ED

UNIT-1
ENTREPRENEUR AND ENTREPRENEURSHIP

Content: Definition ,importance and growth of entrepreneurship,
Characteristic and qualities of entrepreneur, role of entrepreneurship,
Ethics and social responsibility of an entrepreneur, women
entrepreneurship, problems of women entrepreneurs, Corporate
entrepreneurship. Mobility of entrepreneur, Entrepreneurial
motivation
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According to George Bernard Shaw, people fall into three categories: (i) those who
make things happen. (2) Those who watch things happen, and (3) those who are left
to ask what did happen. Generally, entrepreneurs fall under the first category.
EVOLUTION OF THE CONCEPT OF ENTREPRENEUR

The word ‘entrepreneur’ is derived from the French word entreprendre. It means ‘to
undertake’. Thus, entrepreneur is the person who undertakes the risk of new enterprise.
Its evolution is as follows.
 EARLY PERIOD: The earliest definition of the entrepreneur as a go-between is

Marco Polo. He tried to establish trade route to the far East. He used to sign a
contract with a venture capitalist to sell his goods. The capitalist was the risk
bearer. The merchant adventurer took the role of trading. After his successful
selling of goods and completing his trips, the profits were shared by the capitalist
and the merchant.

 MIDDLE AGES: The term entrepreneur was referred to a person who was
managing large projects. He was not taking any risk but was managing the
projects using the resources provided. An example is the cleric who is in charge
of great architectural works such as castles, public buildings, cathedrals etc.

 17th CENTURY: An entrepreneur was a person who entered into a contractual

arrangement with the Govt. to perform a service or to supply some goods. The
profit was taken (or loss was borne) by the entrepreneur.

 18th CENTURY: It was Richard Cantillon, French Economist, who applied the
term entrepreneur to business for the first time. He is regarded by some as the
founder of the term. He defined an entrepreneur as a person who buys factor
services at certain prices with a view to sell them at uncertain prices in the future

Entrepreneurship Development By Dr.Sarita Satpathy Page 1

 19th CENTURY: The entrepreneurs were not distinguished from managers.
They were viewed mostly from the economic perspective. He takes risk,
contributes his own initiative and skills. He plans, organizes and leads his
enterprise.

 20th CENTURY: During the early 20th century Dewing equated the
entrepreneur with business promoter and viewed the promoter as one who
transformed ideas into a profitable business. It was Joseph Schumpeter who
described an entrepreneur as an innovator. According to him an entrepreneur is
an innovator who develops untried technology.

 21th CENTURY: Research Scientists live De Bone pointed out that it is not
always important that an individual comes up with an entirely new idea to be
called an entrepreneur, but if he is adding incremental value to the current
product or service, he can rightly be called an entrepreneur.

MEANING AND DEFINITION OF ENTREPRENEUR

An entrepreneur is ordinarily called a businessman. He is a person who combines
capital and labour for the purpose of production. He organizes and manages a business
unit assuming the risk for profit. He is the artist of the business world.
American Heritage Dictionary, defines entrepreneur as a person who
organises, operates and assumes the risk for a business venture.”
In the words of J.B. Say, “An entrepreneur is one who brings together the factors of
production and combines them into a product”. He made a clear distinction between a
capitalist andan entrepreneur. Capitalist is only a financier. Entrepreneur is the
coordinator and organizer of a business enterprise.
Joseph A Schumpeter defines an entrepreneur as “ one who innovates, raises
money, assembles inputs and sets the organization going with the ability to identify
them and opportunities, which others are not able to fulfill such economic
opportunities”. He further said, “An entrepreneur is an innovator playing the role of a
dynamic businessman adding material growth to economic development”.
CHARACTERISTICS OF AN ENTREPRENEUR
1.An Individual or Group Individuals : Entrepreneur may be an individual or a group of

many individuals. Present age belongs to large business houses and mass level of production.
To commerce an enterprise on a very large basic, the capital or skills of a single individual is
not contributes their share of capital and resources and starts a business enterprise.
2.Need for achievement: It is the prime psychological drive that motivates the entrepreneur.
His desire to excel in his venture and to achieve desired goal. As a high achiever, he
competes with his rivals in the venture field as well as with his own previous performance.

3.Independence or autonomy: Although there are various motivations for venturing out
alone, the most frequent reason for becoming an entrepreneur is the desire for independence
or autonomy—not wanting to work for anyone else. This desire to be one’s own loss ignites a
fire in the heart of an entrepreneur to accept all social, psychological, financial, and
technological risks and to work hard.
4.Risk Bearer : Entrepreneur has the risk bearing capacity. In fact it is the characteristics of
risk bearing that distinguishes an entrepreneur from a manager. An entrepreneur is a manager
but he has the distinction of performing risk bearing function. A manager also does more or
less the same thing but he does not take risks.
4.Innovation : An entrepreneur is basically an innovator by nature. He is always in search of

new ideas and new opportunities. He tries to outshine others by taking initiative in doing new
things i.e., exploring new products, new markets, new raw materials, new methods of
production, etc.
6.Goal Oriented : Entrepreneur is goal oriented. He gets happiness by setting and striving
for goals one by one. Reaching one goal set by entrepreneur will lead to setting up of another
goal.
7.Decision-making : An entrepreneur is a rational decision- maker. He has to take several

decisions to put his business idea into a reality. He recognises an idea i.e., a product, service
or market. He has several alternatives before him. He has to make a choice between them.
This involves decision-making as to choose the best alternative which may suit him and give
maximum profit. For example, he has to decide what is to be produced, how is to be
produced, where to be produced and when to be produced etc.
8.Self-confidence : An entrepreneur has high degree of self- confidence in achieving his

goals. He has the capacity to face extraordinary and unforeseen circumstances as and when
they arise.
9.Initiative : An entrepreneur always takes initiative. He spend a large portion of their time
in thinking over finding out new or novel ways of doing things differently—finding out a
new raw material, a new product, a new method of production, a new style of advertisement,
a new style of packaging, and so forth. While taking such initiative, entrepreneurs duly keep
in mind the needs and requirements of the customers, changing tastes and fashions, changing
life-styles and attitudes, etc.
10.Motivator : An entrepreneur is a motivator. He motivates his workers by giving them

incentives, and creation of team work in order to get their whole-hearted cooperation. He is
able to influence people in the new business unit in the way that they will strive willingly and
enthusiastically toward the achievement of unit’s goals.
11.Human Relations Ability : An entrepreneur possess sound human relations ability to

deal with his employees, customers, suppliers, creditors etc.
12.Economic Planning : Planning is an activity of a highly ubiquitous character. Every

action of an entrepreneur is well planned as it evident from the fact where there are
production plans, sales plans, financial plans, purchase plans, research and development
plans and so on. Without proper business planning the affairs of any business enterprise are
likely to be haphazard.
ESSENTIALS OF A SUCCESSFUL ENTREPRENEUR :
1.Imaginative : Creative thinking and imagination are important entrepreneurial qualities

since innovation comes with these qualities. An imaginative entrepreneur is always in search
for new ideas and is a competent reader of the future events which are uncertain and poses
the maximum risk before the enterprise. Entrepreneur plans to profit and to avoid or mitigate
risks using his imaginative capabilities and execute these plans for realisation of the profit,
sales budget etc. Imaginative entrepreneur can smell the future problems and make plans in
advance to tackle those problems.
2.Sharp Memory : Successful entrepreneurs always have a memory sharper than people in
general. Every event of the recent past should be in his mind when he is making any
important decision as regards the organisation. He has to meet several people, take numerous
decisions and keep a score of plans, reference etc. in his mind, which are necessary for
accurate decision-making and success of the organistion.
3.Self confident : Entrepreneur should be confident that what he is doing or whatever he is

going to do in future is right, but he should keep a place reserved too, i.e, he should be very
confident but his actions should not fall prey to over confidence. Emerson has said, “Self
confidence is the secret of success.”
4.Maturity : A matured entrepreneur performs his duties well and remains honest towards
his responsibilities. He is not irritated upon his criticism and maintains his cool while
communicating or during conversation with anyone. His thoughts and feelings are filled with
maturity.
6. Foresighted : The entrepreneur can evaluate the events even before they are occurred with
the help of his foresight. He can analyse the results of the present action and plans.
Foresighted entrepreneur is future—oriented, which enables the enterprise to avoid problems
which it may face in near future.
7. Dynamic Ideas : The success of the entrepreneur and the enterprise depends on the ideas
or thinking of the entrepreneur also. Conservative approach or traditional ideology proves to
be hurdle in the success of the enterprise. Entrepreneur should be a man of dynamic ideas
and only then he would be interested in using modern management techniques, latest
machineries, plans, and process etc. for his enterprise’s success. Dynamic thinking paves the
way for innovation and modernisation in the organisation.
8.Willingness of challenges : An entrepreneur should have the tendency of accepting new

challenges. He should prefer challenging jobs. “Entrepreneur should have the spirit of
enterprise (venture).” “One who chooses challenges between security and challenge is the
true entrepreneur.”
9. Optimism : The entrepreneur should be an optimistic one. He should see failure as a steps
towers success. If he does not have this quality than he can’t drive his enterprise towards the

road of success. A shock of despair creates vacuum in the mind such as paralysis creates in
the human body. “So an entrepreneur should always avoid frustration and be optimistic about
the future of the enterprise. Only an optimistic entrepreneur can face the risks
anduncertainties of a business enterprise. So, pessimism should be a retired word from his
dictionary of words.
10. Ambition : The ambition to do something and get ahead of others must be there. If it’s
not there in entrepreneur, he can’t succeed. David McClleland has called it an ‘urge to
Achieve’. Andrew carnegi says “A person who does not hold desire for success and
achievement, can’t get to the higher goals in his life.” Whether a sportsperson, an artist, a
politician or a scientist, all have an urge or desire to achieve, and so they become popular for
the field or working area they are in. They can not get ahead of their competitors, if they does
not possess desire to do so. It is the same for entrepreneur also. First he should have the
desire and then he should work to march past others.

11.Foresightedness : A successful entrepreneur must have foresightedness. If the entrepreneur is
unable to foresee, he will not be alert about the possible uncontrollable factors.
12.Time Management : A successful entrepreneur must value time. If the entrepreneur is not able to
manage time, he will also not be able to complete the project before the deadline. While an
entrepreneur seeks to minimize risk to the enterprise, encourages work-life balance, monitors quarter-
on-quarter results, engages in long-range planning, cost optimization, he happens to neglect
adherence to strict timeliness for delivering results which. This puts enormous pressure and is not
surprising if it creates a crisis of identity and confidence. Entrepreneur should be able to manage his
time to address all the issues and will not succeed if he addresses issues solely from any one
perspective.
13.Technical Management Skill : A successful entrepreneur must have managerial skill and
technical knowledge. If he is not able to manage the resources (human, material, capital, equipment)
he will risk losing business. Hence young and emerging entrepreneurs must be able to perform
multiple roles and be able to create his own distinctive form of entrepreneurship
13.Risk-bearing Capacity : In any venture there is some amount of risk. However you may try to
take the necessary precautions and measures and only take calculated risks; yet there exists some
degree of risk due to uncertain nature of environment. Anything untoward may happen and if you are
not able to cope with the ups and downs and not able to do crisis management you will fail.
14.Decision-making : If the entrepreneur is not able to make quick or spontaneous decisions he will
also not be able to work with confidence. Infact due to the competitive nature of small business one
delayed decision made by the entrepreneur may lead to years of rectification.
15.Flexibility
16.Inner drive to succeed
17.Communication skill
18.Locus of control
19.Creative
20. Ability to mobilize resource
21.leadership
22.innovator
23. Stress take

ENTREPRENEURSHIP
Definition
All activities undertaken by an entrepreneur to bring a business unit into existence are
collectively known as entrepreneurship
In the words of Stevenson “Entrepreneurship is the process of creating value by bringing
together a unique package of resources to exploit an opportunity.”
According to A.H. Cole, “Entrepreneurship is the purposeful activities of an individual or a

group of associated individuals undertaken to initiate, maintain or organize a profit oriented
business unit for the production or distribution of economic goods and services”.
According to F.H. Frentz : “Entrepreneurship is organisation and co-ordination of factors of

production into one production unit. Entrepreneur is a higher notion than a manager. He is both
innovator and promoter
NATURE AND CHARACTERISTICS OF ENTREPRENEURSHIP

 It is a function of innovation.
 It is a function of leadership.
 It is an organization building function.
 It is a function of high achievement.
 It involves creation and operation of an enterprise.
 It is concerned with unique combinations of resources that make existing methods or
products obsolete.
 It is concerned with employing, managing, and developing the factors of production.
 It is a process of creating value for customers by exploiting untapped opportunities.
 It is a strong and positive orientation towards growth in sales, income, assets, and
employment.
IMPORTANCE OF ENTREPRENEURSHIP
1.Growth of Entrepreneurship
Entrepreneurship the advent of new venture particularly small ventures in order to materialize
the innovative ideas of the entrepreneurs.Thus, the growth or establishment of small enterprises
ii the specific contribution of entrepreneurship in every economy of the world.The statistics

reveal that in USA economy nearly half a million small enterprise is established every year. Our
country is not an exception in this regard.
2. Creation of job opportunities
Entrepreneurship firms contributed a large share of new jobs. It provides entry-level jobs so
necessary fur training or gaining experience for unskilled workers.The small enterprises are the
only sector that generates a large portion of total employment every year.
3.Innovation
Entrepreneurship is the incubator of the innovation. Innovation creates disequilibria in the

present state of order.It goes beyond discovery and does implementation and commercialization,
of innovations.“Leapfrog” innovation, research, and development are being contributed by
entrepreneurship.Thus, entrepreneurship nurses innovation that provides new ventures, product,
technology, market, quality of good etc. to the economy that increases Gross Domestic Products
and standard of living of the people.
4. Impact on community development
A community is better off if its employment base is diversified among many small
entrepreneurial firms.It promotes abundant retail facilities, a higher level of home ownership,
fewer slums, better, sanitation standards and higher expenditure on education, recreation, and
religious activities.
5.The consequence of business failure
The collapse of large industry almost has irresistible damage to the development of state and to
the state of the economy and to the financial condition of the relevant persons.The incumbents
lost their jobs: suppliers and financial institutions face a crisis of recovery.Customers are
deprived of goods, services, and the government losses taxes. This could not happen in the case
of failure of entrepreneurship.There shall be no measurable effect upon the economy and no
political repercussions too.
6. Political and economic integration of outsiders
Entrepreneurship is the most effective way of integrating those who feel disposed and alienated
into the economy.Minorities, migrants, and women are safely integrated into entrepreneurship
that will help to develop a well-composed plural society.
7. Spawns entrepreneurship
Entrepreneurship is the nursing ground for new inexperienced adventurists.It is the field where a
person can start his/her idea of the venture, which may be ended up in a giant enterprise. All the
large industrial ventures started as a small entrepreneurial enterprise.

8.Enhances standard of living
Standard of living is a concept built on increasing amount of consumption of a variety of goods

and services over a particular period by a household.
So it depends on the availability of diversified products in the market. Entrepreneurship provides

enormous kinds of a product of various natures by their innovation.Besides, it increases the
income of the people who are employed in the entrepreneurial enterprises.That also capable
employed persons to consume more goods and services. In effect, entrepreneurship enhances the
standard of living of the people of a country.
9. Promotes research and development
Entrepreneurship is innovation and hence the innovated ideas of goods and services have to be
tested by experimentation.Therefore, entrepreneurship provides funds for research and
development with universities and research institutions. This promotes the general development,
research, and development in the economy.
10. Balanced regional development
11.Increase National Income
12.Promote countries export trade
13.Dispersal economic power
ENTREPRENEURSHIP GROWTH
Definition
Entrepreneurship growth or development refers to the process of enhancing entrepreneurial skill
and knowledge through structured training and institution building programmed.
Role of Entrepreneurial Growth
1. Aims to enlarge the base of entrepreneurs

2. Focus on improving the culture and climate for enterprise
3. Create suitable industrial environment for rapid economic development
4. Progress and expansion of social wealth
5. Develops and upgrades managerial skill
Factors affecting entrepreneurial growth
1. Economic factor:

 Availability of economic resource
 Economic condition
 Economic policies
 Labor policies
 Trade policies
 Tariff policy
 Incentives
 Subsidies
2.Non economic factor
 Social factor
 Cultural factor
 Personality factor
 Psychological factor
 Sociological factor
 Technological factor
 Educational factor
 Motivation
Barriers to Entrepreneurial Growth
 Capital
 Labor
 Raw Material
 Credit Access and Liquidity Constraint
 Excessive licensing and regulatory requirement
 Excessive ,complex and arbitrary taxation
WOMEN ENTREPRENUERSHIP
According to the general concept, women entrepreneur may be defined as a women or a
group of women who initiate, organize and operate a business enterprise. The Government of
India has defined a women entrepreneurship as “an enterprise owned and controlled by a women
havinga minimum financial interest of 51% of the capital and giving at least 51% of the
employment generated in the enterprise to women”. Kerala Government defined women
industrial units as unitsowned/ organized by women and engages in small scale and cottage
industries with not less than 80% of the total workers as women. With effect from 6th Feb. 1992,
the definition of ‘Women Entrepreneurs’ Enterprises is as follows: “A small scale industrial
units/industrially related servicesor business enterprise managed by one or more women
entrepreneurs in proprietary concerns inwhich she/they will individually or jointly have share
capital of not less than 51% as partners/ shareholders / directors of private limited company,
members of co-operative society”.

REASONS FOR THE SLOW GROWTH OF WOMEN ENTREPRENEURSHIP
 Un favorable family background
 Lack of business education
 Dual role of women
 Lack of aptitude and training.
 Absence of individualistic spirit
 Lack of freedom to choose a job according to ability, influence of sex, custom etc.
 Inadequate infrastructure facilities.
 Shortage of capital and technical knowhow
 Lack of adequate transport and communication facilities
 Shortage of power.
 Lack of security.
 Absence of ideal market conditions.
 Corruption in administration.
PROBLEMS OF WOMEN ENTREPRENEURS

1.Shortage of Finance: Women and small entrepreneurs always suffer from inadequate
fixed and working capital. Owing to lack of confidence in women’s ability, male members in the
family do not like to risk their capital in ventures run by women. Banks have also taken negative
attitude while lending to women entrepreneurs. Thus women entrepreneurs rely often on
personal saving and loans from family and friends.
2.Shortage of Raw Material: Women entrepreneurs find it difficult to procure material and
other necessary inputs. The prices of many raw materials are quite high.
3.Inadequate Marketing Facilities: Most of the women entrepreneurs depend on
intermediaries for marketing their products. It is very difficult for the women entrepreneurs to
explore the market and to make their product popular. For women, market is a ‘chakravyuh’.
4.Keen Competition: Women entrepreneurs face tough competition from male entrepreneurs
and also from organized industries. They cannot afford to spend large sums of advertisement.
5.High Cost of Production: High prices of material, low productivity. Under utilisation of
capacity etc. account for high cost of production. The government assistance and subsidies
would not be sufficient for the survival.
6.Family Responsibilities: Management of family may be more complicated than the

management of the business. Hence she cannot put her full involvement in the
business.Occupational backgrounds of the family and education level of husband has a direct
impact on the development of women entrepreneurship.

7.Low Mobility: One of the biggest handicaps for women entrepreneur is her inability to travel
from one place to another for business purposes. A single women asking for room is looked upon
with suspicion. Sometimes licensing authorities, labour officials and sales tax officials may
harass them.
8.Lack of Education: About 60% of women are still illiterate in India. There exists a
belief that investing in woman’s education is a liability, not an asset. Lack of knowledge and
experience creates further problems in the setting up and operation of business.
9.Low Capacity to Bear Risks: Women lead a protected life dominated by the family members.
She is not economically independent. She may not have confidence to bear the risk alone. If she
cannot bear risks, she can never be an entrepreneur.
10.Social Attitudes: Women do not get equal treatment in a male dominated society. Wherever
she goes, she faces discrimination. The male ego stands in the way of success of women
entrepreneurs. Thus, the rigid social attitudes prevent a woman from becoming a successful
entrepreneur.
11.Low Need for Achievement: Generally, a woman will not have strong need for achievement.
Every women suffers from the painful feeling that she is forced to depend on others in her life.
Her pre-conceived notions about her role in life inhibit achievement and independence.
12.Lack of Training: A women entrepreneur from middle class starts her first entrepreneurial
venture in her late thirties or early forties due to her commitments towards children. Her biggest
problem is the lack of sufficient business training.
13.Lack of Information: Women entrepreneurs sometimes are not aware of technological
developments and other information on subsidies and concessions available to them. They may
not know how to get loans, industrial estates, raw materials etc.
REMEDIES TO SOLVE THE PROBLEMS OF WOMEN ENTREPRENEURS

The following measures may be taken to solve the problems faced by women entrepreneurs in
India:
 In banks and public financial institutions, special cells may be opened for providing easy
finance to women entrepreneurs. Finance may be provided at concessional rates of
interest.
 Women entrepreneurs’ should be encouraged and assisted to set up co-operatives with a

view to eliminate middlemen.

