cent of the total bank credit given to industry. Over 12 lakh workers have been affected by companies turning sick.

The problem is aggravated by the reduction in the strength of BIFR. As against the permitted number of 14 members on the board, only three are there on the board since April 1997. According to Chetan Dalal, member, Finance Banking and Insurance COM.IMC, "With the retirement of two other members on September 30, 1997, only one member will be left to manage BIFR. In fact, the short tenure (maximum of three years) on board makes the members ineffective with regard to the revival procedures as these procedures take a long time to realise their objectives."

Definition of 'Syndicated Loan'

A loan offered by a group of lenders (called a syndicate) who work together

to provide funds for a single borrower. The borrower could be a corporation,

a large project, or a sovereignty (such as a government). The loan may

involve fixed amounts, a credit line, or a combination of the two. Interest

rates can be fixed for the term of the loan or floating based on a benchmark

rate such as the London Interbank Offered Rate (LIBOR).

Typically there is a lead bank or underwriter of the loan, known as the

"arranger", "agent", or "lead lender". This lender may be putting up a

proportionally bigger share of the loan, or perform duties like dispersing

cash flows amongst the other syndicate members and administrative tasks. 

Also known as a "syndicated bank facility".

Lateral Thinking: Solving problems in unconventional ways--a way of thinking which seeks solutions through unorthodox methods that would normally be ignored by logical thinking. de Bono wrote this classic book in the 1970's. de Bono Thinking Systems, Inc. launched the course in 1994. Lynda Curtin was certified by de Bono in 1994 during the launch of this course.

De Bono Thinking Systems Methods are utilized by people of all ages and professions, including Nobel Prize laureates and corporate executives at some of the world's largest organizations.

1. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA Presented By Mr. Naveen S.D 9019471564 The Oxford College of Business Management, Bangalore

2. Introduction The Government of India set up the SIDBI under a special Act of the Parliament in October 1989. SIDBI commenced its operations from April 2, 1990 with its head office in Lucknow. SIDBI has been setup as a wholly owned subsidiary of IDBI. Its authorised capital is Rs.250 crore with an enabling provision to increase it to Rs.1000 crore. It is the apex institution which oversees, co-ordinates & further strengthens various arrangements for providing financial and non-financial assistance to small-scale, tiny, and cottage industries.

3. Mission & Vision Mission: “ To empower the Micro, Small and Medium Enterprises (MSME) sector with a view to contributing to the process of economic growth, employment generation and balanced regional development” Vision: “ To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer - friendly institution and for enhancement of share - holder wealth and highest corporate values through modern technology platform”

4. Objectives Four basic objectives are set out in the SIDBI Charter. They are: Financing Promotion Development Co-ordination for orderly growth of industry in the small scale sector. The Charter has provided SIDBI considerable flexibility in adopting appropriate operational strategies to meet these objectives.

5. Products & Services Direct finance. Bills finance Refinance International finance Promotional & Development activities. Fixed deposit scheme Technology Upgradation & Modernisation Fund Scheme {TDMF} Venture Capital Fund Scheme Seed Money Schemes National Equity Fund Scheme

6. Direct Finance Since its beginning, SIDBI had been providing refinance to State Level Finance Corporations / State Industrial Development Corporations / Banks etc., against their loans granted to small scale units. SIDBI’s direct finance schemes are: Scheme for expansion / diversification of small scale units. Scheme for specialised marketing agencies. Scheme for ancilaring / subcontract units. Scheme for existing Export Oriented Units(EOUs) to enable them to acquire ISO 9000 series certification.

7. Bills Finance Schemes Bills Finance Scheme involves provision of medium and short-term finance for the benefit of the small-scale sector. Bills Finance seeks to provide finance, to manufacturers of indigenous machinery, capital equipment, components sub-assemblies etc, based on compliance to the various eligibility criteria, norms etc as applicable to the respective schemes. To be eligible under the various bills schemes, one of the parties to the transactions

to the scheme has to be an industrial unit in the small-scale sector within the meaning of Section 2(h) of the SIDBI Act, 1989.

8. Refinance Schemes Refinance scheme is introduced for catering to the need of funds of Primary Lending Institutes {PLI} for financing small scale sector. Under the scheme, SIDBI grants refinance against term loans granted by the eligible PLIs to industrial concerns for setting up industrial projects in the small scale sector as also for their expansion / modernisation / diversification. PLIs are SIDC, SFC. Banks like commercial banks, Co-operative Banks, Regional Rural Banks Schemes of re-finance assistence: Scheme for SC-ST & physically handicraft persons Composite loan scheme Equipment refinance schemes. Schemes for small road transport operators. Special assistence to ex-servicemen.               