 Scarce and imported raw materials may be made available to women entrepreneurs on
priority basis.
 Steps may be taken to make family members aware of the potential of girls and their due
role in society.
 Honest and sincere attempts should be undertaken by the government and social
organizations to increase literacy among females.
 In rural areas self employment opportunities should be developed for helping women.
 Marketing facilities for the purpose of buying and selling of both raw and finished goods
should be provided in easy reach.
 Facilities for training and development must be made available to women entrepreneurs.
Family members do not like women to go to distant place for training. Therefore mobile
training centers should be arranged. Additional facilities like stipend, good hygienic
crèches, transport facilities etc., should be offered to attract more women to training
centers.
Examples of Indian women entrepreneurs
Ekta Kapoor
1.Ekta Kapoor, creative head of Balaji Telefilms, is the daughter of Jeetendra and sister of
Tushar Kapoor. She has been synonymous with the rage of soap operas in Indian TV, after her
most famous venture ‘Kyunki Saas Bhi Kabhi Bahu Thi’ which was aired in 2000 on Star plus.
Ekta dominates Indian Television.At the 6th Indian Telly Awards 2006,she bagged the Hall Of
Fame award for her contributions.

Neelam Dhawan
2. Neelam Dhawan, Managing Director, Microsoft India, leads Microsoft India. She is a
graduate from St. Stephens College in 1980,and also passed out from Delhis Faculty Of
Management studies in 1982. Then she was keen on joining FMCG majors like Hindustan Lever
and Asian Paints, both companies rejected Dhawan, as they didnot wish to appoint women for
marketing and sales.
Naina Lal Kidwai
3. Naina Lal Kidwai, was the first Indian woman to graduate from Harvard Business School.
Fortune magazine listed Kidwai among the worlds top 50 Corporate Women from 2000 to 2003.
According to the Economic times, she is the first woman to head the operations of a foreign bank
in India. ( HSBC)
Indu Jain
4. Indu Jain, the multi-faceted lady used to be the Chairman of the Times Group-The most
powerful and largest Media house India has known. Indu Jain is known by many different
identities such as that of spiritualist,humanist,entrepreneur,an educationalist but most
prominently she played the role of the Chairman of Times Group. Indu Jain is the perfect picture
of the successful Indian Woman entrepreneur.

Priya Paul
5.Priya Paul, she has a bachelor’s degree specialising in Economics from Wellesley College,
USA. She entered her family business and is currently the Chairperson of Park Hotels.
Simone Tata
6. Simone Tata, has been instrumental in changing a small subsidary of Tata Oil Mills into
the largest cosmetic brand in India – LAKME, synonymous today with Indian Fashion. She
became a part of Lakme during 1961 and has been responsible for turning the company into one
of the biggest brands of fashion in India. At present she is the Chairperson of Trent Limited, a
subsidary of Tata Group.
Mallika Srinivasan
7.Mallika Srinivasan, currently the Director of TAFE- Tractors and Farm Equipment,
India , was honoured with the title of Businesswoman of the Year during 2006 by the Economic
Times. She joined the company in 1986 and has since been responsible for accelerating turnover
from 85 crores to 2900 crores within a span of 2 decades.

Preetha Reddy
8. Preetha Reddy, Managing Director of Apollo Hospitals, Chennai, one of the largest
healthcare conglomerates of India, is one of the pioneer businesswoman of India in the segment
of Health Care Industry.
Remedies to solve the problems of women entrepreneurs:
The following measures may be taken to solve the problems faced by women entrepreneurs in
India:
 In banks and public financial institutions, special cells may be opened for providing easy
finance to women entrepreneurs. Finance may be provided at concessional rates of
interest.
 Women entrepreneurs’ should be encouraged and assisted to set up co-operatives with a

view to eliminate middlemen.
 Scarce and imported raw materials may be made available to women entrepreneurs on
priority basis.
 Steps may be taken to make family members aware of the potential of girls and their due
role in society.
 Honest and sincere attempts should be undertaken by the government and social
organizations to increase literacy among females.
 In rural areas self employment opportunities should be developed for helping women.
 Marketing facilities for the purpose of buying and selling of both raw and finished goods
should be provided in easy reach.
 Facilities for training and development must be made available to women entrepreneurs.
Family members do not like women to go to distant place for training. Therefore mobile
training centers should be arranged. Additional facilities like stipend, good hygienic
crèches, transport facilities etc., should be offered to attract more women to training
centers.

Measures taken for the development of women entrepreneurship in India:
1.TRYSEM: Training of Rural Youth For Self Employment was launched on 15th August 1979
which is still continuing. The objective of TRYSEM is to provide technical skills to rural youth
between 18 and 35 years of age from families below the poverty line to enable them to take up
self employment in agriculture and allied activities, industries, services and business activities.
This is a sub scheme of IRDP. Training given through ITIs, Polytechnics, Krishi Vigyan Kendra,
Nehru Yuva Kendras etc has helped many rural women set up their own micro entreprises with
IRDP assistance.
2.BANKS: Banks particularly commercial banks have formulated several schemes to benefit
women entrepreneurs. These includes Rural Entrepreneurship Development Programmes and
other Training programmes, promotion of rural non-farm enterprise, women ventures etc.
3.NABARD: NABARD as an apex institution guides and assists commercial banks in paying
special attention to women beneficiaries while financing. It has also been providing
refinance to commercial banks so as to help the latter institutions to supplement their resources
which could be deployed for the purpose of financing women beneficiaries.
4.INDUSTRIAL POLICY: The new Industrial policy of Government has specially highlighted
the need for conducting special entrepreneurship programme for women.
5.INSTITUTIONS AND VOLUNTARY ASSOCIATION: Several voluntary agencies like

FICCI Ladies Organization (FLO), National Alliance of Young Entrepreneurs (NAYE) and
others assist women entrepreneurs.
NAYE has been a leading institution engaged in the promotion and development of
entrepreneurship among women. It convened a conference of women entrepreneurs in November
1975. It assists the women entrepreneurs in:
 Getting better access to capital, infrastructure and markets.
 Identifying investment opportunities.
 Developing managerial and productive capabilities.
 Attending to problems by taking up individual cases with appropriate authorities.
 Sponsoring participation in trade fairs, exhibitions, special conference etc.

6.NATIONAL POLICY FOR THE EMPOWERMENT OF WOMEN, 2001: As to the
commitments made by India during the Fourth World Conference on women held in Beijing
during September, 1995, the Department of women and children has drafted a national policy for
the empowerment of women. This is meant to enhance the status of women in all walks of life at
par with men.
ASSISTANCE TO WOMEN ENTREPRENEURS

7.SMALL INDUSTRIAL DEVELOPMENT ORGANISATION (SIDO) : SIDO through a
network of SISIs conduct the EDPs exclusively for women entrepreneurs. The aim is to develop
entrepreneurial traits and qualities among women and enable them to identify entrepreneurial
opportunities etc.
8.NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) : The H.P. scheme of NSIC

provides preferential treatment to women entrepreneurs. It also conducts Entrepreneurs and
Enterprise Building programmes for women.
9.INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) : The schemes of IDBI for

women entrepreneurs are summarized as follows:
10.PROMOTER’S CONTRIBUTION: The IDBI set up the Mahila Udyan Nidhi (MUN) and
MAHILA VIKAS NIDHI (MVN) schemes to help women entrepreneurs. IDBI conduct
programmes of training and extension services through designated approved agencies and
association with other development agencies like EDII, TCOs, KVIC etc.
11.SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI): SIDBI has special
schemes for financial assistance to women entrepreneurs. It provides training and extension
services. It gives financial assistance at concessional terms in setting up tiny and small units.
12.COMMERCIAL BANKS: The “Sthree Shakthi Package Scheme” of SBI provides a

package of assistance to women entrepreneurs. The consultancy wings of SBI give guidance on
project identification and project viability. The program of assistance such as repair and
servicing, photo copying, dry cleaning, retail trade business enterprises, poultry farming,
tailoring etc. The Bank Of India has introduced a scheme known as ‘ Priyadarshini Yojana’ to
help women entrepreneurs.
13,KUDUMBASREE UNITS: With the objectives of poverty eradication and women

empowerment Kudumbasree has been introduced in Kerala. The poor women are organised into
community- based organisations. They start and operate micro enterprise. They earn income
through self-employment.

ETHICS AND SOCIAL RESPONSIBILITY OF AN ENTREPRENEURE
Definition
Social Responsibility means eliminating corrupt, irresponsible or unethical behaviour which
might harm to the community, its people and the environment.
Social Responsibility implies that business man should oversee the operation of an economic
system that fulfils the expectations of the public. - W.Fredick
Social Responsibility has been defined by Andrews “By social Responsibility, we mean the
intelligent and objective concern for the welfare of society that restrains individual and corporate
behaviour from ultimately destructive activities, no matter how immediately profitable, and leads
in the direction of positive contributions to human betterment, variously as the latter may be
defined
Need of Ethics to An Entrepreneur

The social dimensions of business ethics cannot be The social dimensions of business ethics
cannot be overlooked because many problems arise from the relationship of business to the
boarder society. Ethical considerations are significant for managers due to the following reasons:
 For every individual job is the Centre of life. Unless job values are in harmony with the
rest of life, he cannot be happy and healthy person.
 Modern society is an industrial society. Therefore, business value becomes the value of
the society as a whole.
 An entrepreneur must take into moral and social consideration . because these are the real
motivating factors
 When an organization fails to behave in accordance with the social expectations, it may
lose not only its image and market share but it’s very right to exist.
 The study of business ethics insulates high level of integrity to an entrepreneur. value
becomes the value of the society as a whole.
 Ethical knowledge will help the entrepreneur in setting knowledge will help the
entrepreneur in setting highly responsible tone for the organization in individual judgments
and decisions whether ethical or not.
Causes of Growing Concern for Social Responsibility

 Social responsibility is a very effective exercise of public relations.
 Image building of a business house in a society.
 Two-way activities, CSR make the upliftment of society which in turn will co-operate with
business firm in achieving their business goals.
 To make the best use of natural resources so as to raise the level of national income and
standard living of people.
 To create more and more employment opportunities for semi- skilled people.

 To protect the ecology of nation.6. To contribute to the economic development of
backward.
 To contribute to the economic development of backward region of the country.
Social responsibility towards different Sections of the Society

1. Responsibility Towards Employees:
 Fair wages and salaries

 Adequate Basic Facilities like safe drinking water, electricity canteen, hygienic toilets.
 Skill development programmes..
 Good and safe working environment .
 Retirement benefits and pension schemes
 Collective bargaining
 Insurance cover
 Medical facilities
2.Responsibility Towards Public in General:
 Help the weaker section of the society.
 Creation of job opportunities.
 Improvement in living standards.
 Building of basic infrastructure like roads, sewerage.
 Health and educational development schemes.
 To make best use of society’s resources for their welfare.

3.Responsibilty Towards Customers:
 Charge reasonable price for products or services.
 Supply of right quality of goods in right quantity.
 No use of manipulated or false advertisements.
 Avoid unfair selling practices.
 Fair guarantee of product
4.Responsibility Towards Shareholders:
 A fair return on investment.

 Safety of invested capital.

 oRegular and complete information about the

performance and progress of the company
 oRegular Payment if dividend

5. Responsibility Towards Suppliers, Creditors,
 Maintain healthy and co-operative inter-business relationship

between different businesses
 Provide accurate and relevant information to creditors.
 Payment of price of materials on time.
 Prompt payment of interest on borrowed funds.
 Producing original documents for credit processing.
6. Responsibility towards Government:
 Payment of corporate tax in correct amount with no
manipulation of profit figures.
 To avoid corrupting public servants by offering bribe.
 To encourage fair trade practices.
 To avoid monopoly practices.
 To improve national income.

CORPORATE ENTREPRENEURSHIP OR INTRAPRENEURSHIP
Entrepreneurship inside of established organizations is called Corporate Entrepreneurship or

Intrapreneurship. All companies want organic growth but few organizations have a process in
place to support and sustain growth over time. An innovation process alone is not
enough. Organizations need to build a framework to support innovation and new business
growth. So Corporate Entrepreneurship is a process used to develop new businesses, products,
services or processes inside of an existing organization to create value and generate new revenue
growth through entrepreneurial thought and action.
Definition
Sharma and Chrisman define it as “the process whereby an individual or a group of

individuals, in association with an existing organization, create a new organization or instigate
renewal or innovation within that organization.”
Wolcott and Lippitz define it as “the process by which teams within an established company
conceive, foster, launch and manage a new business that is distinct from the parent company but
leverages the parent’s assets, market position, capabilities or other resources.”
Intrapreneurship vs Entrepreneurship Difference
Factors Intrapreneurship Entrepreneurship
Intrapreneur is an entrepreneur who takes Entrepreneur is a person who sets up a

responsibility of building an idea into business to make profit and is
Definition
finished and profitable product with responsible for all risks involved in the
support from his employer. process.
Dependence Dependent on employer Works Independently
Needs to mobilize the resources on his

Resources Is dependent on employer for resources own from fundraising to hiring,
planning, launching and marketing.
Needs to raise funds on his in the form

Funds Completely financed by the employer of loans, from investors, family or
friends
Primarily involved in top level tasks and

Work has an access to large pool of people for Has to take care of all type of tasks
execution of tasks from beginning

Decision
Collaborative decision Free to take decisions
making
Entrepreneurship is closely linked to

risk-taking. Top risks Entrepreneurs
Risks Medium to no risks
face are career, mental health, personal
finances, family etc.
End Notes Medium to low risks, low rewards Winner takes all
Example of Intrapreneurship
A classic case of an entrepreneur is that of the founders of Adobe, John Warnock, and Charles
Geschke. They both were employees of Xerox. As employees of Xerox, they were frustrated
because their new product ideas were not encouraged. They quit Xerox in the early 1980s to
begin their own business. Currently, Adobe has an annual turnover of over $3 billion.
Examples of Intrapreneurs
A lot of companies are known for their efforts towards nurturing their in-house talents to
promote innovation. The prominent among them is “Skunk Works” group at Lockheed Martin.
This group formed in 1943 to build P-80 fighter jets. Kelly Johnson was the director of the
project, a person who gave “14 rules of intrapreneurship”.
At “3M” employees could spend their 15% time working on the projects they like for the
betterment of the company. On the initial success of the project, 3M even funds it for further
development.
Genesis Grant is another 3M intrapreneurial program which finances projects that might not
end up getting funds through normal channels. Genesis Grant offers $85,000 to these innovators
to carry forward their projects.
Robbie Bach, J Allard and team’s XBOX might not have been feasible without the Microsoft’s
money and infrastructure. The project required 100s of millions and quality talent to make the
product.
Patrick Naughton was almost about to leave Sun Microsystem in 1995. He was going due to the
apathy of the company towards PC consumer market. He stayed back after management allowed
him to create and head a team dedicated to creating a product. His team later was responsible for
creating Java which now runs over 3 billion mobile phones.

Characteristic
1.Money is not their measurement. Intrapreneurs certainly respect the value and importance of
money. They understand the economic drivers that allow the organization to succeed and are
able to support this fundamental truth and not fight it. A non-intrapreneur is perpetually looking
for non-economic ways to justify their own advancement and payment. An intrapreneur “gets it”
and does their work in a way that shows the organization they are someone it can’t afford to lose.
The money and advancement finds them.
2. They are “greenhousers.” When you speak about an intriguing idea to an intrapreneur, the
idea never leaves them. It germinates within their mind, and they carry with them the desire to
figure out how to make it work. When you see them next, they are likely to have grown the seed
of an idea into a full-blown plan or they will have created an even better set of alternative plans
in its stead.
3.They know how to pivot. Intrapreneurs aren’t afraid to change course, nor do they fear
failure. It isn’t outward bravado that drives them but an inner confidence and courage that every
step takes them closer to their ultimate goal. In my own training and vernacular I call this
phenomenon “failing up.” I celebrate opportunities for growth, even painful ones.
4. They behave authentically and with integrity. Most importantly, intrapreneurs exhibit the
traits of confidence and humility—. Integrity (along with Respect, Belief, and Courage) are key
among the traits
Role
Corporate entrepreneurship sets the context for innovation and growth. It provides a systems
view of the resources, processes and environment that are needed to support, motivate and
engage the organization in entrepreneurial thinking and action. .
Organizations with strong entrepreneurial orientations statistically perform better. They achieve
higher levels of productivity, innovation, growth and financial returns.
Although business growth is the overall end game, corporate entrepreneurship is difficult to
achieve. It challenges traditional organizational practices. Many of the things needed to support
the core business are just the opposite of what you need to do to build a new business.
There is no perfect way to implement corporate entrepreneurship. There are however three
components that enable corporate entrepreneurship; people, process and place.
 People – leaders that possess a core set of action oriented competencies and behaviors
 Process – systems and processes that support entrepreneurial thinking and action
 Place – an environment conducive to entrepreneurship, learning and growth
It is well known that internal champions (mavericks) can be effective in bringing new ideas to
market. It is well researched that having the right processes can help facilitate

entrepreneurship. It is well documented that creating an entrepreneurial culture can direct
organizational behavior toward more entrepreneurial pursuits. But…..
What is less understood is that all three of these elements are needed for corporate
entrepreneurship to be successful and sustainable over time.
The goal of corporate entrepreneurship is to build capabilities that enable organizations to

accelerate new business growth.
As an innovation method, corporate entrepreneurship is not based on institutionalized processes

and competencies but on the flair and improvisation of individuals. It places individuals and their
social interactions at the heart of the innovation process. Corporate entrepreneurs are
autonomous and committed employees who behave like partners of the organization rather
than cogs in the process. Furthermore, corporate entrepreneurs not only contribute to
the innovation process as specialists, they also take responsibility for all aspects of their project
during its different phases. They cannot rely on a predetermined allocation of funds and
instead need to constantly “sell” their project internally in order to obtain the resources they
need. It is also common for corporate entrepreneurs to work on their project in parallel with their
other activities, at least initially. They draw on informal networks to obtain resources
and support and do not necessarily follow standard
procedures. Finally, corporate entrepreneurs are prepared to take personal responsibility for the
success or failure of their project.
Corporateentrepreneurs’ autonomy, commitment and gradual allow them to accelerate the

development cycle and to increase their project’s chances of success while minimizing the costs
and risks inherent in pursuing innovative activities. But they are also isolated and often
face strong asymmetry in their relationship with the organization, which may ultimately weaken
the development of their project. In addition, their incremental approach can prove to
be disadvantageous when scaling up their project. Innovating “entrepreneurially” rather
than institutionally has advantages and disadvantages: it is therefore important to
identify situations in which the advantages are sure to exceed the disadvantages.
Two situations particularly suited to corporate entrepreneurship
1. When rapidity and responsiveness are key success factors
As individuals play a central role in the process, corporate entrepreneurship offers the advantages
of rapidity and responsiveness, because individuals – not organizations – are able to mentally
combine the key dimensions (technologies, resources, workflows and market requirements) of an
innovative project, to rapidly integrate new information and to immediately alter their course of
action. Corporate entrepreneurship can therefore be used to accelerate development cycles and to
fine-tune the response to market demands. On the other hand, corporate entrepreneurship is less
suitable when reliability is a key success factor. In such cases, institutional innovation with its
formalized processes and decision-making rules is better equipped to guarantee a predictable end
result, aligned with stringent safety and performance requirements. Although corporate
entrepreneurship can occupy a central place in the development of new activities in industries

such as fashion, food or services, it cannot play the same role in the nuclear, aerospace, finance
or public services industries, for example.
2. The company has expertise in a core technology (or technologies) with multiple
applications
3M and W.L. Gore and Associates are two large companies whose strong capacity for innovation
relies heavily on corporate entrepreneurship. They are structured as large incubators where
individual initiatives are given plenty of freedom when it comes to designing new products.
These strongly diversified companies roll out their core technologies to hundreds of applications,
each very different from the other but all with the potential to occupy profitable niches. Because
of the emphasis it places on individual initiative, entrepreneurial innovation encourages
proliferation and diversity and multiplies the number of new products launched each year.
Whether at 3M or Gore, the products launched all leverage perfectly mastered core technologies,
which form a shared knowledge base available to potential innovators. Conversely, companies
that focus on a single product (automotive, aerospace, microprocessors) and whose design and
production processes are based on the integration of multiple technologies are less likely to
benefit from the initiative and individual improvisation that characterises entrepreneurial
innovation.
ENTREPRENEURIAL MOTIVATION
Entrepreneurial motivation is the process of transforming an ordinary individual to a powerful

businessman, who can create opportunities and helps in maximizing wealth and economic
development. It is defined as various factors stimulate desires and activates enthusiasm in
entrepreneurs which make them attain a particular goal. Entrepreneurship is the process of
identifying strengths and opportunities which help in the realization of one’s dreams for
designing, developing and running a new business by facing threats and risks effectively.
Internal factors
1.Need for self-actualization
2. Optimism
Individuals having positive mindset get motivated by finding opportunities during critical
situations also. Positive attitude and perception motivate an individual to work out for the best
even during unfavorable and tough situations also.
3.Positive attitude
The positive attitude is the most important factor which motivates the individuals to become
successful entrepreneurs. Habituating positive attitude can lead an individual to develop
constructive thinking; it motivates them to become powerful entrepreneurs, finally, the positive
attitude can prove that how valuable they are
Enthusiasm
Enthusiasm motivates in finding better solutions, finally, it stabilizes the ideas and makes them
become creators and innovators which result in successful entrepreneurs
Commitment
Commitment towards a goal can make to achieve success. It motivates entrepreneurs by inspiring
and developing emotional attachment towards an objective.
Education
Education is the most important factor it motivates a person to innovate and create new products,
this result in establishing an organization or a new business venture. The knowledge acquired
during the course of time and innate skills highly motivates a person to become a successful
entrepreneur.
Background
Family background, occupational background and a person’s own experience in a job motivates
him/her to become an entrepreneur. Having entrepreneurial background acts as a clear path to
becoming a successful and powerful entrepreneur.
Financial background
Finance is the scarce resource which motivates and enables a person to become an entrepreneur.
Money can make many things it is the major thing in deciding one’s status and development,
strong financial background facilitates to start a business.
External factors
Influence
Influence of family members, friends, and society motivates the individuals to become
entrepreneurs. The extent of influence shows an effect on the character, behavior, and
development, it comes from the external environment. Here people get influenced by seeing
successful entrepreneurs or by the words of others.
Availability of resources
Resource availability motivates at a high extent to become entrepreneurs, availability of land,
labor, money, machinery, and materials make individual to start a new business. Though there is
creativity, intelligence, commitment and enthusiasm in the individuals, but the unavailability of
resources becomes an obstacle for new entrants or entrepreneurs