9. International Finance Schemes The main objective of the various International Finance schemes is to enable small-scale industries to raise finance at internationally competitive rates to fulfill their export commitments. The financial assistance is being offered in US Dollars and Euro currencies. Assistance in Rupees is also provided to the needy borrowers. The international finance is available from pre-shipment & post shipment credit. Need based limit, depending on the normal trade terms and credit period given to overseas buyers by exporters not exceeding 180 days.

10. Fixed Deposit Scheme The Interest Rate Structure for SIDBI Fixed Deposit Scheme of SIDBI are as under: 7.50 14 months - 36 months 7.00 14 months - 36 months 6.50 12 months - 13 months Interest (% p.a.) Revised Annual Interest Rate %p.a. * w.e.f August 10, 2009 Time period 8.0 7.5 7.0 For Senior Citizens

11. Promotional and Development Activities As an apex financial institution for promotion, financing and development of industry in the small scale sector, SIDBI meets the varied developmental needs of the Indian SSI sector by its wide-ranging Promotional and Developmental (P&D) activities. The activities are as follows: Enterpreneurship Development Programmes. Management Development Programmes. Technology Upgradation Programmes.

12. Technology Upgradation & Modernisation Fund Scheme {TDMF} This fund was setup in the year 1996 by the SIDBI with an initial capital of 200 crores. It was setup for the purpose of encouraging the existing small scale industrial units to modernise production facilities and adopt improved and updated technology for strengthning export capabalities. For availing benefits under this scheme the unit have to prepare an estimate for modernisation & submit it to SIDBI. The sanction of funds is made depending upon the estimate submited.

13. Venture Capital Fund Scheme SIDBI is participating in the Venture capital fund set by public sector institutions as well as private companies to the extent of Rs,50,00,000 of total capital of the fund required. The fund should be dedicated to financing small industry preferabally the most risky one.

14. National Equity Fund Scheme In order to provide equity type assistance, SIDBI is operation a National Equity Fund Scheme. The equity capital loan to the extent of 2.5lakh is sanctioned to each project provided the profect qualities under this scheme.

15. Seed Money Schemes One of the constraints faced by Entrepreneurs is the lack of own resources to promote the minimum promoter contribution. Hence, SIDBI introduced seed money scheme for the benefit of entrepreneurs. Seed money is available through DIC { Direct Industry Centre } to those entrepreneur who are technically qualified but lack of own capital.

INSTITUTIONAL SUPPORT FOR NEW VENTURES

SUPPORTING ORGANISATIONS

ALL INDIA INSTITUTIONS

1 Small Scale Industries Board: SSI Board is the apex non-statutory advisory body constituted by the Government of India to render advice on all issues pertaining to the SSI sector. It provides a forum to its members for interaction to facilitate co-operation and inter institutional linkages and to render advice to the Government on various policy matters, for the development of the sector. The Board was first constituted in 1954. Its term is for two years.

2 Ministry of Small Scale Industries: The process of liberalization and market reforms has created wide-ranging opportunities of the development of small scale industries. At the same time, 280 changing world scenario has thrown up new challenges to the very existence of this sector. The need of the hour is to suitably strengthen the sector so that it could adapt itself to the changed environment and face the challenges boldly and effectively. The implementation of policies and various programmers/schemes for providing infrastructure and support services to small enterprises is undertaken through its attached office, namely the Small Industries Development Organization (SIDO), statutory bodies/other organizations like Khadi and Village Industries Commission (KVIC) & Coir Board, National Small Industries Corporation (NSIC) and three training institutes- National Institute of Small Industry Extension Training (NISIET), Hyderabad, Indian Institute for Entrepreneurship (IIE), National Institute for Entrepreneurship and Small Business Development (NIESBUD)

3 Small Industry Development Organisation (SIDO): • Advising the Govt. in policy matters concerning small scale sector. • Providing techno-economic and managerial consultancy, common facilities and extension

services. • Providing facilities for technology up-gradation, modernization quality improvement &

infrastructure. • Human resources development through training and skill up-gradation. • Providing economic information services. • Maintaining close liaison and vital linkage with the Central Ministries, Planning

Commission, Financial Institutions, State Govts. & similar other developmental organizations/agencies related to the promotion and development of SSI Sector.