Product’s demand
Higher demand for a particular product motivate entrepreneurs to produce innovative and value
added products, here product’s demand motivates the individuals to become entrepreneurs. The
hope of success makes them produce innovative products or substitute products, some
entrepreneurs fulfill the market demand by producing complementary goods also. So the increase
in products demand highly motivates to become entrepreneurs.
Government policies
Subsidies and benefits given by the government motivate entrepreneurs to produce new products
or motivates individual to become entrepreneurs. Government policies show higher influence on
establishing new firms and it leads to economic development. In the case of small scale
industries, rural people are encouraged by the various training programs, financial support, and
subsidies; it is one of the main reasons for the establishment of new firms and arrival of new
entrants.
Information availability
Market knowledge and information motivate individuals to enter into the markets and to become
entrepreneurs. If there is abundant information then it automatically creates interest in the minds
of enthusiastic people to become entrepreneurs. Availability of information facilitates research
and producing innovative and value added products, and it creates a scope to become
entrepreneurs.
Technological advancement
Technological advancement acts as a path to transform ideas into products, feasibility in
production and expected success rate highly motivates to become entrepreneurs. It reduces errors
and cost of production and maximizes success rate, this is the reason why people are interested in
becoming entrepreneurs with the increase in technology.
Changing tastes and preferences

Changing tastes and preferences of the customers maximizes the chance to produce substitute
and complementary goods, it creates a scope to innovation and establishment of the new
ventures.
Entrepreneur motivation
.The driving force: what motivates Indian entrepreneurs

Motivator % mentioning
Rewards of entrepreneurship
Autonomy 57
Making money/financial independence 43
Saw business opportunity/impact on industry 27
Recognition of self and/or organisation 23
Desire to create something new/innovate 20

Build something important/make a difference 17
Grow a business from scratch 17
Desire to be entrepreneur/excitement of
3
entrepreneurship
Personal qualities
Intellectual challenge/achieve potential 27
Instinct 10
Others 10
Career
Career growth/diversification/satisfaction 13
Others 3
Experience
Utilise previous experience 6
Had technology/industry vision 3
Non-monetary factors
Help India in various ways 23
Non-monetary success/personal satisfaction 7
Create value/jobs/wealth in society 3

UNIT -II
TRAINING
Content: Designing Appropriate Training prgramme to inculcate entrepreneurial skill,

Training for new and existing entrepreneur, feedback and performance of trainees.
Creativity and entrepreneurship: sources and methods of Idea planning and development
of programmes, E-Business Venture: New Venture management. Emerging trends
SOURCES OF IDEAS
1.Look within yourself and examine your skills, talent, passion
In fact, one of the first places to start when looking for business ideas or opportunities is to look
within yourself. Most people miss this greatest source of business ideas because of ignorance,
laziness and self doubts. If you are talented or having a proven track record in a specific field,
then it is time to analyze such skill or talent. To discover what you are good at or what business
to start, you can begin by asking yourself the following questions:
 What skills or talents do you possess?

 What are your hobbies? What are you passionate about?
 Do you possess a skill that people are willing to pay for?
2. Keep up with current events and be ready to take advantage of business opportunities
Societal happenings, events and trends are also sources of business ideas. If you are expose to
reading and watching news regularly and having the conscious intent of discovering business
ideas, you will be amazed at how many business opportunities that your brain will generate.
Keep up with current events because it will assist you to identify market trends, new fads,
information about industries and sometimes new ideas that have business possibilities and
potentials.
3. Invent a new product or service
Do you possess a creative mind? Then you can invent product or services that have never existed
in the past? To develop a creative mind, you need a mindset or perception that see beyond
problems. You have to look around and ask yourself Then you can proceed to ask people about
additional services that they would like to see. You need to think like great entrepreneurs such as
Thomas Edison, Alexander Graham, Steve Jobs, etc.
To develop winning ideas, you need to concentrate on a specific target market and analyze and
brainstorm business ideas for services that the group would be interested on. The key to arriving
at business ideas for a new product or service is to identify a market need that has not being met.

For example, the clamor for improved security has led to an explosion of new security products
and services; from iris-recognition machines through home security services.
4. Add value to an already existing product
The uniqueness between raw wood and finished lumber is a nice instance of putting a product
through an additional process which maximizes its value, but additional processes are not the
only way that value can be added. You may as well add services or combine the product with
other related products.
For example, yam flour (Amala and Pounded Yam) is a locally processed commodity but
somebody took the pain to refine it better, package it, brand it and began exporting it. That is an
example of adding value to an already existing product. Bottled water has been in existence in
Nigeria but it was on the high side with respect to price. However, somebody sat down and
thought up the “sachet water” which comes at an affordable rate.
Now how do you develop these business ideas? The answer is simple? Look beyond the lines.
Ask yourself the following questions: What are those products you use that could be improved
upon? Which industry are things poorly done? If you can answers such questions, you can create
a profitable business.
5. Franchising
A franchise is just an arrangement whereby the manufacturer or the sole distributor of a

trademark, product or service grants exclusive rights for local distribution to independent
retailers in return for their payment of conformity and royalties in order to standardize operating
procedures. Franchising may take several forms, but the most interesting one is the type that
offers a name, method of running business, image and operating principles.
Now how can franchising become a source of business opportunities? Well, you can look at
good companies or products that exist in other countries but are not operating your country. Then
you can purchase a franchise to that product and become a pioneer in your country.
6. Mass media
The mass media is a wonderful source of information, ideas and often opportunities. Magazines,
TV stations, Cable networks, radio, newspapers and internet resource sites are all instances of
mass media. Just take a careful look at the commercial advertisements in newspaper or magazine
and you will discover businesses that are for sale.
Also, articles in the printed press or on the net or documentaries on television may report
changes in consumer needs or fashions. For instance, you may read or hear that people are now
highly interested in healthy eating or physical fitness. You may as well discover advertisements
calling for the provision of certain services depending on skills. Or you might find out a new
concept for which investors are needed, such as a franchise.

7. Exhibitions, Expos and Trade shows
Another means to discover business ideas and opportunities is to attend exhibitions and trade
fairs. These are usually advertised on the radio or in newspapers. By visiting such events
regularly, you will not only find out new products and services, but you will as well meet sales
representatives, wholesalers, distributors, manufacturers and franchisers. These are always
excellent sources of ideas in business.
8. Industrial Surveys
The main point for a new business idea should be the customer. The needs and wants of the
customer, which will provide the rational for a product or service, can be analyzed or ascertained
through a survey. Such a survey may be conducted formally or informally by speaking to people;
usually through interviews or using a questionnaire or through observation.
9. Listen to customers complaints
Complaints and frustrations on the part of customers have led to many new products or services.
Whenever consumers complain badly or bitterly concerning a product or service, or when you
hear someone saying ‘I wish there was … “or “If only there were a product/service that could …
“, then, you have the potential for a business idea. The idea can be to set up a rival company
offering a better product or service, or it may be a new product or service which can be sold to
the company in question or to others.
10. Brainstorming
Brainstorming is a creative problem-solving technique, and also a source for generating ideas.
The object is to arrive with as many ideas as possible. It usually begins with a question or
problem statement. For instance, you may ask “What are the products and services required in
the home today which are unavailable?” Each idea can lead to one or more additional ideas,
resulting in a good number.
11.Government policies and priorities and regulatory mechanism clearly indicates the
entrepreneurial opportunities.
12. Strategic changes
13. Distribution channels
15. Research and development
16.Trends:Social trends, technology trend, economic trend and government trend
Methods of generating new ideas
1. Focus Groups ? these are the groups of individuals providing information in a structural
format. A moderator leads a group of people through an open, in-depth discussion rather than
simply asking questions to solicit participant response. Such groups form comments in open-end

in-depth discussions for a new product area that can result in market success. In addition to
generating new ideas, the focus group is an excellent source for initially screening ideas and
concept.
2. Brainstorming ? it is a group method for obtaining new ideas and solutions. It is based on the
fact that people can be stimulated to greater creativity by meeting with others and participating in
organized group experiences. The characteristics of this method are keeping criticism away; free
wheeling of idea, high quantity of ideas, combinations and improvements of ideas. Such type of
session should be fun with no scope for domination and inhibition. Brainstorming has a greater
probability of success when the effort focuses on specific product or market area.
3. Problem inventory analysis? it is a method for obtaining new ideas and solutions by focusing
on problems. This analysis uses individuals in a manner that is analogous to focus groups to
generate new product areas. However, instead of generating new ideas, the consumers are
provided with list of problems and then asked to have discussion over it and it ultimately results
in an entirely new product idea.
4.Meet new people.
Seriously. Go out and meet new people to get out of your idea rut. Talking to new people who
not only don’t think like you but who don’t know how you think can help freshen up your
brainstorming process. Go to networking and learning events, talk to people outside your
industry and/or strike up a conversation with your existing customers.
5.Keep a “pain point” journal.

Successful companies all have one thing in common: they solve a problem. Companies like
Google, Netflix and Uber solved specific pain points in their marketplace and went on to achieve
great things.
 I wish I could find information on a specific topic from various sources quickly.
 I wish I could rent movies and television shows directly from my television at a low cost.
 I wish there was a cheaper way to get a ride.
Ask yourself: What bugs me? Keep a journal where you write down your everyday frustrations.
Review the journal regularly and run it by others to see if it’s a pain point for them.
What product or service could you create that would solve that problem?
6. Tap into your interests.

The famous restaurant and travel guide Zagat is an often cited example of finding a business in
something you love. The founders of Zagat, Tim and Nina Zagat, were lawyers who loved to eat
out at restaurants. In 1979, they started a newsletter asking their friends to rate restaurants. As
the newsletter got bigger every year, they began charging money for their work. In 2011, the
company was bought by Google. Not bad for a newsletter. Take an inventory of your hobbies
and interests. What are the business opportunities you could create from something you love to
do anyway?

7. Explore new ways of thinking.
New methodologies and ways of thinking are constantly evolving and some industries are better
at embracing them than others. Take design thinking for example. Design thinking is a mindset
and a methodology used to better understand problems and implement creative solutions,
articulated first by David Kelley, co-founder of the design firm IDEO. The company has
designed products for iconic brands such as Apple, Steelcase and Oral-B.
8. Travel.
There’s a whole big world out there of great ideas that aren’t yet in your market. If you see an
idea you love in your travels, you can take it back home and give it a new spin that specifically
addresses the needs of your market or community. Even if you don’t find inspiration, traveling
will help take you out of your surroundings and refresh your system. There’s also places around
the world that have ideas waiting to be commercialized, such as in universities that have
technology transfer offices. Take an existing idea and launch it to market.
9. Go online.
Don’t waste your time looking at cat videos online. Fine, don’t waste all of your time looking at
cat videos online. Look up entrepreneurship and industry related communities. Go on Twitter
and search relevant hashtags to see what people are talking about. For example, if you’re
interested in social finance and social innovation, consider hashtags such as #impinv (impact
investing), #socfin (social finance), #socinn (social innovation), #susty (sustainability), #socent
(social entrepreneur or social enterprise) and #csr (corporate social responsibility). You might
learn about new niche fields, networking opportunities or other topics that might spark
something. Become a student of your industry and entrepreneurship.
10. Do your market research.

So you have a potential inkling of an idea but aren’t sure if it really has any potential. Research
the market to see what’s out there and where your idea could fit in. Besides your standard online
search and library stop, there’s tons of resources out there to help you along. For example, MaRS
Market Intelligence provides Ontario entrepreneurs with access to current, relevant and timely
information about your industries, competitors, markets, potential investors and partners,
intellectual property and best business practices at no cost.
TRANS FORMING IDEAS INTO OPPORTUNITIES
1.Choose a problem-solving idea that reflects your strengths. The problem-solving idea
should mirror your personal passions and align with your professional strengths. Be honest: Does
the solution leverage your area of professional competence or personal passion? Does it take into
account how you operate best? Don’t fool yourself and waste time — a precious commodity that
can’t be recouped — by pursuing problem-solving ideas that you are not passionate about or that
fail to capitalize on your strengths.

2. Use a 360˚ view. Evaluate your problem-solving idea from every conceivable angle. Be
honest: Who are the customers, and why would they pay for your product or service? Is the
market big enough to justify your time commitment, the opportunity cost involved and the
investment capital needed to satisfy customer needs? Is the expected return on investment large
enough to warrant the effort and sacrifice required to see the idea through to fruition?
3. Seek honest feedback. Find people who tell the truth, and request that they give you honest,
constructive feedback. Seek those truth-tellers who have intimate market knowledge, understand
what financial and business models work most effectively, recognize the competitions’
advantages over you and have “been there, done that” credibility. Also, talk to lots of prospective
customers to find out what they think of your problem-solving ideas; listen carefully to what they
tell you.
4. Take action. After receiving honest and constructive feedback from credible truth-tellers, take
action. Write up a detailed action plan that starts with baby steps and advances to larger, more
ambitious leaps. Next, identify the most important goal needed to be achieved in the first six
months; then, list the next set of mission-critical goals that need to be achieved over the next 12
months…18 months…24 months. Follow the plan with extreme disciplined focus!
5. Build an ugly prototype. Conceive a bare-bones prototype of your idea, and then build it as
quickly and as inexpensively as possible. Go ugly, early. So what if you are embarrassed by how
the prototype looks — ship it! Then, seek out user feedback and waste no time incorporating the
most constructive feedback into the next version of your “baby.” Repeat the process until the
customer — not you — is satisfied with your problem-solving solution.
6. Perfection is taboo. When starting out, your focus should be on building, releasing and
shipping products or services that are “good enough” — unless you build bridges, manufacture
heart stents, etc. Most products and services do not require perfection, so don’t strive for it.
Microsoft became a multi-billion dollar leader in a multi-trillion dollar industry by being “good
enough.” Why can’t your company?
7. Test. Determine if your product or service satisfies your customers’ needs. Test how well it
performs, test if it is priced correctly, test how customers use it, and test if your marketing
message is succeeding at recording revenues, generating sales leads, and filling sales and
distribution channels. Measure results, make improvements and test some more. Never. Stop.
Testing.
8. Adjust. Testing generates lots of data. Evaluate this data, and look for patterns, trends and
commonalities to make impactful adjustments. Adjust only what needs improvement — keeping
in place what’s good enough. Remember: Good enough becomes better in the next iteration.
9. Past forward. You read that right: Past forward. Look back at the steps taken; you’ll find that
you are your most ardent critic, yet hopefully you see incremental progress being made. Build on
this progress by applying lessons learned in taking the next set of incremental steps forward
during the next round of improvements. The goal is slow and steady, so there’s no need to leap
forward. Run this long distance race at a marathoner’s pace — not a sprinter’s.

10. Make it happen. Play to win. Fail fast. Fail cheap (especially if other people’s money is
involved). Sell your product or service, and sell it again…and again. Improve on the product or
service, and sell that. Then, sell more and more of it. Eventually, cash in. Go on vacation. Get
bored. Start the journey again at No. 1, and admit to yourself what you’ve long suspected:
You’re addicted to innovation.
ENTREPRENEURSHIP DEVELOPMENT PROGRAMMES (EDPS )
Objectives of EDP:
The major objectives of the Entrepreneurship Development Programmes (EDPs) are to:
a. Develop and strengthen the entrepreneurial quality, i.e. motivation or need for achievement.
b. Analyse environmental set up relating to small industry and small business.
c. Select the product.
d. Formulate proposal for the product.
e. Understand the process and procedure involved in setting up a small enterprise.
f. Know the sources of help and support available for starting a small scale industry.
g. Acquire the necessary managerial skills required to run a small-scale industry.
h. Know the pros and cons in becoming an entrepreneur.
i. Appreciate the needed entrepreneurial discipline.
j. Besides, some of the other important objectives of the EDPs are to:
k. Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and strive
for their realization.
l. Prepare him / her to accept the uncertainty in running a business.
m. Enable him / her to take decisions.
n. Enable to communicate clearly and effectively.
o. Develop a broad vision about the business.
p. Make him subscribe to the industrial democracy.
q. Develop passion for integrity and honesty.

r. Make him learn compliance with law.
CREATIVITY
Creativity is defined as the tendency to generate or recognize ideas, alternatives, or possibilities
that may be useful in solving problems, communicating with others, and entertaining ourselves
and others
WHY CREATIVITY IS SO CRUCIAL FOR ENTREPRENEURS?

A thorough observation of the entrepreneurial process shows that creative thinking is the must
have “skill” of an entrepreneur for the creation of new ideas. Creativity allows a person to devise
interesting processes, which gives so many advantages to entrepreneurs.But what exactly makes
creativity so crucial and important in an entrepreneur’s work life?
Creativity leads to success by:
Creating new ideas for competitive advantage. The whole process of entrepreneurship is
rooted in creation and exploration of new ideas. When an entrepreneur is able to generate a new
idea that is feasible as well as efficient, it gives him an edge over the competition. The ability to
explore different niches is just like a learned skill or a resource that is possessed by an individual.
Thinking of novel ways to develop your product and improve the business. Creativity helps
develop new ways of improving an existing product or service and optimizing a business. There
is always a room for improvement in the deliverables of an enterprise; it is the creative
entrepreneur who can assess how to do it.
Thinking the unthinkable. Creativity requires imagination to produce the most obscure ideas.
Imagination is needed to cross the boundary of “usual” and “normal” or to think outside the box.
This allows entrepreneurs to think beyond the traditional solutions, come up with something
new, interesting, versatile, and yet have success potential.
Finding similar patterns in different areas. Sometimes, due to following a routine or a habit,
the thinking process also goes along the line of those established processes. Creativity enables
people to connect dissimilar and unrelated subjects and make successful entrepreneurial ideas.
Merging different fields creates interesting intersections that creates new niches. Most people are
afraid of bringing different disciplines together, but most interesting ideas come from colliding
different fields.
Developing new niches through creativity and entrepreneurship. In entrepreneurship, it is

important that new aspects of traditional business are explored. This can be in the form of
changing the method of manufacturing the product or delivering the service or how are they
supplied to the user. All these areas can create a niche that has great potential in business.