4 National Small Industries Corporation (NSIC) Limited: Some of the main services provided by NSIC are described below: 

• Machinery and Equipment (Hire-Purchase Scheme)• Machinery and Equipment (Lease Scheme)• Financial Assistance Scheme• Assistance for Procurement of Raw Material• Marketing Assistance• Government Store Purchase Programme • Technology Transfer Centre

5 The Khadi and Village Industries Commission (KVIC) The Khadi and Village Industries Commission (KVIC) is a statutory body created by an Act of Parliament in April 1957. The KVIC is

supposed to do the planning, promotion, organization and implementation of programmes for the development of khadi and other village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary. The broad objectives that the KVIC has set before it are:• The social objective of providing employment• The economic objective of producing saleable articles,The wider objective of creating self-reliance amongst the poor and building up of a strong rural community spirit.

6 Coir Board: Coir Board is a statutory body established by the Government of India under a legislation enacted by the Parliament namely Coir Industry Act 1953 for the promotion and development of Coir Industry in India as a whole.

7Industrial Finance Corporation of India ltd (IFCI): Some sectors that have directly benefited from IFCI’s disbursals include:  

• Consumer goods industry (textiles, paper, sugar); • Service industries (hotels, hospitals); • Basic industries (iron & steel, fertilizers, basic chemicals, cement); • Capital & intermediate goods industries (electronics, synthetic fibers, synthetic plastics,

miscellaneous chemicals); and • Infrastructure (power generation, telecom services).

8 Training Institutes: National Institute of Small Industries Extension Training (NISIET)

The NISIET since its inception by the Government of India has taken gigantic strides to become the premier institution for the promotion, development and modernization of the SME sector. An autonomous arm of the Ministry of Small Scale Industries, the Institute strives to achieve its avowed objectives through a gamut of operations ranging from training, consultancy, research and education, to extension and information services.

National Institute for Entrepreneurship & Small Business Development (NIESBUD): NIESBUD’S role is that of a catalyst as it helps in developing the effectiveness of all these organizations. Programmes initiated/sponsored by the NIESBUD are constantly evaluated and revised to suit the changing needs in the area of entrepreneurship and small business development. The institute is engaged in creating a climate conducive for entrepreneurship and in developing favourable attitude amongst the general public in support of those who opt for entrepreneurial career. 

Entrepreneurship Development Institute of India (EDII):EDII has been spearheading an entrepreneurship movement throughout the nation in the belief that entrepreneurs need not necessarily be born; they can be developed through well-conceived and well-directed activities.

Indian Institute of Entrepreneurship (IIE):The policy direction and guidance is provided to the Institute by its Board of Management whose chairman is the Secretary to the Government of India,

Ministry of Small Scale Industries. Chairman, NEC, heads the governing council of the institute and the Secretary, SSI and ARI, and Govt. of India head the Executive Committee.

STATE LEVEL INSTITUTIONS1 State Industrial Development Corporations (SIDCs): The State Industrial Development Corporations were set up under the Companies Act, 1956, as wholly owned state government undertakings for promotion and development of medium and large industries. In addition to provision of financial assistance, they are also involved in developing industrial infrastructure like industrial estates, industrial parks and setting up industrial projects either on their own or in the joint sector in collaboration with private entrepreneurs or as wholly owned subsidiaries.

2 State Directorate of Industries (SDIs) Under the constitution of India promotion and development of small scale industries is a State subject. Therefore, the primary responsibility for implementation of policies and programmes of assistance rests with the Directorate of Industries in each State. It acts under the overall guidance of SIDO and concerned Central institutions. It performs both regulatory and developmental functions. It functions through a network of District Industries offices, industries offices and extension offices at district sub-division and block level respectively.The main functions of Directorate of Industries are as follows:a) Registration of small scale unitsb) Providing financial assistancec) Distributing scare and indigenous raw materials to industrial unitsd) Granting essentiality certificates for import of raw materiale) Establishing industrial estates and industrial co-operativesf) Developing industrial infrastructureg) Undertaking industrial surveys and collecting informationh) Arranging concessions and incentives for industries.i) Overall administration of village and small scale industries.j) Maintaining liaison with other agencies for industrial development.

3 District Industries Centres (DICs) Initially institutional infrastructure for small industry development existed at the state level and there was hardly any promotional machinery at the district level except a small office of the district industries. In late 70s, it was felt that if a district has to be a unit of planning, there should be strong promotional machinery with delegated powers at the district level. It was therefore, felt that an agency should be set up a district level, which will have necessary expertise to guide an entrepreneur and meet all his requirements

FUND-BASED INSTITUTIONS1 Small Industries Development Bank of India (SIDBI): Small Industries Development Bank of India (SIDBI) was established in April 1990 under an Act of Indian Parliament as the principal financial institution for:

• Promotion • Financing • Development of industry in the small-scale sector • Co-ordinating the functions of other institutions engaged in similar activities

2 Commercial Banks:a) Industrial Credit and Investment Corporation of India Ltd. (ICICI): The ICICI performs the following functions:

(i) It provides assistance by way of rupee and foreign currency loans, underwriting and direct subscriptions to shares/debentures and guarantees,

(ii) It offers variety of financial services such as deferred credit, leasing credit, installment sale, asset credit and venture capital.

(iii) It guarantees loans from other private investment sources.

b) Industrial Development Bank of India (IDBI) The IDBI provides assistance to the small-scale industries through its scheme of refinance and, to a limited extent, through its bills rediscounting scheme. As it is not feasible for the IDBI to reach a large number of small-scale industries scattered all over the country, the flow of its assistance to this vast number has, therefore, been indirect in the form of refinancing of loans granted by the banks and the State Financial Corporations (SFCs).

3 State Financial Corporations (SFCs) SFCs provide term loan to small and medium scale industries for creation of assets, viz., land, building and machinery. They also provide working capital term-loan to the industrial units on competitive terms. Various non-fund based services like merchant banking, under-writing of public issues, project counseling, bill discounting, leasing and hire purchase are also been undertaken by them. They are operating a number of financial assistance schemes for the benefit of the entrepreneurs such as assistance for marketing activities, equipment finance, special schemes for assistance to ex-servicemen, single window scheme, etc. SFCs provide maximum loan upto Rs. 240 lakhs. The interest on loan ranges between 13.75% to 16.5% depending upon the size of the loan and its term.

POLICY SUPPORT TO SMALL SCALE INDUSTRIESINTRODUCTION After attaining independence in 1947 India adopted mixed economic planning as a method to achieve economic development. Along with the Large Scale sector the thrust was on Small Scale sector because of it decentralized, its small size, use mainly indigenous technology, employment intensity and its suitability for rural area with limited techno-economic structure. Industrial policies over the year have focused to promote SSIs through various incentives related to financial, fiscal and infrastructure measure; along with a heavy industrial base.

The various provisions under Industrial Policy Resolutions formulated by the government in assisting the small scale industries (SSI) The various fiscal incentives for SSIs INDUSTRIAL POLICY RESOLUTION AND SSIs INDUSTRIAL POLICY RESOLUTION 1948 1 SSIs are particularly suited for the utilization of local resources and creation of employment opportunities . 2 The primary responsibility for developing small industries by creating infrastructure has been provided to state government . 3 Central government frame the broad policies and coordinates the efforts of State Government for development of SSIs.

INDUSTRIAL POLICY RESOLUTION 1956 1 It stated that besides continuing the policy support to cottage, village and small industries by differential taxation or direct-subsidies, the aim of state policy would be that the development of this sector is integrated with that of large scale industry.2 The focus was to improve the competitive strength of SSIs.

INDUSTRIAL POLICY RESOLUTION 1977 The main thrust of policy was effective promotion of cottage ,village and small industries widely dispersed in rural area and small towns. This thinking specified the following things: 504 items were reserved for exclusive production in the small scale industries . The concept of District Industrial Centers (DICs) was introduced to that in each district a single agency could meet all the requirement of SSIs under one roof. Technological up gradation was emphasized in traditional sector . Special marketing arrangement through the provision of services, such as, production standardization, quality control, market survey, were laid down.

INDUSTRIAL POLICY RESOLUTION 1990 Main feature of this resolution are as follows:1. It raised the investment ceiling in plant and machinery for SSIs.2. It created central investment subsidy for this sector in rural and backward area. Also, assistance was granted to woman entrepreneurs for widening the entrepreneurial base. 3. Reservation of items to be produced by SSIs was increased to 836. 4. Small Industries Development Bank of India was established to ensure adequate flow of credit to SSIs. 5. Stress was reiterated to upgrade technology to improve competitiveness.6. Special emphasis was laid on training of woman and youth under Entrepreneurial Development Programme.7. Activities of Khadi and Village Industries Commission and Khadi and Village Industrial Board were to expand.