THE ROLE OF CREATIVITY IN ENTREPRENEURSHIP
1.High overall success

There is a misconception that people only needs intelligence to achieve everything they need in
life.
However, it takes time for aspiring entrepreneurs to realize that creativity plays an integral role
as well.
Unfortunately, a lot of learning institutions stress more on intelligence than creative thinking. It
could perhaps be because intellectual knowledge is measurable whereas creativity can be
challenging to spot. Nonetheless, dynamics are changing, and entrepreneurs are beginning to
realize the importance of bringing creative people on board. Creative workers can be a game
changer in your company if you harness and shape their skills adequately.
2.Increase productivity
Creativity allows an entrepreneur to disconnect from the accustomed and move into uncharted
territories with an aim to discern unique and useful solutions. It has, therefore, become essential
for both leaders and employees to develop creative skills. Entrepreneurs are providing the
necessary technological resources such as visual collaboration, which is often confused with
video conferencing to help their workers discover innovative solutions and ideas. In fact, this is
an extremely cost-effective strategy to increase workplace productivity. Innovation and creativity
bring an entrepreneur to the success path.
3.Exploit employee potential

You are probably utilizing only half of your employee’s potential by not encouraging workplace
creativity. Fortunately, entrepreneurs increasingly realize the ocean of creative ideas that remain
untapped and dormant. Tapping all these opportunities can result in improved financial
strategies, increased profitability, and quick decision making. Creativity also enables an
enterprise to stay ahead of the curve.
4.Transcend boundaries
Creativity enables entrepreneurs to find some of the path-breaking discoveries. As such, it’s
essential to allow collisions and blur to take place to transcend boundaries set by disciplines.
That way, it’s easier for an entrepreneur to get new perspectives towards solving a financial or
operational problem. Creativity lets an entrepreneur connect distinct aspects and extrapolate
feasible solutions from unrelated concepts.
5.Encourage critical thinking

Creativity is slowly turning out to be one of the best ways to alleviate problems plaguing today’s
enterprises. Problem-solving works best when coupled with highly disciplined and focused
thinking. Entrepreneurs can think in either divergent or convergent thinking mode. Convergent
thinking involves in-depth analysis and enables an entrepreneur to find the most feasible solution
to a managerial or financial problem.
It allows entrepreneurs to use various data sources such as accounting software and computer
systems. In contrast, divergent thinking encourages creativity by enabling business owners to
explore possible solutions for the same problem.
While entrepreneurs can combine both thinking modes, divergent thinking ensures an enterprise
gets the best resolution.
6.Foster innovation
Manufacturers create unique products to not only meet customer expectations but exceed them as
well. As such, entrepreneurs need to be cautious to ensure their products are relevant and useful
to the users. While it may be hard to spot this from the beginning, things start to get more evident
as your idea turns into a reality.
In fact, this is the time an entrepreneur begins to realize how innovation and invention differ. The
invention refers to a new, unique concept while innovation is an idea which is as unique and
useful as the original one.
You need to be creative and view an idea differently to be innovative. That way, it’s easier to
turn a concept into a reality.
CREATIVITY PROCESS
BASIC ELEMENTS OF THE CREATIVE PROCESS
The process of creating interesting ventures is inherently dynamic and versatile. There are many
aspects to the approach and the stages of the creative process. Some insight into the process is
given below
Step 1: Preparation
The first stage, of course, is the preparation of some basic ideas to hold onto. There has to be
some inspiration that “forces” or “prepares” the entrepreneur to move forward. The creative
process starts with identifying a problem and then researching for related information. This is
done in an effort to start looking for a viable solution. An entrepreneur looks in every direction to
solve the problem, be it inside the industry or outside.
Step 2: Thinking outside the box – going beyond the comfort zone

Can we achieve anything if we are not willing to go beyond our comfort zone? One has to leave
the comfortable arena, go beyond and take a risk. Rewards come with efforts.
“Thinking outside the box” is an expression that has been used in marketing, business and
psychology since the 1970s. It owes its origin to a “nine dot” game that was once used as a test
of creativity. The puzzle was designed such that the person had to go beyond the dots to find the
solution. However, psychologists say that this “external” factor is not really external, it is simply
the existing solution to the problem. “External” is only how our brain tends to perceive it.
Step 3: Creativity isn’t magic
Despite the immensely amazing things creativity can achieve, it is definitely not magical.
Creativity is simply approaching things with a different perspective. The simplest approach to
creative thinking can be copying different elements, transforming them, combining them and
eureka! There is a new idea. This essentially makes use of existing elements. As Kirby Ferguson
says, “It happens by applying ordinary tools of thought to existing materials. And the soil from
which we grow our creations is something we scorn and misunderstand even though it gives us
so much — and that’s… copying.”
Step 4: Incubation
During the incubation stage, ideas that have the potential to solve a problem tend to flourish.
This stage is characterized by the unconscious thought process of refining an idea. Apparently,
there are many activities at work during this stage, but the overall goal is to find a solution.
Evaluating existing projects can help to generate viable ideas. Some researchers even refer to the
creativity process as re-creativity since it takes inspiration from existing ideas and molds them in
an innovative way.
Step 5: Illumination
Incubation leads to clarity of ideas. This is the “solution finding” stage. Now the creativity
process leads to the knowledge of some practical ideas that can be put to work. It is like a “light
bulb” moment, hence it’s called illumination.
Step 6: Verification
This stage determines whether the “found” solution even has the potential to work or not. The
idea can either be accepted as such, modified with minor or major changes, or rejected
altogether, requiring that the whole process be done again.
Step 7: Critical thinking
Generating innovative ideas is a comparatively easy task. The major success of an

entrepreneurial endeavor lies in critically examining the viability of an idea. Critical thinking
enables an entrepreneur to self-judge in order to evaluate the idea. It is defined as a self-directed,
self-disciplined, self-monitored and self-corrective process of evaluating an idea.

No one else is aware of the aspects of the problem as well as the proposed solution like the
entrepreneur is. Therefore, a very honest opinion about the viability of the idea can come from
the entrepreneur himself.
Critical thinking offers many competitive advantages to the entrepreneur, such as:
1. It helps formulate the best possible idea.

2. It allows for exploring new horizons and seeing the big picture.
3. It enables the entrepreneur to evaluate and ask questions that have not been considered
previously.
4. It helps in taking decisive actions; the result of creativity.
Therefore, the process of creative thinking that starts with brainstorming “ends” at the critical
analysis of the idea’s viability. The resulting potentially viable ideas can lead to the creation of
actual entrepreneurial enterprises or improvement of the existing ones.
CREATIVITY TECHNIQUES
1. Mind Mapping
Let’s begin with a timeless classic. Mind mapping (aka brainstorming or spider diagrams) is the
little black dress of idea generation; it never goes out of fashion. It almost feels wrong to walk
into an agency and not see some form of mind map on a whiteboard somewhere.
The key to mind mapping is to take note of every idea that comes up. Don’t neglect anything, no
matter how far-fetched it may seem. Save the critical selection process for later. Generate as
many ideas as possible; the more you jot down, the bigger chance of finding that golden ticket
idea.
2. The Checklist
Young children are amazingly creative. Their curiosity, imagination and thirst for knowledge
seem boundless. They ask questions about everything, because practically everything is new to
them. If you’ve ever played the ‘Why?’ game with a kid, you’ll know exactly what I’m talking
about*. It’s infuriating, yet surprisingly enlightening.
As we get older, we tend to stop asking so many questions. We accept a lot more, because it’s all
been explained to us before. Perhaps it’s because of this, that adults are stereotypically perceived
as having very little imagination.
Maybe if we asked more questions, our content might be a little bit more imaginative. This is
where the checklist technique can help. This is essentially a list of questions which you should
ask yourself before beginning your work.
Alex Osborn, who is often coined as the father of brainstorming, established around 75 creative
questions to help encourage ideas in his fantastic book, Applied Imagination. It’s well worth a

read if you can get hold of it, but to give you a head start, there are six universal questions that
can be asked:
 Why?
 Where?
 When?
 Who?
 What?
 How?
Ask yourself these question (in some form) every time you create content, and chances are you’ll
come up with some pretty interesting answers.
3. Six Thinking Hats
(Disclaimer: This is a technique that could prove potentially confusing to all the SEOs out there,
as a few may be a bit weary at the prospect of wearing a black hat)
Developed by Edward de Bono in the early 80s, this popular technique is now used by
businesses all over the world. They involve putting on a selection of metaphorical hats when it
comes to making a decision. Each hat represents a different direction of thinking.
 White Hat – Facts

 Red Hat – Emotions
 Black Hat – Judgement, Caution
 Yellow Hat – Logic
 Green Hat – Creativity
 Blue Hat – Control
This method can be used in a group or on your own, and you may find yourself ‘wearing’ more
than one hat at once (Of course if you’re really bored you could always physically make the hats
for instant entertainment!). You can use the hats to take the ego out of the equation. They let you
think and decide on topics in a rational yet creative style.
4. Lateral Thinking
Another term coined by Dr. de Bono, this involves looking at your situation in a different way.
The simplest answer is not always right. We solve most problems in a linear fashion, i.e. if
something happens it must have been… because of….
We take a step by step approach to finding our answers. De Bono encouraged others to look at
their situation differently, to step sideways for a second if you will. This allows people to re-
examine their predicament from a much more creative point of view.
Say for example you have a client who sells tractors. If you were thinking in a linear fashion, you
may feel the need to create content about how great tractors are because you need to sell tractors.

Thinking about things laterally though opens up a world of possibilities. Try looking at the
bigger picture.Tractors are a key component to farming, farming produces food and resources.
Farms also house animals. A popular children’s rhyme about farm animals is Old McDonald,
you may wonder how that rhyme came to be. Why not create content around the origin of that
rhyme?
That’s just a (very) basic example, but you can clearly see how lateral thinking can be used to
help inspire you.
5. Random Word Generation
I love this technique. Simply pick two random words and try and tie your content to it in the
most imaginative way possible. Simple as that.
The real fun part is how you choose to come up with the words. You could use an online
generator; you could flick through a dictionary; or you could write words on a bunch of plastic
balls, throw them into the air, and then choose the words on the first two balls you catch. Have
fun.
6. Picture Association
If you’re truly stuck for ideas, perform an image search on your topic of choice, pick a random
photo. Work backwards from the picture, developing a story around how the photo was
taken.For example, if you see a picture of a dog looking up at the night sky, ask yourself what it
could be thinking. Is it a stargazing dog? Does that dog secretly long to be an astronaut? Perhaps
a story about a space dog would be awesome! In fact a space dog would make a great mascot for
any business so we could look at the best business mascots. So on so forth.This may be
considerably harder with stock photos, but characterise the people within the image and the more
imaginative of you out there will prevail to develop some fantastic ideas through this technique.
7. Change Perspective
This can often be hard to do, but try putting yourself in other people’s shoes. Sometimes you can
get too attached to your own work, I know I always do it. You may be too close to notice that
there are faults visible from afar.Share your ideas with others, and get a fresh pair of eyes to look
at your work. Encourage constructive criticism, you don’t have to take it all on board, but it may
offer up some seriously beneficial observations.
8. Get Up and Go Out

People underestimate the value of being bored. If you work around screens all day, if can often
prove both relaxing and rewarding to just get up and walk about for a bit. Let your mind wander
instead of focussing on a task so hard it hurts.

Take a walk around your local woods, indulge yourself in your own personal contemplation
montage as you skim rocks across a pond. Let the miracle of nature, and that brief moment of
what is hopefully peace and quiet, inspire and energise you.
Similarly, many believe that the practice of meditation, clearing their mind of all thoughts and
allowing themselves to be at peace, is a fantastic method to help spur creativity. Although I’ve
never personally tried it, I can see how people might find it rewarding.
9.FORCED ASSOCIATION METHOD
Forced Association is a powerful creative technique in which a series of random words are
forced into association with the topic under investigation. These artifically paired words are then
considered for creative possibilities.
To illustrate this, the problem might be how to improve the fortunes of a failing restaurant. Five
random words might be Toilet, Glue, Tulip, Cloud and Umbrella. Restaurant - Toilet could lead
to thinking about: advertising in local toilets (e.g. people in bars often go to the toilet as they are
leaving, with thoughts of visiting a restaurant); making the restaurant's toilets a selling point.
Restaurant - Glue could lead to: a special discount menu for anyone visiting more than once a
week; a promotion with special lapel stickers for kids. Normally you would chose at least ten
random words and then look for ten ideas from each of the ten pairings. The chances are that you
will generate at least five usable ideas.
10.Checklist method
Checklists help to generate ideas in a systematic way. Once a problem is identified, teams can
use checklists to explore all areas and issues that are associated with the problem. They help the
team think and are often in the form of questions. Many of the mapping tools, like 6M, are just
like checklists, encouraging you to be systematic in your approach.
The Checklist:
· Put to other uses?
· Adapt? Is there anything else like this? What does this tell you? Is the past comparable?
· Modify? Give it a new angle?
· Magnify? Can it be duplicated, multiplied or exaggerated?
· Minimize? Can anything be taken away? Made smaller? Lowered?
· Shortened? Lengthened? Omitted? Broken up?
· Substitute? Different ingredients used? Other material?

· Other processes? Other places? Other approachs? Other tone of voice? Someone else?
· Rearrange? Swap components? Alter the pattern, sequence or layout? Change the pace or
schedule? Transpose cause and effect?
· Reverse? Opposites? Backwards? Reverse roles?
11.CNB Method
Each participant is assigned the task of finding a solution for a problem over an open period. A
notebook (both is possible, an analogue or electronic notebook) is used which contains a
description of the problem on the first pages. The participants should always carry the note-book
with them in order to be able to record spontaneously emerging ideas.
APPROACH
1. The coordinator provides each participant with a notebook describing the procedure and
giving a broad problem statement.
2. Each participant writes one idea per day in the notebook for a month.
3. At regular intervals during the month, participants are fed with related ‘priming’
information from experts, the literature, colleagues, etc.
4. After the end of the open period, they provide a brief written summary.
5. The coordinator collects the notebooks, and categorizes and summarizes the ideas.
6. Participants can then see all the notebooks and the coordinator’s report, and there may be
a general group discussion. (Martin et al. 2010) The participants can also exchange their
notebooks during the implementation phase.
12.GORDON METHOD
he idea behind this problem-solving technique is to encourage you to step as far away from a
particular problem as possible. Developed by William Gordon (of Arthur D Little Consulting) in
the 1960s, it involves a process of progressively more detailed revelation, to avoid defining the
problem too soon and limiting possible solutions. He built this approach in response to a problem
he witnessed with classical brainstorming whereby people begin the process by giving what they
regard as ideal or obvious solutions and then their creativity trails away.
Purpose
The purpose of the technique is to bring you out of the immediate detail of a particular problem.
For example, instead of asking, “How do we get our audiences to spend another £2 each per
visit,” you might ask:
 “How do we make our audiences happy?”

 After exploring this question in a little more detail you might ask, “How can we provide
good customer service?”

 Once answers to that question have finished you would get more specific still, “What do
our audiences want from our programme/activities?”
 Finishing with your original question, “How do we get our audiences to spend another £2
each per visit?”
It is mainly a tool for group discussion to ensure you get as wide a range of perspectives as
possible, but you could try using it on your own with post-its and large sheets of paper for
doodling your answers. (You would have to suspend your knowledge of the final question
though!)
13.Single person method
14.Attribute listing method
List attributes
For the object or thing in question, list as many attributes as you can. Thus, for example, a
screwdriver has attributes of 'applies torque', 'metal shaft', etc.It can also be useful to first break
the object down into constituent parts and look at the attributes of each part in question. Thus
you may break the screwdriver into the handle, the shaft and the tip. The tip then has attributes of
'fits screw', 'thin blade', etc.
Consider value of attributes
For each attribute, ask 'what does this give'? Seek the real value of each attribute. It is also
possible that attributes have 'negative value' -- ie. they detract from the overall value of the
object.
For example, the handle of a screwdriver being examined has attributes of 'hexagonal' which
have the value of 'helps grip' and 'stops rolling on workbench', but has negative value of 'sharp
corners'.
Modify attributes
Finally look for ways in which you can modify the attributes in some way. Thus you can increase
value, decrease negative value or create new value.Thus, for example, you could modify the
attributes of the screwdriver handle to be 'comfortable grip' by adding a rubber sleeve.
PLANNING AND DEVELOPING A BUSINESS PLAN

A business plan is a formal written document containing business goals, the methods on how
these goals can be attained, and the time frame within which these goals need to be achieved. It
also describes the nature of the business, background information on the organization, the
organization's financial projections, and the strategies it intends to implement to achieve the

stated targets. In its entirety, this document serves as a road map that provides direction to the
business
Typical structure for a business plan for a start up venture

 cover page and table of contents
 executive summary
 mission statement
 business description
 business environment analysis
 SWOT analysis
 industry background
 competitor analysis
 market analysis
 marketing plan
 operations plan
 management summary
 financial plan
 attachments and milestones

UNIT-III
PLANNING AND EVALUATION OF PROJECT
Content: Growth of firm, Factor Inducing Growth, Project identification and

selection, project feasibility study, project planning and control,post planning
of project
WHAT IS PROJECT?
According to Nicholas, John M. (2001) some of the characteristics that warrant classifying an
activity as a project centers on the purpose, complexity, uniqueness, unfamiliarity, stake,
impermanence, and life cycle of the activity. Based on these features then project is defined as
follows:
 A project involves a single, definable purpose, end-item, or results, usually specified in
terms of costs, schedule, and performance requirements.
 Every project is unique, in that it requires doing something different than was done
previously.
 Projects are temporary activities.
 Projects cuts across organizational lines because they need the skills and talents from
multiple professionals and organizations.
 Projects involve unfamiliarity…. posses significant elements of uncertainty and risk.
 The organization has something at stake when doing a project.
 Finally, a project is the process of working to achieve a goal; during the process, projects
pass through several distinct phases, called the project life cycle.
PROJECT IDENTIFICATION
Project identification is the first step of any project cycle. Entrepreneurs need to identify and zero
in on a project that suits their requirements and can help them attain their goals before spending
significant time and resources on a project. Project Identification is the process of selecting a
theme to be further developed into a project concept. It outlines the location where the project
will occur, the broad approach the project will take and the problem (need) to be addressed.

They also need to study in detail the feasibility of the proposed project well before they start
planning the other steps of the project cycle. Usually various aspects are required to be studied
before picking a project.
PROJECT SELECTION
What is project selection

Project Selection is a process to assess each project idea and select the project with the highest
priority. Projects are still just suggestions at this stage, so the selection is often made based on
only brief descriptions of the project. As some projects will only be ideas, you may need to write
a brief description of each project before conducting the selection process.
Selection of projects is based on:

Benefits: A measure of the positive outcomes of the project. These are often described as "the
reasons why you are undertaking the project". The types of benefits of eradication projects
include:
 1.Biodiversity
 2.Economic
 3.Social and cultural
 4.Fulfilling commitments made as part of national, regional or international plans and
agreements.
Feasibility: A measure of the likelihood of the project being a success, i.e. achieving its
objectives. Projects vary greatly in complexity and risk. By considering feasibility when
selecting projects it means the easiest projects with the greatest benefits are given priority.
The benefits of completing the Project Selection are:

 1.a transparent and documented record of why a particular project was selected
 2.a priority order for projects, that takes into account their importance and how
achievable the project is
Who should in project selection?
Agency Management:
 1.Set selection criteria to ensure the selection process aligns with agency strategies.
 2.Selection processes are often run as a management initiative before the implementing
Project Manager is assigned.
Stakeholders:

 1.participation at the start of a project creates strong community ownership and support,
and increases the chances of a successful outcome.
 2.Stakeholder input should be included at the ideas stage; consult widely as you are
developing the ideas for projects as the community will be the source of many of the best
project ideas.
 3.Stakeholders must be informed of the outcome of the Project Selection Stage.
Project Manager:
Involving the Project Manager in the Project Selection process will help build ownership in the
project and support a successful project in the long run.
Methods of project selection
Method #1: Benefit Measurement Methods

The Benefit Measurement Methods are likely going to be the only methods you’ll be using
directly as a project manager. While less complex than the Constrained Optimization Methods,
they often don’t require an advanced degree in finance to be able to understand them.
They’re great for smaller projects that aren’t especially complicated.
Benefit Measurement Methods, as the name suggests, rate potential projects according to a
specific model and compare those results between the project candidates. Below are the most
common Benefit Measurement Methods you’ll be using as a PM.
1. Cost Benefit Ratio
The simplest of the Benefit Measurement Methods, the cost benefit ratio is an effective way of
communicating the potential value of a project in easily understandable terms. It measures the
costs of investing in a project against the value of the return once it is completed.
A project that requires $280,000 in resources to complete with an expected $420,000 return
would have a 4:6 (or 2:3) cost benefit ratio. Essentially, every $2 invested in this project would
yield $3 in revenue. Projects with a lower cost benefit ratio (or a higher benefit cost ratio) should
be selected if evaluated only by this method.
2. Economic Model
The Economic Model, also known as the Economic Value Added (EVA), is similar to the Cost
Benefit Ratio technique in that it describes the difference between costs invested and revenue
generated in one number – profit.
Investopedia aptly defines EVA as “net operating profit after tax – (invested capital X weighted
average cost of capital).” This model provides a clear representation of the quantifiable benefits

of a project once it’s completed and can help give you a solid idea of what kinds of returns to
expect for each project.
3. Payback Period
The Payback Period Technique takes a look at how long it will take your company to recoup its
expenses with a particular project. If our $280,000 project were to bring in $20,000 a year once
it’s completed, the total payback period would be 14 years.
It’s worth remembering though, that any time you try to factor in returns over time you should be
looking at the present dollar value of the future revenue as inflation and interest will all come
into play.
4. Discounted Cash Flow (DCF)
The Discounted Cash Flow Analysis handles the problem of calculating the present value of
future earned dollars. This is one of the best ways to calculate value of returns that occur over a
long period of time rather than immediately after completion.
While the Payback Period Model is easy to calculate and simple to understand, the Discounted
Cash Flow (DCF) model incorporates the time value of money. This concept helps translate
future earnings into present day dollar values since a dollar in hand has more earning potential
than one promised for later.
5. Net Present Value (NPV)

Using Discounted Cash Flow, the Net Present Value (NPV) model helps put the whole lifecycle
of the project into perspective in terms of earnings.
For instance, calculating the earnings for year one of the project may return a net loss of, say,
$800. Year two may see a loss of $200, while years three, four, and five may result in gains of
$500, $1000, and $1500. All of these values would of course be informed by the DCF concept to
translate future values into present dollars.
The Net Present Value of the project, then, would be the combination of all of these numbers
($3000 minus losses of $1000) and would equal $2000.
6. Scoring Models
Scoring Models may be the most flexible way of comparing projects to one another. Rather than
focusing purely on financials, Scoring Models let you determine which qualities of a project are
most important to you, your team, and your company at large.
You may, for example, choose to look at profitability, overall risk, support from stakeholders,
and difficulty of the project.