INDUSTRIAL POLICY RESOLUTION 1991 The basic thrust of this resolution was to simplify regulations and procedures by delicensing, deregulation . Its salient feature are: SSIs were exempted from licensing for all articles of manufacture. The investment limit for tiny enterprises was raised to Rs.5 lacs irrespective of location. Equity participation by other industrial undertaking was permitted up to a limit of 24% of shareholding in SSIs. Factoring services were to launch to solve the problem of delayed payment to SSIs. Priority was accorded to small and tiny units in allocation of indigenous and raw materials. Market promotion of products was emphasized through co-operatives, public institutions and other marketing agencies and corporations.

COMPREHENSIVE POLICY PACKAGE FOR SSIS AND TINY SECTOR 2000 The exemption for excise duty limit raised from 50 lakhs to Rs One crore to improve the competitiveness. The third census of small scale industries by the ministry of SSI was conducted. which also covered sickness and its causes in SSI’s. The limit of investment was increased in industry related service and business enterprises from Rs 5 lakhs to Rs 10 lakhs. The scheme of granting Rs 75000 to each small scale enterprise for obtaining ISO 9000 certificate was continued till the end 10 th plan. SSI associations were motivated to develop and operate testing laboratories. One time capital grant of 50% was given on reimbursement basis to each association. The limit of composite loan was

increased from Rs10 lakhs to Rs 25 lakh. The coverage of ongoing Integrated Infrastructure Development (IID) was enhanced to cover all area in the country with 50% reservation for rural area and 50%earmarking of plots for tiny sector. The family income eligibility limit of Rs 24000 was enhanced to Rs 40000 per annum under the Prime Minister Rozgar Yozna (PMRY).

INDUSTRIAL POLICY PACKAGE FOR SSI 2001-02 This policy emphasizes the following: The investment limit was enhanced from Rs 1crore for to Rs 5 crore for units in hosiery and hand tool sub sectors. The corpus fund set up under the Credit Guarantee Fund Scheme was increased from 125 crore to 200 crore . Credit Guarantee cover was provided against an aggregate credit of Rs 23 crore till December 2001. 14 items were de-reserved in June 2001 related to leather goods, shoes and toys. Market Development Assistant Scheme was launched exclusively for SSI sector. Four UNIDO assisted project were commissioned during the year under the Cluster Development Programme .

INDUSTRIAL POLICY ON SSIS 2004-05 Policy initiatives for this year are as follows: The national commission on Enterprises in the Un-organized/Informal Sector was set up in September 2004.It suggested measures considered necessary for improvement in the productivity of these enterprises, generation of large scale employment opportunities, linkage of the sector to institutional framework in area like credit ,raw material supply, infrastructure, technology up gradation ,marketing facilities and skill development by training . 85 items were de-reserved in October 2004. The investment limit in plant and machinery was raised from Rs One crore to Rs 5 crore in October 2004,in respect of seven item of sports goods to help to upgrade the technology and enhance competitiveness. The Small and Medium Enterprise (SME) fund of Rs 10000 crores was stared by SIDBI since April 2004,with 80% of the lending for SSI units. The interest rate was 2%below the prevailing Prime Lending Rate (PLR) of the SIDBI. The reserve Bank of India raised the composite loan limit from Rs 50 lakhs to Rs One crore. Promotional Package for small enterprises was initiated. POLICY PACKAGE FOR SME 2005-06 THIS POLICY PACKAGE CONTAINS THE FOLLOWING POINTS 180 items were dereservation. Small and Medium Enterprises were recognized in the services sector , and were treated on par with SSIs in the manufacturing sector. The corpus of the Credit Guarantee Fund was raised from Rs 1132 crore in March 2006 to Rs 2500 crore in five years. Credit Guarantee Trust for Small Industries (CGTSI) was advised to reduce the one time guarantee fee from 2.5% to 1.5% for all loans. Insurance cover was extended to proximately 30,000 borrowers, identified as chief promoters, under the CGTSI. The sum assured would be Rs 200000 per beneficiary and the premium will be paid by CGTSI. The emphasis was laid on Cluster Development model not only to promote manufacturing but also to renew industrial towns build new industrial township . The model is now being implemented, in nine sector including khadi and village industries, handlooms, textiles, agricultural products and medicinal plants.

FISCAL INCENTIVES AND FACILITIES TO SSIsFiscal incentives are provided through tax concessions granted in the form of exempted of direct or indirect taxes leviable on production or profits, besides special tax concessions. These incentives have been provided to promote the SSIs and discussed in following:

1.TAX HOLIDAY With effect from financial year 2005-06, deduction in respect of profit and gains for small scale industrial undertaking is available under Section 80IB. Small scale industrial undertaking can claim deduction at the following rates: If SSI unit is owned by a company , the deduction available is 30% for first 10 year , If SSI unit is owned by a co-cooperative society, the

deduction to be availed is 25% for first 10 years , and If any other person owns SSI units ,the deduction to be claimed is 25% for first 10 years .

2.TAX EXEMPTION CONDITIONS: No small scale or ancillary undertaking shall be subsidiary of, or owned or controlled by other industries undertaking . The SSI unit should commence business between 1 st April1991 and 31 st March 2002. SSI unit can manufacture any nature/type of goods /article to avail deduction. They should employ at least 10 workers in manufacturing process carried out with aid of power or at least 20 worker in manufacturing process carried out without the aid of power. This tax exemption from total income is allowed from the assessment year in which the unit being to manufacture or produce goods or articles. 3.EXCISE CONCESSIONS: Government of India has provided a major relief by grating full exemption from the payment of central excise duty on a specified output and thereafter slab-wise concessions. The following concessions are available to them in this regard: 1) SSI units producing goods up to Rs.100 lakhs are exempted from payment of excise duties. 2) SSI units having turnover less than Rs.60 lakhs per annum need not have a separate storeroom for storing the finished products. 3)SSIs are also not required to maintain any statutory records such as daily stock account of production and clearance , raw material account ,personal ledger account etc. their own record are adequate for excise purpose. 4) There is no distinction between registered and unregistered units for SSI concessions for SSIs has been based on annual turnover rather than SSI registration . Duty liability is to be discharged by 15 th of following month.5)The SSI exemption is available for home consumption ,as well as in respect of goods exported to Nepal & Bhutan. 6) Normally ,excise officers are not expected to visit SSI units paying less than Rs.11lakhs duty annually . 7)With effect from 1-4-1994, Gate –Pass System was replaced by manufacturer invoice to cover clearance of goods as the duty-paying document.

4.MEASURES FOR PROMOTION AND DEVELOPMENT OF SSIs Central and state Government have formulated several schemes to make the SSIs vital and competitive. Reservation policy Government’s purchased preference policy for SSI products. Government’s price preference policy for marketing SSI products. Technical assistance Raw material assistance Financial assistance New initiatives

5.RESERVATION POLICY Out of 836 items reserved in 1989,39 items were dereserved in four phases viz., 15 items in 1997’ 9 items on 1999 1 item on 2001 and, 14 item on 2001.subsequently, 51 item were dereserved in 2002, 75 item in 2003 and 85 items in 2004, 108 in March 2005 and 180 in May 2006. Now 298 items stand reserved for this sector.

6.GOVERNMENT’S PURCHASE PREFERENCE POLICY FOR SSI PRODUCTS Under the Store Purchase Policy of the Government 409 items of store were reserved for exclusive purchase from KVIC/Women’s Development Corporation/Small Scale units in 1989. This list reviewed . In February2004, the Committee (set up to consider the question of inclusion of additional items) revised list and 358 items were approved , after deleting items having common nomenclature and addition of some new ones. This list also includes 8 handicraft items reserved for purchase from the Handicraft Sector.

7.GOVERNMENT PRICE PREFERENCE POLICY FOR MARKETING SSI PRODUTS These facilities includes the following : Price preference up to 15%in case of selected items. No

registration fee. A consortium to channelize and identify for the production of SSIs both in India and abroad.

8.The Single Point Registration scheme of NSIC the following benefits are given to SSIs units, which get them registered with the NSIC: Availability of tender sets free cost. Exempted from payment of Earnest Money Deposit. Exempted from payment of Security Deposit up to the monetary limit for which the unit is registered. Price preference up to15% over the lowest quotation of the large scale units. The benefit is available to compensate them on a/c of non-availability of economies of scale ,poor resource base, poor access to raw –material as compared to the large scale sector.

9.TECHNICAL ASSISTANCE Technology audits and benchmarking Technology needs assessment Technology sourcing Application of new acquisition. Technology acquisition . Material testing facilities through accredited laboratories. Product design including Computer Aided Designs. Common facility support in machining Energy and environment services at selected centers. Classroom and practical training for skill up gradation.