Once the criteria are chosen, you’ll want to weight them according to your priorities and rank
each project in terms of these four measures using a consistent scale. The total numbers for a
single project are then combined and used to reflect the project’s total value, making it easy to
compare your projects to one another.
7. Internal Rate of Return (IRR)

The Internal Rate of Return (IRR) incorporates the Net Present Value into its calculation by
setting the NPV to zero. Essentially, this means that all cash flow from a project (both negative
and positive) even each other out.
Using the same equation as NPV where the NPV is set to zero, the IRR of a project is determined
by solving for the variable “r” rather than NPV. If the Internal Rate of Return for a project is
lower than the company’s required rate of return (RRR), then that project can be eliminated
entirely.
8. Opportunity Cost
The concept of opportunity cost is crucial to understand for any certified project manager worth
their salt. Essentially, Opportunity Cost comes down to what you’re missing out on by choosing
one project over another.
More a supplemental technique than a standalone method itself, Opportunity Cost can be a great
way to put a certain project choice into perspective. If, for example, Project 1 and Project 2 are
worth $75,000 and $85,000 respectively, going with Project 1 would have an opportunity cost of
$10,000 since that’s how much your company would miss out on.
Method #2: Constrained Optimization Methods

While the Benefit Measurement Methods are generally the most widely used Project Selection
methods for project managers, Constrained Optimization Methods may also come into play.
These methods are great for larger, more complex projects where a number of intricate
mathematical calculations will need to be performed.
In fact, the Constrained Optimization Methods are also known as the Mathematical Model of
Project Selection.
Given their complexity though, many project managers will likely choose the Benefit
Measurement methods to meet their Project Selection needs. What’s more, the Constrained
Optimization Methods are not covered in-depth in the PMP certification exam but are provided
here for supplementary purposes only.
For more information on the methods below, Testing Brain provides quite a comprehensive look
at each.

1. Linear Programming
This programming method involves bringing down the cost of the project through reduction of
the time required to complete it.
2. Nonlinear Programming
Nonlinear Programming aims at solving optimization problems within projects wherein some of
the constraints or functions are nonlinear.
3. Integer Programming
This method focuses on integer values rather than fractional ones. Some products, like tables for
example, can never be fractional.
4. Dynamic Programming
This method involves simplifying a complex problem by separating it into a number of simpler
problems.
5. Multiple Objective Programming

The Multiple Objective Programming approach focuses on making a decision for a number of
problems using mathematical optimization.
PROJECT PLANNING
Definition
Project planning involves a series of steps that determine how to achieve a particular community
or organizational goal or set of related goals. This goal can be identified in a community plan or
a strategic plan. Project plans can also be based on community goals or action strategies
developed through community meetings and gatherings, tribal council or board meetings, or
other planning processes.
The project planning phase is often the most challenging phase for a project manager, as you
need to make an educated guess about the staff, resources, and equipment needed to complete
your project. You may also need to plan your communications and procurement activities, as
well as contract any third-party suppliers.
The purpose of the project planning phase is to:
 Establish business requirements

 Establish cost, schedule, list of deliverables, and delivery dates
 Establish resources plans
 Obtain management approval and proceed to the next phase

Why is project planning important?
Project Planning helps us to:

 Planning helps to eliminate:
 Think ahead and prepare for the future
 Goals and develop a vision
 Identify issues that will need to be addressed
 Choose between options
 Consider whether a project is possible
 Make the best use of resources
 .Motivate staff and the community
 Assign resources and responsibilities
 Achieve the best results
planning helps to eliminate

 Poor planning
 Overambitious projects
 Unsustainable projects
 Undefined problems
 Unstructured project work plans
The basic processes of project planning are:

 Scope planning – specifying the in-scope requirements for the project to facilitate
creating the work breakdown structure
 Preparation of the work breakdown structure – spelling out the breakdown of the
project into tasks and sub-tasks
 Project schedule development – listing the entire schedule of the activities and detailing
their sequence of implementation
 .Resource planning – indicating who will do what work, at which time, and if any
special skills are needed to accomplish the project tasks
 Budget planning – specifying the budgeted cost to be incurred at the completion of the
project
 Procurement planning – focusing on vendors outside your company and subcontracting
 Risk management – planning for possible risks and considering optional contingency
plans and mitigation strategies
 Quality planning – assessing quality criteria to be used for the project
 Communication planning – designing the communication strategy with all project
stakeholders
SMART rule to articulating the project objectives

 Specific – get into the details. Objectives should be specific and written in clear, concise,
and understandable terms.

 Measurable – use quantitative language. You need to know when you have successfully
completed the task.
 Acceptable – agreed with the stakeholders.
 Realistic – in terms of achievement. Objectives that are impossible to accomplish are not
realistic and not attainable. Objectives must be centered in reality.
 Time based – deadlines not durations. Objectives should have a time frame with an end
date assigned to them..
How to plan a Project?

Coordinated to perfection, transparent, schedule specific and accurate, a well-developed project
plan will go a long way in making your project reach its completion in good time. Here are the
essential 10 steps for creating a project plan.
Step 1: Discussion of plan and key components with stakeholders
Often misunderstood across the life of a project, a project plan comprises of living documents
that can be expected to keep changing in some way or the other. It offers direction to all those
involved in the project, directly or indirectly. This roadmap sets the overall course for the
project. It also guides all team members accordingly. Here, a common ambiguity relates to the
equating of the project plan to the project timeframe that happens to be just a singular component
of the same. But now, as we already are aware Project management plan itself is also a subset of
project plan.
Generally, the key stakeholders of any project are those who are likely to be impacted by the
project development flow and its end. They fail to comprehend the underlying nature of such
project plans. Gaining commitment and buying happens to be the primary and most fundamental
aspects of project management. All key stakeholders need to gain knowledge about the project
plan and planning processes. This enables them to be in a position of reviewing and approving
the documents pertaining to them. Hence, Planning Stakeholder engagement finds its way to
project success.
Project Planning Components
Project Charter
A formal document, which outlines the purpose and objectives to carry out the project. It
provides a preliminary delineation of roles and responsibilities and project goals. It also
identifies main stakeholders, and sets project milestones in a broad way. It serves as a reference
of authority for the future of the project.

Baselines
Also referred to as performance measures (as the overall performance of any given project is
measured against them). Baselines include the three starting points of a project: schedule, scope
and costs. They are useful for measuring whether the project is on the right track, or not.
Baseline Management Plans
Baseline Management Plans encompass documentation pertaining to the ways in which

variances to given baselines are to be reviewed and managed across the project. They outline the
steps to be followed in case of baseline variances, the exact processes that need to be initiated, a
list of those to be notified, funding of changes, and so forth.The other work products linked to
the project plan and part of project management plan include a quality plan, risk management
plan, procurement plan, and communications plan.
Step 2: Definition of all responsibilities and roles

The project documents are unlikely to be reviewed by all key stakeholders. So it becomes
important to assess all those people who’ll be needed for approving different parts of the project
plan. These include:
 The project sponsors who are the owners of and will be funding the project. It is essential
that they review and approve the different aspects of the project plan.
 There are designated business experts whose requirements have to be adhered to with
regards to the end product. These stakeholders have an important role to play in
developing the scope baseline. They also approve all documents related to the same.
They usually showcase their interest in project timelines as well.
 Project managers are responsible for creating, executing, and controlling the overall
project plan. As they are involved in building the plan, their approval is not required. The
3 levels of skill sets defined by PMI for Project managers include Technical, Strategic &
Business management and leadership.
 Teams responsible for building the end product will be participating in the development
of several aspects of the project plan. These aspects are assessment of quality, risks, and
design issues.
 The end users who will be using the final product may have a role to play in the
development and review of the plan. They are seldom required for signing it off.
 The other key stakeholders include procurement specialists, quality/ risk analysts,
auditors, etc. They are needed for gaining approval on specific parts of the project plan
pertaining to them.
Step 3: Holding of the kick-off meeting

It is an effective means for bringing key stakeholders together for discussing the project. A kick-
off meeting initiates the planning process. It is also useful for building trust among all team
members. The ideas of all members need to be taken into account during kick-off meetings. This

also demonstrates the sponsor’s commitment for the project. The topics forming the agenda of
such a meeting include:
 Project vision (sponsor)

 Business vision / strategy (sponsor)
 Team building
 Delegation of roles and responsibilities
 Decision making processes
 Team commitments
 Size of groups and sub-groups, if any
 Ground rules
Kick off meeting should be held in such a way so that everybody get awareness about the
deliverables expected from them. It should also ensure that the project earns its necessary buy in
leading to success.
Step 4: Development of the Scope Statement

It is one of the most important documents relevant to the project plan. The Scope Statement lays
down the foundation for all aspects of the project. It serves as a description of the project and its
outcomes. It is used for getting the common agreement of all stakeholders with regards to the
scope. It is also useful for gaining buy-ins and agreements from all stakeholders and sponsors. It
also decreases the probability of miscommunication to a large extent. The Scope Statement is
likely to change and grow as the project proceeds, and includes:
 Business problems and needs

 Project objectives
 Project justification and the advantages of completing the project in time
 Project scope and deliverables
 Approach, key milestones, and all those components that are likely to be influenced by
the nature and size of the project.
Step 5: Development of Scope Baseline

Post the confirmation of deliverables in the Scope Statement, a work breakdown structure (WBS)
needs to be developed as a part of project management plan. It is typically a decomposition of
different deliverables in a given project.
The WBS serves as the scope baseline with three significant elements in place; these are:
 WBS identifies the different project deliverables and all the work that needs to be done.
 Breaks down large deliverables into a hierarchy of small-sized deliverables.
 The "work package" or the lowest level is numbered corresponding with different
activities and tasks.

Step 6: Development of cost baselines and schedules
The various sub-steps for developing cost baselines and schedules are:
 Identification of all activities and tasks that are needed for producing each work package,
or creating WBS of tasks.
 Identification of resources for all tasks, if known.
 An estimation of the timeline required for each task completion.
 Estimation of the costs involved with each task by using average hourly rates for
individual resources.
 Consideration of resource constraints, or the period for each resource that can be
realistically devoted to a specific project.
 Determination of the inter-dependency of tasks and the development of critical paths.
 Development of schedules for required estimates and tasks.
 Depiction of chosen time periods about all resources. Which resource is doing what task,
the amount of time expected to be spent on each task, and the time when the tasks are to
begin and end.
 Development of the cost baselines as time-phased budgets, or determination of cost by its
time period.
This process is subject to changes and steps are likely to be added or repeated.
Step 7: Creation of Baseline Management Plans

After establishing the scope, schedules, and all cost baselines, the steps for managing variances
to all plans need to be documented. The management plans would generally require a review and
approval procedure for modifying baselines. Here, diverse approval levels are necessary for
including different kinds of changes. Additionally, it must be known that all new requests will
not lead to changes in the schedule, scope, or budget.
Step 8: Development of the resource plan

Clearly depicting the time periods when each resource would be coming in or leaving the project.
The resource plan is a typically a chart similar to most project management charts such as a
Gantt chart. However, it does not show begin/end dates, estimates, tasks, or the critical path. It
reveals the resource, and the period of time that it may remain on the project. It also emphasizes
on controlling the resources.
Step 9: Analysis of project risks and quality
These two consist of essential parts of project management plan and make project a success
Project Risks
A risk impacts the outcome of any project significantly. The analysis of risks incorporates a
determination and quantification of the impact and probability of a specific event taking place.
This enables project managers to assess and monitor which risks require attention. It also helps
them develop risk management plans for understanding and communicating how diverse teams
would need to react to high-risk events. It also helps to implement risk responses. Also, Risk
Response Strategy gives leverage to Project manager to Escalate any positive or negative risk , if
it is beyond his scope.
Here are some examples of common project risks:
 Time and cost estimate too optimistic

 Customer review and feedback cycle too slow
 Unexpected budget cuts
 Unclear roles and responsibilities
 No stakeholder input obtained
 Not clearly understanding stakeholder needs
 Stakeholders changing requirements after the project has started
 Stakeholders adding new requirements after the project has started
 Poor communication resulting in misunderstandings, quality problems and rework
 Lack of resource commitment
Project Quality
It ensures that all end products meet customer specifications. Project quality also determines
what key business experts want to use. Project quality lays emphasis on preventing errors. This
step does not wait to inspect the product after the project ends, and then eliminate errors. Instead,
it recognizes that quality serves to be the management’s responsibility and has to be performed
across the project. Creation of the Quality Plan incorporates the setting of acceptance criteria,
standards, and metrics that will be put to use across the project. Its forms the base for all reviews
and inspections that will be used at all stages of project execution.
Step 10: Communication for Success
The Communications Plan states:
 Which project member of key stakeholder wants which reports, in what format, how
often, and by using which specific media?
 The ways in which issues will be escalated, and their time frames.
 The place where project information needs to be stored and information about who may
access the same.

PROJECT CONTROLS
Definition
Control is a method or mechanism used as a standard rule or procedure that is to guide, check,
verify or audit the operation of actions or behavior.
Project Control is a work process of the developing plans, measuring the actual performance,
and creating reports for the project schedule, cost and resources by data gathering, status
analysing, comparing actual performance with planned, and communicating with project teams
to support right and effective decision making. The Project Controls need a forecasting ability,
developing corrective action, and change management.
Project Controls is a professional function not widely recognised as a set of specialised skills in
its own right. It is a function that is critical to achieving successful project and programme
outcomes i.e. delivering required benefits to cost, time and performance. For the purposes of this
portal, the field of project controls is defined as follows:
"Project Controls are the data gathering, data management and analytical processes used to
predict, understand and constructively influence the time and cost outcomes of a project or
programme; through the communication of information in formats that assist effective
management and decision making."
Importance of project control

 Developing your project strategy; defining methods that will enhance the future PM
software use and project outcomes
 Development, updates, and maintenance scheduling for the PM software
 Estimating project costs; engineering and controlling costs and assessing project value
 Managing risks; assessing and analyzing project risks, and cataloging past risks and how
to avoid future risks
 Earned schedule and earned value management, including both work and organizational
breakdown structures
 Controlling project documentation
 Diagnosing project scheduling and costs with forensic assessment procedures
 Oversight and quality assessment of supplied materials
 Comprehensive integration of the elements of control and other domains of project
management
Elements of Project Controls.

Depending upon how Project Controls is viewed will influence what is considered as the

component parts of the function. Here it is assumed that project controls is concerned with
estimating initial baseline performance metrics, determining the current status of the project,
estimating future potential of the project, identifying any variances (baseline to current position
and baseline to potential future position), and considering appropriate action to be taken to
recover any positive variance. Here variance refers to actual differences identified in project
control documents and also the potential variations possible from project threats, issues and
opportunities. On this basis the component elements of Project Controls are to do with measuring
and monitoring controlling variables, these are principally time and cost aspects:
 Planning and Scheduling

 Risk Management (includes identification & assessment)
 Cost estimating and management
 Scope and Change Management
 Earned Value Management
 Document Control
 Supplier Performance
 Maintaining the project baseline
 Reporting
Steps of project control
1.Hold Meetings
The objective of conducting meetings during the course of a project is to assemble and manage
an effective project team that is able to accomplish defined goals and objectives. At a meeting
the project manager should provide an overview of work at the moment, describe current goals
and issues, and establish effective communications with the team. Conducting a meeting enables
a project manager to accomplish these tasks important to the control process:
 Review and (re)assign roles and responsibilities of the team

 Provide executive direction of the project to the team
 Notify of current status of project work, including open issues
 Provide guidance to the team
 Make executable decisions regarding further actions throughout the project
 Establish and review success criteria
2.Perform Quality Control

By controlling project quality it is possible to confirm that the product is complete and developed
in line with expectations. Quality control involves business and technical staff in a range of
activities such as defining technical standards, setting business expectations, establishing product
requirements, others.
Quality control starts when a project is initiated and lasts throughout the entire project lifecycle
until the product is developed and handed over to the customer. It aims to ensure that activities

and tasks at any given stage of the lifecycle can be signed off so that the project can continue
developing. Here’s a list of the key tasks a project manager needs to perform to control quality:
 Create a quality review schedule that defines timing for controlling a given stage
 Develop an agenda that determines key tasks of people involved in the control process
 Assign reviewers who will perform stage quality control, including stage objectives,
products, commitments, roles, responsibilities etc.
 Allocate other roles such as Facilitator (who ensures adherence to the agenda and
appropriate follow-up) and Author (who provides all necessary information and takes
approved corrective actions after the control process finishes)
 Document and record all actions and decisions taken throughout the control process
 Ensure that appropriate follow-up actions are taken
 Notify stakeholders of project status after the control process is done
3.Track Work Progress

This step in controlling a project refers to monitoring, measuring and controlling progress on the
project. The purpose is to ensure that project work is being done as scheduled. The project
manager needs to track work progress at any given stage to make sure the project goes towards
right direction. Please read this article about reviewing project state to learn more.
Here’re the key steps a project manager should take to track progress and ensure effective project
control:
 Capture task performance data including actual start/finish date for tasks, planned/actual
work effort (in hours), latest estimated duration (in hours) to complete the tasks, others
 Update the schedule with the actual task performance data
 Estimate remaining costs and update the cost estimates with actual costs incurred during
a selected period
 Capture any non-staff costs incurred
 Consider re-planning work for a given stage in terms of the updates made to the schedule
and cost estimates
 Adjust staff availability and consider making re-assignments
 Involve additional resources if needed
 Measure team performance and determine issues that cause lower performance
 Provide motivation to personnel during team status meetings
 Take corrective actions to eliminate performance issues
4.Respond to Changes
The goal of controlling changes is to define and implement the addition of work into a given
stage. By effectively responding to changes the project manager is able to ensure that the scope,
schedule and cost remain relevant to current situation.

Here’s a general to-do list a project manager needs to complete when requesting and responding
to changes:
 Receive and review change requests which provide a description of the proposed change
with priority
 Assign change requests to competent team members who must investigate alternative
solutions
 Review and approve/cancel alternative solutions and then update change requests
accordingly
 Approve updated change requests
 Create an action plan for implementing the changes
 Define implementation time for each change
 Monitor progress and quality on the changes
 Enables the changes to completed products
5.Manage Issues
As a process, issue management aims to resolve any issues affecting the success of a project. This
process takes a range of steps which are to identify issues, asses their impact, develop resolution
actions, take those actions and track progress on issues.
A project manager needs to manage issues in order to ensure that the project is carried out as
planned. Here’re broad tasks the manager can do to manage issues:
 Identify and record issues affecting the project

 Create an issue log that specifies the issues including their description, type, priority,
assigned personnel, status, etc.
 Assess impact of the issues on the scope, schedule and cost
 Determine how the issues might be resolved
 Review, correct and accept recommendations regarding managing the issues
 Execute the resolution
 Monitor progress on issues
Techniques of project control
1.Conducting meeting
Conducting Daily Team Meetings: As the name implies, this activity involves having a project
huddle in which team members give a status update of their tasks. Daily team meetings also
involve identifying dependencies and risks to the assigned tasks. Capturing meeting notes is
critical to ensuring next steps and key decision are taken. You can also use this platform to
determine team conflicts, gauge team motivation, and identify the slackers.
Conducting Project Health Meetings: These meetings involve the larger team since many
projects are broken into subprojects, intra-project dependencies are analyzed. Various factors are

used to access the project health. For example, you can use earned value analysis, team
motivation, and client satisfaction.
Conducting Retrospectives: These meetings are generally held after a release or after project
completion. Strictly speaking, retrospectives are not a project controlling technique. However,
their value in controlling a project is critical to ensuring continuous learning throughout the
project. Therefore, I recommend conducting retrospectives during the release and not leaving it
till the end. The lessons learned can then be implemented proactively while delivering the
release.
2.Using Earned Value Analysis
Project control techniques that pertain to measurement of project performance include earned
value analysis. Earned value analysis is a technique that enables you to quantify project progress.
Earned value analysis has some key indices, such as Cost Performance Index (CPI) and Schedule
Performance Index (SPI). For example, if the values of CPI and SPI in your project are under
one, this indicates the project is over-budget and will come in late. You can then take action to
get the project back on track. Therefore, it is critical for you to keep an eye on the earned value
indices. Similarly, you can use project cost and schedule variance.
3.Using Critical Path Analysis

Every project has a critical path. If any activity on the critical path is delayed, the project
completion date is directly impacted. Therefore, monitoring and controlling activities on the
critical path is more important than doing so with other activities. The project control techniques
you employ must always include the activities on the critical path
Component Elements of Project Controls.

Depending upon how Project Controls is viewed will influence what is considered as the
component parts of the function. Here it is assumed that project controls is concerned with
estimating initial baseline performance metrics, determining the current status of the project,
estimating future potential of the project, identifying any variances (baseline to current position
and baseline to potential future position), and considering appropriate action to be taken to
recover any positive variance. Here variance refers to actual differences identified in project
control documents and also the potential variations possible from project threats, issues and
opportunities. On this basis the component elements of Project Controls are to do with measuring
and monitoring controlling variables, these are principally time and cost aspects:
 Planning and Scheduling

 Risk Management (includes identification & assessment)
 Cost estimating and management
 Scope and Change Management
 Earned Value Management
 Document Control
 Supplier Performance

 Maintaining the project baseline
 Reporting
This is not an exhaustive list of all attributes of project controls, we believe it encompasses the
key important ones.
PROJECT FEASIBILITY STUDY
What is a Feasibility Study

A feasibility study is an analysis used in measuring the ability and likelihood to complete a
project successfully including all relevant factors. It must account for factors that affect it such as
economic, technological, legal and scheduling factors. Project managers use feasibility studies to
determine potential positive and negative outcomes of a project before investing a considerable
amount of time and money into it.
Definition
A project feasibility study is a comprehensive report that examines in detail the five frames of
analysis of a given project. It also takes into consideration its four Ps, its risks and POVs(Points
of Vulnerability: ) and its constraints (calendar, costs, and norms of quality). The goal is to
determine whether the project should go ahead, be redesigned, or else abandoned altogether
Importance of Feasibility Studies
Feasibility studies allow companies to determine and organize all the details to make a business
work. A feasibility study helps identify logistical problems, and nearly all business-related
problems and their solutions. Feasibility studies can also lead to the development of marketing
strategies that convince investors or a bank that investing in the business is a wise choice.
When should we do a feasibility study of a project?

It happens during various stages of the project:
 Before submitting the response to the Proposal / Bid / Quotation / Tender Notice of the
project.
 Before the initiation of the Project.
 While deciding to make or buy the product, services, and results.
Areas of Project Feasibility
1.Technical feasibility

This assessment is based on an outline design of system requirements, to determine whether the
company has the technical expertise to handle completion of the project.When writing a
feasibility report, the following should be taken to consideration:
 A brief description of the business to assess more possible factors which could affect the
study
 The part of the business being examined
 The human and economic factor
 The possible solutions to the problem
The technical feasibility assessment is focused on gaining an understanding of the present

technical resources of the organization and their applicability to the expected needs of the
proposed system. It is an evaluation of the hardware and software and how it meets the need of
the proposed system
Method of production
The selection among a number of methods to produce the same commodity should be undertaken
first. Factors that make one method being preferred to other method in agricultural projects are
the following:
 Availability of inputs or raw materials and their quality and prices.

 Availability of markets for outputs of each method and the expected prices for these
outputs.
 Various efficiency factors such as the expected increase in one additional unit of fertilizer
or productivity of a specified crop per one dunum.
Production technique
After we determine the appropriate method of production of a commodity, it is necessary to look

for the optimal technique to produce this commodity.
Project requirements
Once the method of production and its technique are determined, technical people have to
determine the projects' requirements during the investment and operating periods. These include:
 Determination of tools and equipment needed for the project such as drinkers and feeders
or pumps or pipes …etc.
 Determination of projects' requirements of constructions such as buildings, storage, and
roads …etc. in addition to internal designs for these requirements.
 Determination of projects' requirements of skilled and unskilled labor and managerial and
financial labor.
 Determination of construction period concerning the costs of designs and consultations
and the costs of constructions and other tools.

 Determination of minimum storage of inputs, cash money to cope with operating and
contingency costs.
Project location
The most important factors that determine the selection of project location are the following:
1. Availability of land (proper acreage and reasonable costs).

2. The impact of the project on the environment and the approval of the concerned
institutions for license.
3. The costs of transporting inputs and outputs to the project's location (i.e., the distance
from the markets).
4. Availability of various services related to the project such as availability of extension
services or veterinary or water or electricity or good roads ...etc.
2.Economic Feasibility - this assessment typically involves a cost/ benefits analysis of the
project, helping organizations determine the viability, cost, and benefits associated with a project
before financial resources are allocated. It also serves as an independent project assessment and
enhances project credibility—helping decision makers determine the positive economic benefits
to the organization that the proposed project will provide.
3.Operational feasibility-Operational feasibility is the measure of how well a proposed

system solves the problems, and takes advantage of the opportunities identified during scope
definition and how it satisfies the requirements identified in the requirements analysis phase of
system development.
The operational feasibility assessment focuses on the degree to which the proposed development
project fits in with the existing business environment and objectives with regard to development
schedule, delivery date, corporate culture and existing business processes.
4.Legal Feasibility - this assessment investigates whether any aspect of the proposed project
conflicts with legal requirements like zoning laws, data protection acts, or social media laws.
Let’s say an organization wants to construct a new office building in a specific location. A
feasibility study might reveal the organization’s ideal location isn’t zoned for that type of
business. That organization has just saved considerable time and effort by learning that their
project was not feasible right from the beginning.
5.Time /schedule feasibility-
A time feasibility study will take into account the period in which the project is going to take
upto its completion. A project will fail if it takes too long to be completed before it is useful.
Typically this means estimating how long the system will take to develop, and if it can be
completed in a given time period using some methods like payback period. Time feasibility is a
measure of how reasonable the project timetable is. Given our technical expertise, are the project
deadlines reasonable? Some projects are initiated with specific deadlines. It is necessary to
determine whether the deadlines are mandatory or desirable.

6.Resource feasibility-
Describe how much time is available to build the new system, when it can be built, whether it
interferes with normal business operations, type and amount of resources required, dependencies,
and developmental procedures with company revenue prospectus.
7.Financial feasibility-
In case of a new project, financial viability can be judged on the following parameters:
 Total estimated cost of the project

 Financing of the project in terms of its capital structure, debt to equity ratio and
promoter's share of total cost
 Existing investment by the promoter in any other business
 Projected cash flow and profitability
The financial viability of a project should provide the following information:[12]
 Full details of the assets to be financed and how liquid those assets are.
 Rate of conversion to cash-liquidity (i.e., how easily the various assets can be converted
to cash).
 Project's funding potential and repayment terms.
 Sensitivity in the repayments capability to the following factors:
o Mild slowing of sales.

o Acute reduction/slowing of sales.
o Small increase in cost.
o Large increase in cost.
o Adverse economic conditions
Benefits of Conducting a Feasibility Study

Below are some key benefits of conducting a feasibility study:
 Improves project teams’ focus

 Identifies new opportunities
 Provides valuable information for a “go/no-go” decision
 Narrows the business alternatives
 Identifies a valid reason to undertake the project
 Enhances the success rate by evaluating multiple parameters
 Aids decision-making on the project
 Identifies reasons not to proceed
When these areas have all been examined, the feasibility study helps identify any constraints the
proposed project may face, including:

1. Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
2. Internal Corporate Constraints: Financial, Marketing, Export, etc.
3. External Constraints: Logistics, Environment, Laws and Regulations, etc.
STEPS FOR FEASIBILITY STUDY
Step One: Conduct a Preliminary Analysis

The primary purpose of the preliminary analysis is to screen project ideas before extensive time,
effort, and money are invested. Two sets of activities are involved.
1.Describe or outline as specifically as possible the planned services, target markets, and unique
characteristics of the services by answering these questions:
 Does the practice serve a currently unserved need? (e.g., multicultural populations or
age groups who are not currently being served)
 Does the practice serve an existing market in which demand exceeds supply?
 Can the practice successfully compete with existing practices because of an
"advantageous situation," such as better design, price, location, or availability (e.g., balance
assessment and rehabilitation, programmable devices)?
2.Determine whether there are any insurmountable obstacles. A "yes" response to the following
indicates that the idea has little chance for success:
 Are capital requirements for entry or continuing operations unavailable or

unaffordable?
 Do any factors prevent effective marketing to any or all referral sources?
If the information gathered so far indicates that the idea has potential, then continue with a
detailed feasibility study.
Step Two: Prepare a Projected Income Statement
Anticipated income must cover direct and indirect costs, taking into account the expected income
growth curve. Working backward from the anticipated income, the revenue necessary to generate
that income can be derived in order to build a projected income statement.
Factors that determine this statement are services provided, fees for services, volume of services,
and adjustments to revenues (e.g., actual reimbursement levels).
Step Three: Conduct a Market Survey

A good market survey is crucial. If the planner cannot perform this survey, an outside firm
should be hired. The primary objective of a market survey is a realistic projection of revenues.
The major steps include:

 Define the geographic influence on the market.
 Review population trends, demographic features, cultural factors, and purchasing power
in the community.
 Analyze competing services in the community to determine their major strengths and
weaknesses. Factors to consider include pricing, product lines, sources of referral,
location, promotional activities, quality of service, consumer loyalty and satisfaction, and
sales.
 Determine total volume in the market area and estimate expected market share.
 Estimate market expansion opportunities (e.g., responsiveness to new/enhanced services).
Step Four: Plan Business Organization and Operations

At this point, the organization and operations of the business should be planned in sufficient
depth to determine the technical feasibility and costs involved in start-up, fixed investment, and
operations. Extensive effort is necessary to develop detailed plans for:
 Equipment
 Merchandising methods
 Facility location and design (or layout)
 Availability and cost of personnel
 Supply availability (e.g., vendors, pricing schedules. exclusive or franchised products)
 Overhead (e.g., utilities, taxes, insurance)
Step Five: Prepare an Opening Day Balance Sheet

The Opening Day Balance Sheet should reflect the practice's assets and liabilities as accurately
as possible at the time the practice begins, before the practice generates income.
Prepare a list of assets required for practice operations. The list should include item, source, cost,
and available financing methods. Necessary assets include everything from cash necessary for
working capital to buildings and land. Although the resulting list is rather simple, the amount of
effort required may be extensive.
Liabilities to be incurred and the investment required by the practice must also be clarified.
These items need to be considered:
 Whether to lease or buy land, buildings, and equipment

 How to finance asset purchases
 How to finance accounts receivable
Step Six: Review and Analyze All Data
This review is crucial. The planner should determine if any data or analysis performed should
change any of the preceding analyses. Basically, taking this step means "Step back and reflect
one more time."

 Reexamine the Projected Income Statement and compare with the list of desired assets
and the Opening Day Balance Sheet. Given all expenses and liabilities, does the Income
Statement reflect realistic expectations?
 Analyze risk and contingencies. Consider the likelihood of significant changes in the
current market that could alter projections.
Step Seven: Make "Go/No Go" Decision

All the preceding steps have been aimed at providing data and analysis for the "go/no go"
decision. If the analysis indicates that the business should yield at least the desired minimum
income and has growth potential, a "go" decision is appropriate. Anything less mandates a "no
go" decision. Additional considerations include:
 Is there a commitment to make the necessary sacrifices in time, effort and money?
 Will the activity satisfy long-term aspirations?

UNIT-IV
SMALL AND MICRO ETREPRISES
Content: Concept, definition and importance of SME, Growth and growth

strategies, Sickness in small business and remedies, Small entrepreneur in
international business
GROWTH AND GROWTH STRATEGIES
Meaning of Growth
Business Growth is a stage where the business reaches the point for expansion and seeks additional
options to generate more profit. Business growth is a function of the business lifecycle, industry
growth trends, and the owners desire for equity value creation.
Objective of growth
There are many reasons why growing your business may be the right decision. The reasons that
apply to your business will dictate the path your growth takes. Therefore it’s extremely important to
fully understand your motivations.
1.Profit motive:
A larger turnover can also mean a greater potential for profit. With the profit margin improvements
that economies of scale can provide, many growing businesses see their profits increase alongside
their operations.
 Businesses grow to achieve higher profits and provide better returns for shareholders
 The return to shareholders might be a combination of a rising share price allied with a share of
profits via dividend payments.
 The stock market valuation of a firm is influenced by expectations of future sales and profit
streams so if a company achieves disappointing growth figures, this can be reflected in a fall in
the share price. This opens up the risk of a hostile take-over and also makes it more expensive
for a quoted company to raise fresh capital by issuing new shares
2.Cost motive:
Economies of scale in the long run increase the productive capacity of the business whilst also
leading to lower average costs (LRAC). Experiencing economies of scale help a business to raise
their profit margins at a given market price

3.Market power motive:
 Firms may wish to increase market dominance giving them increased pricing power
 This market power can also be used as a barrier to the entry of new businesses in the long run
 Larger businesses can build and take advantage of buying power (also known as monopsony
power)
4.Risk motive:
 Growth might be motivated by a desire to diversify production and/or sales so that falling sales
in one market might be compensated by stronger demand in another sector.
 This is known as achieving economies of scope and is a feature of conglomerates
5.Managerial motives: Behavioural theories of the firm predict that business expansion might be
accelerated by the demands of senior and middle managers whose objectives differ from major
shareholders. Managers may want the power and kudos that comes from running larger corporations.
6.Respond to market demand
You’ve conducted in-depth market analysis and know that your product or service is well-suited to
the needs of the current market. Your analysis has shown that the market is large and concentrated
enough to want enough of your product at the price you need to sustain your growth aspirations.
In this situation, expanding into other locations, and taking on extra staff will allow you to build on
your current success. You can increase your market share, and capitalize on your growing brand
equity to potentially become market leader.
7.Competition and Innovation
If you’re looking to stay within your existing market, a move to a larger premises or additional
locations may increase your production capacity and help you drive away your competitors.
Growth can also take the form of innovation. Investing in the redevelopment or enhancement of your
offering can differentiate you from your competitors and increase your chances of continued success.
Growing your business helps to establish a stronger brand identity, further helping to stave off
competition. Franchising, licensing your products and services or expanding into carefully chosen
new product areas allows you to spread your brand. As the number of locations and products
increases, your brand identity develops, and your revenue grows.
8.Increase stability
As businesses grow, they tend to become more stable. A one person business with limited streams of
revenue is much less stable than a business with multiple locations and dozens of people on staff.

This stability is also partly due to the way your business is perceived. As your business grows,
people believe that you are more likely to be around throughout the lives of their products to supply
spare parts and honor guarantees. If you grow your business you are likely to sell more products and
services to this market segment.
9. People
Finding the right people to help you run your business is crucial, and a challenge for many business
owners. Growing businesses tend to attract the best people. The opportunities and challenges that a
successful, growing company can provide for their staff make them very attractive. Being a part of a
growing business is often an invigorating and professionally fulfilling experience.
Also, once your business has reached the point where you are delegating management and
operational decisions to others, the business no longer has to depend on you. This allows you more
time to dedicate to personal pursuits.
What will happen without Growth

 Your earnings will stay about the same, if they don’t shrink
 You won’t be able to pay your employees more
 You won’t be able to help your customers with innovative products and services
 You won’t create additional jobs
 You won’t be able to provide more for the families of people in your organization
 You’ll lose great employees who want to grow
 Your competition will grow
 You might be left behind in your industry
 You may get bored in the business
 You will limit the potential of your employees
Growth strategies
In the fast expanding economies of today, adoption of growth strategies by business enterprises is a
must for the survival, in the long-run; lest they should be swept away by environmental influences,
especially competition, technology and governmental regulations.
Types of growth strategies

 Internal growth strategies
 External growth strategies.
Internal growth strategies are those in which a firm plans to grow on its own, without the support of
others. On the other hand, external growth strategies are those in which a firm plans to grow by
combining with others.

Internal growth strategies
(1) Market Penetration:
Market penetration is a growth strategy, in which a firm tries to seek a higher volume of sales of
present products by penetrating (or getting deeper), into existing markets through devices like the
following:
 Aggressive advertising and other sales promotion techniques.

 Encouraging new uses of the old product e.g. use of coffee during summer season by way of cold
coffee or coffee-shake.
 3.Coming out with exchange offers e.g. exchange of old scooters or TV for new ones at a
discount etc.
(2) Market Development:
This growth strategy, as the name implies, aims at increasing sales of existing products through l
market development, i.e. exploring new markets for company’s products. For example, many
companies have achieved remarkable growth by entering into foreign markets; pushing their
products I by changing size, packaging, and brand name etc.
Market development may be tried by a company I within the same country also e.g. sale of
electronic goods like transistors etc. in rural areas.
(3) Product Development:
Product development as a growth strategy implies developing new and improved products for sale in
existing markets; so that people who have otherwise become indifferent to the old product with
passage of time get attracted to the new product because of the charisma associated with the
phenomenon of newness.
Examples: introduction of Babool and Promise toothpastes by Balsara Hygiene Products Ltd.;
introduction of Colgate Super Shakti by Colgate-Palmolive (India) Ltd. etc.
(4) Diversification:
Diversification is quite an important growth strategy. As growth entails risk, diversification, as a

growth strategy, implies developing a wider range of products to diffuse risk or to reduce risk
associated with growth. The fundamental philosophy of diversification is presumably contained in
an old English proverb which suggests that one should not keep all one’s eggs in one basket.

External growth strategies.
1.Mergers:
Merger, as a growth strategy, implies combination (or integration) of two or more companies into
one. Merger may take place with a co-operative approach or it may take place with a hostile
approach. In the latter case, a merger is known as a takeover.
Specially in the Indian conditions, industrialists Vijaya Mallaya, R.P. Goenka and Manu Chabria are
described as “take-over kings.”
2.Amalgamation
Amalgamation is defined as the combination of one or more companies into a new entity. It
includes:
 1.Two or more companies join to form a new company

 2.Absorption or blending of one by the other
3. Ventures
Joint venture is a growth strategy in which two or more companies, establish a new enterprise (or
organisation) by participating in the equity capital of the new organization and by agreeing to
participate in its management in an agreed manner.
4.Strategic Alliances
Mergers and acquisitions bring together companies through complete changes in ownership.
However, companies can also share resources and activities to pursue a common strategy without
sharing in the ownership of the parent companies. There are two main kinds of strategic alliance:
equity and non-equity alliances.
5.Acquisition
An acquisition is a situation whereby one company purchases most or all of another company's
shares in order to take control. An acquisition occurs when a buying company obtains more than
50% ownership in a target company. As part of the exchange, the acquiring company often
purchases the target company's stock and other assets, which allows the acquiring company to make
decisions regarding the newly acquired assets without the approval of the target company’s
shareholders.

6.Leverage buy out
A leveraged buyout (LBO) is the purchase of a company using a large amount of debt or borrowed
cash to fund the acquisition. In other words, it’s when a company used a large amount of borrowed
funds to purchase another company instead of using its own money or raising capital from investors.
7.Franchising
The term ‘franchise‘ is understood as an exclusive right conferred by the parent organization to an
individual or enterprise to use the former’s successful business model, in stipulated areas.
Franchising is a business relationship; wherein the owner authorizes another party to use their brand,
product, business system and process in return for adequate consideration.
THE CONCEPT OF SME
Until January 1996 the small and medium enterprises were considered those enterprises whose total
number of employees is less than 500 people, with the following subdivisions: micro-enterprises (1-
9 employees), small enterprises (10-99 employees), and medium enterprises (100-499 employees).
The type of definition established, strictly on a single criterion – the number of people employed in
enterprises – determined the termination of its use in the current statistics of the European Union. In
1996, the European Commission establishes a new
definition of small and medium enterprises based on four quantitative criteria (EC. 1996):
 The total number of employees in the enterprise;
 The annual volume of the turnover;
 The total of the assets in the enterprise balance;
 The degree of independence of the enterprise or the ownership over it.
According to it, an enterprise is deemed as having a small or medium size when the total number of
its employees is below 250 people. The European Commission mentions that an enterprise can be
deemed medium indeed, when it meets the following conditions simultaneously: the number of its
employees is more than 49 and fewer than 250;
World Bank Definition of SMEs

FIRM SIZE EMPLOYEE ASSETS ANNUAL SALES
Micro < 10 < $ 10000 < $100000

Small < 50 < $ 3 Million < $ 3 Million
Medium < 300 < $ 15 Million < $ 15 Million
Source; World Bank
The Indian Government passed the Micro, Small, and Medium Enterprise Development ( MSMED)
Act, 2006 to address policy issues affecting SMEs and to extend the coverage and investment
ceiling of the sector .This act aim to facilitate development of the sector along with improving its
competitiveness.
The MSMED Act,2006 classifies enterprises broadly into; manufacturing enterprise and services
enterprise. The act further classifies these enterprises into micro, small ,and medium enterprise
based on their investment in plant and machinery ( for manufacturing enterprise ) or investment in
equipment ( for service enterprise). The following is the present ceiling on investment for
enterprise to be classified as micro, small, and medium enterprises.
Definition of Indian MSMEs

Classification Manufacturing Enterprise Services Enterprises Investment
Investment in Plant & Machinery in Equipment
Micro Up to Rs 2.5 lakhs Up to Rs 1 lakh
Small Above Rs 2.5 lakhs and up to Rs 50 Above Rs. 1 lakhs and up to Rs 20
lakh lakh
Medium Above Rs. 50 lakh and up to Rs 1 Above Rs 20 lakhs and up to Rs
crore 50 lakh

Source ; Ministry of Micro, Small & Medium Enterprises
ROLE OF SMES IN INDIAN ECONOMY

MSMEs play a crucial role of a compound in growth of the Indian economy by providing energetic association to large
local and international value chains. As per the fourth All India Census of MSMEs, 2006,there are more than 36 million
MSMEs in India contributing 45 % of industrial output, 40 % to
The Fourth All India Census of MSME indicates that, of the overall Indian MSME sector, 31.79% of the enterprises are
involved in manufacturing activities, while the remaining 68.21% are engaged in services.
Role of SMEs in the Indian Economy

 SMEs employ around 40% of India’s workforce, which is an estimated 80 million people,
who are given an opportunity for livelihood and employment via low-skilled jobs. Around
1.3 million SMEs contribute 45% to India’s manufacturing output and 40% of India’s total
export. In a way, they form the backbone of the Indian economy. At 48 million, India has the
second largest number of SMEs in the world, edging close to China which has around 50
million SMEs.
 There are around 6000 products manufactured by 31.7% SMEs while the remaining 68.2%
are engaged in delivering various services. This sector, if extended the right support, has the
potential to spread industrial growth throughout the country.
 Despite employing 40% of India’s workforce, SMEs are also the bane of India’s economic
problems. Though the volume numbers work in their favor, they currently contribute to about
17% of India’s GDP.

Advantages
 SMEs have the remarkable ability to fuel economic growth. They create many new job
opportunities, drive the bandwagon of innovation and expand the tax base.
 SMEs also increase the competition amongst the peers and heat up the market scenario. This
continuous struggle for supremacy brings out the best in a business. This triggers a win-win
situation for both provider and the consumer. Moreover, this increases the aggregate
productivity as well as economy-wide efficiency.
 New entrepreneurs bring forth innovations, ideas and skills.
 In recent years, SMEs have registered a higher growth rate as compared to the global
industrial sector. The chief advantage of the SME sector is its potential to generate
employment at low capital expenditure.
 The economic growth in many Asian countries such as Korea, Taiwan and Japan is directly
proportional to the spurt in SME activities. SMEs play a very significant role in the rapid
industrialization and development of China, where approximately 99% of the total business
ventures are SMEs. These SMEs together produce around 60% of the total industrial output
and approximately 40% of the total profits and taxes achieved by the various industries in
China. Again, various SMEs in the US generate more than half of the gross domestic
products.
 SMEs act as a cushion against recession by adapting and innovating as per the changing
circumstances. There is a big connection between the various levels of poverty, hunger and
economic well-being of the society and the general condition of various SMEs in the country.
 In almost every country, the SMEs are a large proportion of all businesses in the country. In
most developing and developed economies, over 90% of SMEs improve the employment
rate. In fact, when big industries downsize and cut down jobs, SMEs keep developing and
creating more jobs.
 SMEs adapt fast to the dynamic business world by switching on to e-commerce and online
transaction of goods and services. The advancement in technology has not only eased out the
process of selling and buying, it has helped the entrepreneurs to cut cost on advertising and
marketing too. The various e-commerce platforms make life easy for SMEs.
 SMEs play a vital role in being service providers and traders to the primary industry.
 SMEs also produce the finished goods as well as services.
 SMEs contribute heavily to the development of various sectors such as manufacturing,
agriculture and ICT services.
 There is a reciprocal relationship between an SME and the economy. Development in
economy ensures the creation of more SMEs. The creation of more SMEs ensures a boost in
the economy.
SMEs Dominated Industries
Unsurprisingly, most SMEs reside in industries that don't require large initial capital investments.
Based on 2016 U.S. Small Business Administration (SBA) loan approval rates, the fastest-growing
SMEs are:
 Legal offices
 Fitness and recreation centers

 General freight trucking, local
 Dentists offices
 All other specialty trade contractors
 Landscaping services
 Snack and nonalcoholic beverage bars
 Veterinary services
 Other personal care services
 Drinking places (alcoholic beverages)
 All other personal services
 Physicians offices
 Hotels (except casino hotels) and motels
 Engineering services
 Limited-service restaurants
 Beauty salons
 Child day care services
 Beer, wine and liquor stores
 Single family housing construction
 Full-service restaurant
MAJOR CAUSES OF SICKNESS IN SMALL SCALE INDUSTRIES

Small Scale Industries (SSIs) play vital role in the economic development of a country. Some SSIs
turn out to be sick due to various reasons. Some of the major causes for sickness in small scale
industries are dealt in brief.
1.Inadequacy of working capital

Some units turn out sick due to inadequacy of working capital. There may exists delay in sanction of
working capital by financial institutions. Industrial units find it difficult to meet out day to day
operations due to the time gap between sanction of term loan and working capital needs. Shortage of
Working Capital is one of the main reasons for sickness.
2. Non-availability of credit
Sickness in SSI sector may be attributed to non-availability of credit. Delay in getting loans may
result in stoppage of work or lead to production loss. Low production may lead to reduced sales
which in turn may lead to financial loss.
3. Poor and obsolete technology
Some industrial units use technology which is outdated. Out dated technology may affect the
quantity and quality of production. This results in production loss and reduces demand for the goods.
4. Non availability of raw material

Some units may require raw material which are scarcely available. Sometimes, the raw material
required by the unit may not be available in abundance. Hence, this affects the production and the
sales of the goods. If the raw material is not abundantly available, then the industrial units have to
spend a large amount of money to buy them. This may result in financial loss.
5. Marketing problems
Sometimes, the industrial units may not know as to how to create demand for the products. Lack of
marketing knowledge may result in less demand for the goods. Similarly, there may be less demand
for the goods produced by the SSI due to competition or change in the taste of the buyers.
For example, lot of units producing dyes and ceramics have been found sick in Gujarat and Tirupur.
6. Erratic power supply
Shortage in power supply affects the industries. This results in delay in production of goods and
leads to financial losses.
7. Labor problems
The relationship between the employer and the employees may not be cordial. Some of the labour
problems such as strike, lay off, lock out may lead to industrial sickness.
8. Poor Management
The entrepreneur must be a good planner, organizer and a manager. If the Industrial Unit promoters
lack managerial skills, then it may lead to several problems.
9. Inadequate attention to R&D

Industries have to allocate a part of money in research and development to survive and compete with
competitors. Failure to focus on the above may lead to industrial sickness
10. Diversion of resources

If the employer utilizes the funds obtained for the business for any personal purposes, then diversion
of funds will lead to industrial sickness. The funds used for personal purposes cannot be regenerated
and hence it may result in delay in payment of loans or financial crisis for the borrower of the loan.
11. Globalization
Small scale industrial units may find it very difficult to compete with large scale industries and
foreign competitors. Inability of the units to face growing competition due to liberalization and
globalization may lead to industrial sickness.

12. Dispute among partners
There may arise dispute between the partners or family members running the unit. This results in
stoppage of work and leads to industrial sickness.
13. Overambitious projects
The project may not be technically feasible, such an overambitious project is one of the reasons for
industrial sickness.
REMEDIAL MEASURES TO OVERCOME SICKNESS
Some of the remedial measures to curb and overcome sickness in industrial undertakings are as
follows:
1. Identifying sickness at initial stage
Sickness in Small Scale Industries are not a sudden phenomenon but it is a gradual process taking 5
to 7 years eroding the health of a unit beyond cure. Therefore, the identification and detection of the
sickness at incipient stage is the first and foremost measure to detect and reduce industrial sickness.
Sickness must be identified at initial stage.
2. Financial assistance
Lending agencies need to relax their lengthy process and other norms for extending credit to the
SSIs. To combat the incidence of sickness financial institutions should grant credit without delay to
SSI sector.
A number of initiatives can be undertaken to overcome credit problems such as:.
 Increasing Working capital limit.

 Enhancing the powers of bank managers of specialized bank branches in offering credit to
SSI.
 Strengthening the mechanism for discounting bills.
 Reduced rate of interest.
These measures would improve the flow of credit and keep a check on the incidence of sickness.
3. Improving Infrastructure
Infrastructure facilities can be improved by setting up industrial estates. Common testing centers
etc., infrastructural problems can be solved by improving the roadways, waterways, establishing
telecommunication systems.
4. Technology Up-gradation

Funds may be provided by the financial institutions for adoption of advanced technology. Similarly,
some sort of training may be provided for use of the latest technology to overcome technological
problems. Technological up-gradation can help to overcome technological obsolescence.
5. Marketing assistance
Marketing assistance may be provided to entrepreneurs for marketing the goods produced by them.
Government must help to market the goods. Government and Non Government Organizations
(N.G.Os) can come forward for marketing the goods produced by the SSI sector. The problem of
poor marketing of the products can be solved by coordinated efforts of entrepreneurs and
promotional agencies.
6. Liquidation
It is better to wind up the business when there is no possibility to revive the unit.
7. Government Interventions
Interventions must be made by the government to prevent sickness. Periodic review of financial
statements can help to identify and prevent sickness at initial stage.
8. Training
A proper environment must be created where an entrepreneur will be educated and will have a
proper knowledge, skill and experience about internal and external environment of business to
compete with large-scale industries and multinational companies.
9. Rehabilitation
Potentially viable sick units should be dealt well for the purpose of rehabilitation. Rehabilitation is a
remedy considered for industrial units, which have already become sick and for the units that are on
the verge of collapse.
Under the provisions of SICA, 1985, the Government of India has established Board for Industrial
and Financial Reconstruction (BIFR) in January 1987 for determining the preventive, ameliorative,
remedial and other measures which are required to be taken in respect of sick industrial company
and for expeditious enforcement of rehabilitation schemes.
POLICIES TO SUPPORT MSME
1.Reservation policy
The erstwhile Policy of Reservation for exclusive manufacture in SSI (now-MSE) sector has been
done away with the dereservation of remaining 20 items reserved for exclusive manufacture in
SSI (now-MSE) sector vide Notification no.S.O.998 (E) dated 10.04.2015. The Advisory
Committee on Reservation, in its 31st meeting held on 20.10.2014, had recommended for

dereservation of remaining 20 items reserved for exclusive manufacture in SSI(now-MSE)
sector.
Removal Of Quantitative Restrictions And Reservation Policy
As a result of improved balance of payment situation, India was under obligation to remove
quantitative restrictions by 1st April 2001. Quantitative restrictions have been removed by 1st
April, 2001. Out of 812 items which were on the reserved list at the time QRs had been removed
on 643 items by 1st April 2000. These items have already been put on OGL as under: -
Year Items Reserved
Items On OGLRemaining Items Under
For MSME Reserved List
1998-99 821 478 343
1999-2000 812 576 236
2000-2001 812 643 169
2001-2002 799 799 NIL
2.Price And Purchase Preference Policy for Marketing MSME Products
The marketing assistance to the small scale units through preferential purchase by the Central and
State Purchase Organizations was emphasized in the comprehensive programme for the development
of MSME sector drawn in early 50's in pursuance of Industrial Policy Resolution of 1984. The
emphasis was reiterated in the Government Policy in 1991.
Purchase Preference Policy
The policy of reservation of items for exclusive purchase has been in vogue since late 60's as a
measure of market support to the MSME sector. The Stores Purchase Policy of the Government prior
to 1989 was in the form of categorization of items in six major groups as detailed below:-
Group-I Items which are of no interest to small scale units and can be solely procured only
from large scale units (128 items)
Group-II Items which can be purchased solely from large scale units but where it is possible for
the large scale units to job contract accessories and components to MSME units (159
items).
Group-III Items which can be purchased both from small scale and large scale industrial units.
Group-IV Items which are reserved for exclusive purchase from small scale units (409 items).
Group-V Items which are to be purchased from MSME to the extent of 75% of the requirement
(13 items).
Group-VI Items which are to be procured exclusively from the MSME units to the extent of
50% of the requirement (28 items)
However, with effect from July 28, 1989, the Purchase Policy of the Government was modified in a
major way and the categorization of the items was reduced to the following two major groups, viz.
(i)
Items of stores reserved for exclusive purchase from KVIC/Women's Development
Corporations/Small Scale units and
(ii)
Others not so reserved.
The first group comprised of 409 items earlier reserved for exclusive purchase from the small scale

sector. The list of 409 items reserved for purchase from the MSME sector was reviewed and after
deleting items having common nomenclature and making the entries more generic as well as
addition of new items, a revised list of 358 items was approved by the Committee (set up to consider
the question of inclusion of additional items) which also includes 8 handicraft items reserved for
purchase from the Handicraft Sector.
Price Preference Policy
The Director General of Supplies and Disposals, the Central Purchasing Organisation of
Government of India provide a number of facilities to small scale industries under its Government
Stores Purchase Programmes. These include reservation of certain products for exclusive purchase
from the small scale sector and price preference upto 15% in case of selected items which are
produced in both large scale as well as small scale units. The Single Point Registration Scheme of
NSIC was launched as a market support measure for the MSME Sector. Under the Scheme, the
following benefits are given to MSME units which get themselves registered with the NSIC:-
i)Availability of Tender Sets free of cost;
ii)
Exemption from payment of Earnest Money Deposit;
iii)
Exemption from payment of Security Deposit;
iv)
Price preference up to 15% over the lowest quotation of the large scale units (on merits)
3.Credit policy
Government of India recognized the need for a focused credit policy for MSEs in the early days of
promotion of MSMEs. This in turn led to a credit policy with the following components:-
Priority Sector Lending: Credit to the MSE sector is ensured as part of the priority sector lending by
banks. Banks are required to compulsorily ensure that specified percentage (currently 40% for domestic
commercial banks and 32% for foreign banks) of their overall lending is made to priority sectors as
classified by Government. These sectors include agriculture, small enterprises, retail trade, etc.
Institutional Arrangement: Small Industries Development Bank of India (SIDBI) is the principal
financial institution for promotion, financing and development of the MSE sector. Apart from extending
financial assistance to the sector, it coordinates the functions of institutions engaged in similar activities.
SIDBI’s major operations are in the areas of (i) refinance assistance (ii) direct lending and (iii)
development and support services. The commercial banks are important channels of credit dispensation
to the sector and play a pivotal role in financing the working capital requirements, besides providing
term loans (in the form of composite loans). State Financial Corporations (SFCs) and twin-function
State Industrial Development Corporations (SIDCs) at the State level are the main sources of long-term
finance for the MSE sector.
With the liberalization of the Indian economy, greater emphasis was placed on meeting the credit needs
of MSEs. This was manifest through the following initiatives:
 1.Earmarking of credit for micro enterprises within overall lending to micro and small all
enterprises.
 Opening of specialized SME branches.
 Enhancement in the limit for computation of the aggregate working capital requirements on the

basis of minimum 20% of the projected annual turnover.
 Enhancement of composite loan to Rs.1 crore (Rs.10 million).
 No collateral security for loans up to Rs.5 lakh (Rs.0.5 million)
4.FDI policy
 An industrial undertaking, i.e., a company with interests in industry can invest upto 24% equity in a
SSI unit.
 If the equity goes beyond 24%, the industrial unit loses its SSI status.
 There is no restriction on the extent of equity that can be held by a Non-resident Indian (NRI) as an
individual/partner in a SSI unit.
 Investors need to file an application with the Reserve Bank of India (RBI) in the prescribed format
and approval is ordinarily granted within 15 days.
 For foreign investment outside the automatic route, clearance has to be obtained from Foreign
Investment Promotion Board (FIPB).
 Applications for setting up a 100% Export Oriented Unit are also required to be filed with the SIA.
 For setting up a unit in an Export Processing Zone (EPZ), application has to be filed with the
Development Commissioner of the concerned EPZ.
 Under automatic procedures, foreign technology agreements are being permitted in respect of
industries that are designated as high priority industries.
 The use of foreign brand names and / or trade mark of goods is also now being permitted freely.
5.Trade policy
 An industrial undertaking, i.e., a company with interests in industry can invest upto 24% equity
in a SSI unit.
 If the equity goes beyond 24%, the industrial unit loses its SSI status.
 There is no restriction on the extent of equity that can be held by a Non-resident Indian (NRI) as
an individual/partner in a SSI unit.
 Investors need to file an application with the Reserve Bank of India (RBI) in the prescribed
format and approval is ordinarily granted within 15 days.
 For foreign investment outside the automatic route, clearance has to be obtained from Foreign
Investment Promotion Board (FIPB).
 Applications for setting up a 100% Export Oriented Unit are also required to be filed with the
SIA.
 For setting up a unit in an Export Processing Zone (EPZ), application has to be filed with the
Development Commissioner of the concerned EPZ.
 Under automatic procedures, foreign technology agreements are being permitted in respect of
industries that are designated as high priority industries.
 The use of foreign brand names and / or trade mark of goods is also now being permitted freely.
SMALL ENTREPRENEUR IN INTERNATIONAL BUSINESS

Timing: Are You Ready for Globalization
The first question to ask yourself is whether or not your business is ready to move into the
international marketplace. Competition is heating up between businesses of all sizes, and you could
find yourself contending with some of the biggest names in the industry. Analyze your domestic
sales and growth to determine whether future projections are strong enough to sustain global
expansion. Consider whether or not your current staff is sufficient to handle the added workload of a
new market. Most importantly, you need to find out if enough demand for your products and
services exists in other countries to make international growth worth the investment.
Research: Getting Your Facts Straight
For an international endeavor to be successful, you have to understand what you’re up against. Get
to know everything you can about the countries where you want to expand, the atmosphere of the
market there, the demographics of your target audience and the buying power you could potentially
tap into. Gather detailed information about the logistics of every part of the selling and shipping
process, including fees, customs and regulations. Your products and methods must be in line with all
the rules of doing business in the countries you choose. Government organizations at home and
abroad can help you understand and navigate the complexities of this process.
Cost: Drawing Up a Budget

As with any business decision, it’s essential to know how much it’s going to cost to move into the
international arena. Price out everything at the start, dividing money between upfront costs, product
development, advertising, transport expenses and any new software or materials you’ll need to make
the expansion successful. User your current sales and marketing plans to project how much money
will be necessary to support international growth in the future. Having a clear financial blueprint
helps you manage the risks involved in taking such a big step and stay on track when faced with
unexpected challenges.
Partnership: Working With the Right People
International markets can be unfamiliar territory for small business owners, which is why you need a
partner who understands the ins and outs of global sales. International partners must be
knowledgeable, trustworthy, highly qualified and willing to take the risks necessary for global
expansion. Choose a team that shares the vision and values of your company to ensure a consistent
approach across all markets.
Team members should have experience with products and services similar to yours. Leverage this
experience to break into the global market using the tools that already exist in your chosen area.
Take advantage of what your partner knows about sales and marketing to appeal directly to the local
audience.
You’ll also need a shipping partner that can help you handle the maze of customs for prompt product
delivery. Strategic partnerships ensure that you understand and comply with local regulations so that
your product hits the proper distribution channels without any setbacks.

Marketing: Understanding International Customers
The same comprehensive market research that you did when starting your business is necessary for a
successful international campaign. Work with marketers in your target country who understand the
best ways to present your products in the context of the local culture. Tap into their expertise to
create a blueprint for product development or improvement. Starting with a modest production plan
gives you the freedom to make changes according to consumer response and demand. Be mindful of
which sectors are growing the fastest to determine how you can best take advantage of the market.
Management: Using the Right Tools

Cloud-based software is the ideal solution for businesses looking to expand globally. Information in
the cloud can be accessed by any member of your domestic or international team at any time. This
simplifies communication and collaboration by allowing everyone to see how sales are tracking and
make updates to projects in real time. It removes the barriers of time zones and gives everyone the
freedom to work when it’s convenient for them. Find a software solution that lets you connect with
your entire business network and share data between departments in the most efficient way possible
to keep operations running smoothly at home and abroad.
Reflect: Don’t Abandon Your Domestic Business
As you’re considering each aspect of global expansion, one thing you never want to do is make a
move that will diminish the success of your product on home soil. Domestic sales got you where you
are today, and neglecting that foundational market to pursue the dream of international success can
backfire. You must have a lot of additional bandwidth to take it on international markets, because if
you’re operating too close to capacity at home and you try to move abroad, the current business is
more likely to suffer.
Aim for balance in all of your business endeavors to maintain a strong brand image at home as you
begin to establish yourself globally.

UNIT-V
INSTITUTIONAL SUPPORT TO ENTREPRENEUR AND MSMEs
Content: Role of Government- Role of IDBI,NIESBUD,SISI,DIC, Financial

institutions- Commercial Banks,-Entrepreneurial Development Institute-
Universities and other educational institutions offering Entrepreneurial
Development Programmed
A. INSTITUTIONS SET UP BY CENTRAL GOVERNMENT
1. Small industries development organization (SIDO)
SIDO was established in October 1973 now under Ministry of Trade, Industry and Marketing.
SIDO is an apex body at Central level for formulating policy for the development of Small Scale
Industries in the country, headed by the Additional Secretary & Development
Commissioner(Small Scale Industries)under Ministry of Small Scale Industries Govt. of India.
SIDO is playing a very constructive role for strengthening this vital sector, which has proved to
be one of the strong pillars of the economy of the country. SIDO also provides extended support
through Comprehensive plan for promotion of rural entrepreneurship.
2. Management development Institute(MDI)
MDI is located at Gurgaon(Haryana).It was established in 1973 and is sponsored by Industrial

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

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

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

Development(NIESBUD),New Delhi
It was established in 1983 by the Government of India. It is an apex body to supervise the
activities of various agencies in the entrepreneurial development programmes. It is a society
under Government of India Society Act of 1860.The major activities of institute are:
i) To make effective strategies and methods
ii) To standardize model syllabus for training
iii) To develop training aids, tools and manuals
iv) To conduct workshops, seminars and conferences.
v) To evaluate the benefits of EDPs and promote the process of Entrepreneurial Development.
vi) To help support government and other agencies in executing entrepreneur development
programmes.
vii) To undertake research and development in the field of EDPs.
6.National Institute of Small Industries Extension Training
It was established in 1960 with its headquarters at Hyderabad. The main objectives of national
Institute of Small Industries Extension Training are:
i) Directing and Coordinating syllabi for training of small entrepreneurs.
ii) Advising managerial and technical aspects.
iii) Organizing seminars for small entrepreneurs and managers.
iv) Providing services regarding research and documentation.

7.National Small Industries Corporation Ltd. (NSIC)
The NSIC was established in 1995 by the Central Government with the objective of assisting the
small industries in the Government purchase programmes. The corporation provides a vast-
market for the products of small industries through its marketing network. It also assists the
small units in exporting their products in foreign countries.
8. Risk Capital and Technology Finance Corporation Ltd.(RCTFC)
RCTFC was established in 1988 with an authorized capital of 15 cores rupees. The main
objectives of RCTFC are provision of risk capital for the extension and expansion of
entrepreneurial development and venture capital for the projects with high techniques for
technology development and transfer.
9. National Research and development corporation (NRDC)
NRDC was established in 1953 under Department of Science and Industrial Research under
Government of India. Its main objectives are:
i) Providing assistance in technology transfer
ii) Transfer of technology
iii) Establishing relations with various technology institutions and collecting various indigenous
techniques developed by them.
10.Khadi and village industries Commission(KVIC)
Khadi and Village Industries Commission established by an Act of Parliament in 1956.It is a

service organization engaged in promotion and development of Khadi and Village Industries in
rural areas. Its main objectives are:
i) Providing employment in rural areas.
ii) Improvement of skills
iii) Rural Industrialization
iv) Transfer of Technology
v) Building strong rural community base and self reliance among rural people.
11. Indian Institute of Entrepreneurship(IIE)

It was established by the Department of Small Scale Industries and Agro and Rural Industries in
1953.It is autonomous organization with its headquarters at Guwahati. Its main objective is to
undertake research,training and consultancy activities in the field of small industry and
entrepreneurship.
12. Miscellaneous Organisation
In addition to above various organizations at all India level are assisting and are engaged in
entrepreneur development.These include ICICI, IFCI, SIDBI, UTI, IDBI, IIBI etc.
13. National Alliance of Young Entrepreneurs(NAYE)
It has sponsored number of entrepreneurial development acheme in collaboration with various

public sector banks.The main objective of the scheme is to encourage young entrepreneurs to
explore investment and self –employment opportunities .It arranges for their training and assists
them in procuring necessary finance.In 1975 NAYE also set up a Women’s Wing to make
women self-relaint and to raise their status.
15. Centre for Entrepreneurial Development(CED) Ahmedabad
It was sponsored by the Government of Gujrat and public financial institutions operating in the
State.It conducts entrepreneurial development programmes at various centres.The important
features of training programme are:
i) Training programmes were conducted after survey for opportunities was made.
ii) Appropriate linkage was established with supporting agencies supplying finance,factory
sheds,raw materials, etc.
iii) Behavioural tests were conducted to select the entrepreneurs.
iv) Training programmes covered theoretical and practical aspects.
v) Full time project leader took follow up action after the training was over.
16. Institute for Entrepreneurial Development (IED)
It was set up by the IDBI in association with other financial institutions,public sector banks and
the State Governments.The IEDs was set up to fulfil the entrepreneurial development needs of
the industrially backward States in the country.
17. Technical Consultancy Organisation (TCOs)
A network of TCOs has been established by All India Financial Institutions and State
Government throughout the country.These organizations have been set up to provide

comprehensive package of services to entrepreneurs in general and to small business
entrepreneurs in particular.Their main functions include the following:
i) Identifying potential industrial project.
ii) Preparing project reports,feasibility reports and pre-investment status.
iii. Identifying potential entrepreneurs.
iv. Providing technical and administrative support.
v. Conducting techno-economic studies of the projects.
vi. Conducting market research and surveys.
vi. Rendering advice to set up laboratories and design centre.
18. Public Sector Banks.
Public sector banks in association with NAYE have been conducting entrepreneurial
development programmes.The main thrust of these banks has been to identify potential
entrepreneurs in rural and backward areas.For example Punjab National Bank started
entrepreneurial assistance programme in March 1977 in th States of West Bengal and Bihar.
Similarly,Bank of India started entrepreneurial assistance programme since August 1972 in the
States of Punjab, Rajasthan , Himachal Pradesh,J& k and the Union Territories of Chandigarh
and Delhi.
The important Forms of entrepreneurial assistance are:
i) Identifying potential entrepreneurs
ii) Identifying viable projects.
iii) Assisting in preparation of project profiles
iv) Helping in project evaluation.
v) Arranging practical training.
vi) Financing the projects.
B) Institutions set up at State Level
There are a number of institutions establishes at state level for

organizing,developing,developing,assisting and making successful entrepreneurial development
programmes.Prominent among these are:

1. Small Industries Service Institute (SISI)
2. State Financial Corporation (SFC)
3. State Small Industries Corporation (SSIC)
4. District Industries Centres(DIC)
5. Technical Consulting Organisation Ltd. (TCO)
6. Industrial Directorates
7. Commercial and Cooperative Banks
8. State Industrial Development Corporation
9. Industrial Estates
10. State Industries Corporation
GOVERNMENT OF INDIA SUPPORT FOR INNOVATION AND

ENTREPRENEURSHIP IN INDIA
The Government of India has undertaken several initiatives and instituted policy measures to
foster a culture of innovation and entrepreneurship in the country. Job creation is a foremost
challenge facing India. With a significant and unique demographic advantage, India, however,
has immense potential to innovate, raise entrepreneurs and create jobs for the benefit of the
nation and the world.
In the recent years, a wide spectrum of new programmes and opportunities to nurture innovation
have been created by the Government of India across a number of sectors. From engaging with
academia, industry, investors, small and big entrepreneurs, non-governmental organizations to
the most underserved sections of society.
Recognising the importance of women entrepreneurship and economic participation in enabling

the country’s growth and prosperity, Government of India has ensured that all policy initiatives
are geared towards enabling equal opportunity for women. The government seeks to bring
women to the forefront of India’s entrepreneurial ecosystem by providing access to loans,
networks, markets and trainings.
A few of India’s efforts at promoting entrepreneurship and innovation are:
Startup India: Through the Startup India initiative, Government of India promotes
entrepreneurship by mentoring, nurturing and facilitating startups throughout their life cycle.
Since its launch in January 2016, the initiative has successfully given a head start to numerous
aspiring entrepreneurs. With a 360 degree approach to enable startups, the initiative provides a
comprehensive four-week free online learning program, has set up research parks, incubators and
startup centres across the country by creating a strong network of academia and industry bodies.
Make in India: Designed to transform India into a global design and manufacturing hub, the
Make in India initiative was launched in September 2014. It came as a powerful call to India’s
citizens and business leaders, and an invitation to potential partners and investors around the

world to overhaul out-dated processes and policies, and centralize information about
opportunities in India’s manufacturing sector. This has in turn helped procure investments, foster
innovation, develop skills, protect intellectual property and build best-in-class manufacturing
infrastructure.
Atal Innovation Mission (AIM): AIM is the Government of India’s endeavour to promote a
culture of innovation and entrepreneurship, and it serves as a platform for promotion of world-
class Innovation Hubs, Grand Challenges, start-up businesses and other self-employment
activities, particularly in technology driven areas. In order to foster curiosity, creativity and
imagination right at the school, AIM recently launched Atal Tinkering Labs (ATL) across India.
ATLs are workspaces where students can work with tools and equipment to gain hands-on
training in the concepts of STEM (Science, Technology, Engineering and Math). Atal Incubation
Centres (AICs) are another programme of AIM created to build innovative start-up businesses as
scalable and sustainable enterprises. AICs provide world class incubation facilities with
appropriate physical infrastructure in terms of capital equipment and operating facilities. These
incubation centres, with a presence across India, provide access to sectoral experts, business
planning support, seed capital, industry partners and trainings to encourage innovative start-ups.
Support to Training and Employment Programme for Women (STEP): STEP was launched
by the Government of India’s Ministry of Women and Child Development to train women with
no access to formal skill training facilities, especially in rural India. The Ministry of Skill
Development & Entrepreneurship and NITI Aayog recently redrafted the Guidelines of the 30-
year-old initiative to adapt to present-day needs. The initiative reaches out to all Indian women
above 16 years of age. The programme imparts skills in several sectors such as agriculture,
horticulture, food processing, handlooms, traditional crafts like embroidery, travel and tourism,
hospitality, computer and IT services.
Jan Dhan- Aadhaar- Mobile (JAM): JAM, for the first time, is a technological intervention
that enables direct transfer of subsidies to intended beneficiaries and, therefore, eliminates all
intermediaries and leakages in the system, which has a protential impact on the lives of millions
of Indian citizens. Besides serving as a vital check on corruption, JAM provides for accounts to
all underserved regions, in order to make banking services accessible down to the last mile.
Digital India: The Digital India initiative was launched to modernize the Indian economy to
makes all government services available electronically. The initiative aims to transform India
into a digitally-empowered society and knowledge economy with universal access to goods and
services. Given historically poor internet penetration, this initiative aims to make available high-
speed internet down to the grassroots. This program aims to improve citizen participation in the
digital and financial space, make India’s cyberspace safer and more secure,abd improve ease of
doing business. Digital India hopes to achieve equity and efficiency in a country with immense
diversity by making digital resources and services available in all Indian languages.

Biotechnology Industry Research Assistance Council (BIRAC): BIRAC is a not-for-profit
Public-Sector Enterprise, set up by Department of Biotechnology to strengthen and empower
emerging biotechnology enterprises. It aims to embed strategic research and innovation in all
biotech enterprises, and bridge the existing gaps between industry and academia. The ultimate
goal is to develop high-quality, yet affordable, products with the use of cutting edge
technologies. BIRAC has initiated partnerships with several national and global partners for
building capacities of the Indian biotech industry, particularly start-ups and SME’s, and has
facilitated several rapid developments in medical technology.
Department of Science and Technology (DST): The DST comprises several arms that work
across the spectrum on all major projects that require scientific and technological intervention.
The Technology Interventions for Disabled and Elderly, for instance, provides technological
solutions to address challenges and improve quality of life of the elderly in India through the
application of science and technology. On the other hand, the ASEAN-India Science, Technology
and Innovation Cooperation works to narrow the development gap and enhance connectivity
between the ASEAN countries. It encourages cooperation in science, technology and innovation
through joint research across sectors and provides fellowships to scientists and researchers from
ASEAN member states with Indian R&D/ academic institutions to upgrade their research skills
and expertise.
Stand-Up India: Launched in 2015, Stand-Up India seeks to leverage institutional credit for the
benefit of India’s underprivileged. It aims to enable economic participation of, and share the
benefits of India’s growth, among women entrepreneurs, Scheduled Castes and Scheduled
Tribes. Towards this end, at least one women and one individual from the SC or ST communities
are granted loans between Rs.1 million to Rs.10 million to set up greenfield enterprises in
manufacturing, services or the trading sector. The Stand-Up India portal also acts as a digital
platform for small entrepreneurs and provides information on financing and credit guarantee.
Trade related Entrepreneurship Assistance and Development (TREAD): To address the

critical issues of access to credit among India’s underprivileged women, the TREAD programme
enables credit availability to interested women through non-governmental organizations (NGOs).
As such, women can receive support of registered NGOs in both accessing loan facilities, and
receiving counselling and training opportunities to kick-start proposed enterprises, in order to
provide pathways for women to take up non-farm activities.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY): A flagship initiative of the Ministry of
Skill Development & Entrepreneurship (MSDE), this is a Skill Certification initiative that aims
to train youth in industry-relevant skills to enhance opportunities for livelihood creation and
employability. Individuals with prior learning experience or skills are also assessed and certified
as a Recognition of Prior Learning. Training and Assessment fees are entirely borne by the
Government under this program.

National Skill Development Mission: Launched in July 2015, the mission aims to build
synergies across sectors and States in skilled industries and initiatives. With a vision to build a
‘Skilled India’ it is designed to expedite decision-making across sectors to provide skills at scale,
without compromising on quality or speed. The seven sub-missions proposed in the initial phase
to guide the mission’s skilling efforts across India are: (i) Institutional Training (ii) Infrastructure
(iii) Convergence (iv) Trainers (v) Overseas Employment (vi) Sustainable Livelihoods (vii)
Leveraging Public Infrastructure. Click here to download the framework for implementation.
Science for Equity Empowerment and Development (SEED): SEED aims to provide
opportunities to motivated scientists and field level workers to undertake action-oriented,
location specific projects for socio-economic gain, particularly in rural areas. Efforts have been
made to associate national labs and other specialist S&T institutions with innovations at the
grassroots to enable access to inputs from experts, quality infrastructure. SEED emphasizes
equity in development, so that the benefits of technological accrue to a vast section of the
population, particularly the disadvantaged.
SOME OF THE MSME SCHEMES LAUNCHED BY THE GOVERNMENT
Udyog Aadhaar memorandum
Aadhaar card is a 12 digit number given to all individuals by the government. In this, the
Aadhaar card is a mandatory requirement. The benefit of registering in this scheme is ease in
availing credit, loans, and subsidies from the government. Registration can be done both ways in
the online mode or the offline mode.
Zero Defect Zero Effect
In this model, goods that are manufactured for export have to adhere to a certain standard so that
they are not rejected or sent back to India. To achieve this the government has launched this
scheme. In this, if the goods are exported these are eligible for some rebates and concessions.
Quality Management Standards & Quality technology Tools
Registering in this scheme will help the micro, small and medium enterprises to understand and
implement the quality standards that are required to be maintained along with the new
technology. In this scheme, activities are conducted to sensitize the businesses about the new
technology available through various seminars, campaigns, activities etc.
Grievance Monitoring System
Registering under this scheme is beneficial in terms of getting the complaints of the business
owners addressed. In this, the business owners can check the status of their complaints, open
them if they are not satisfied with the outcome.

Incubation
This scheme helps innovators with the implementation of their new design, ideas or products.
Under this from 75% to 80% of the project cost can be financed by the government. This scheme
promotes new ideas, designs, products etc.
Credit Linked Capital Subsidy Scheme
Under this scheme, new technology is provided to the business owners to replace their old and
obsolete technology. The capital subsidy is given to the business to upgrade and have better
means to do their business. These small, micro and medium enterprises can directly approach the
banks for these subsidies.
Women Entrepreneurship
This scheme is especially started for women who want to start their own business. The
government provides capital, counseling, training and delivery techniques to these women so that
they manage their business and expand it.
The government has launched a number of more schemes and support system for these
enterprises, to know more about the MSME schemes the following link of the government can be
checked.
NATIONAL INSTITUTE FOR ENTREPRENEURSHIP AND SMALL

BUSINESS DEVELOPMENT (NIESBUD)
Objective of NIESBUD
NIESBUD is an apex organization working under the administrative control of the Ministry of
Skill Development and Entrepreneurship, Government of India.
The major activities of the Institute include Training of Trainers, Management Development
Programmes, Entrepreneurship-cum-Skill Development Programmes, Entrepreneurship
Development Programmes and Cluster Intervention. The Core Objectives of the Institute are as
follows:
 To standardize and systemize the processes of selection, training, support and

sustenance of potential and existing entrepreneurs.
 To support and motivate institutions/organizations in carrying out training and other
entrepreneurship development related activities.
 To serve as an apex national level resource institute for acelarating as well as
enhancing the process of entrepreneurship development, to measure the impact of the
same within different strata of the society.

 To provide vital information and support to trainers, promoters and entrepreneurs
by organizing research and documentation activities relevant to entrepreneurship and skill
development.
 To create a holistic environment to train the trainers, promoters and consultants in
diverse areas of entrepreneurship and skill Development.
 To offer consultancy nationally/internationally for promotion of entrepreneurship and
small business development at national and international level.
 To provide national/international forums for interaction and exchange of ideas for
policy formulation and its refinement at various levels.
 To share experience and expertise in entrepreneurship development across national
frontiers to create awareness on it at national level.
 To interchange international experience and expertise in the field of entrepreneurship
development for mapping its development at international levels too.
Training:
 Assessing the training programmes and identifying the gaps to systematically conduct
training programmes, orienting them as well as motivating youth towards
entrepreneurship.
 Developing and Designing various communication media tools for promoting the culture
of entrepreneurship among different strata of society in the country.
 Supporting and playing a catalytic role towards organizations engaged directly or
indirectly in developing and promoting entrepreneurship and self-employment in the
Country.
 Providing consultancy services in the area of entrepreneurship and Skill Development
especially for MSDEs.
 In addition to above, Also Providing consultancy services to other Institutions engaged in
entrepreneurial training either in the Government or in the Private Sector.
 Designing, Conceptualizing and standardizing course curriculum for entrepreneurship
and skill development programmes.
Research & Development:

 Promoting research and development activities in the area of entrepreneurship,
particularly in MSDE sector. Undertaking documentation and disseminating information
related to entrepreneurship/ enterprise development.
 Developing and publishing literatures, articles, journals and information material related
to entrepreneurship/enterprise development/ Skill Development/MSDEs
 Providing an interactive platform for exchange of ideas and experiences for various
targets groups mainly through seminars, workshops, conferences as well as through
training programs.
 Identifying the Problem and developing feasible solutions by conducting research studies
for generating knowledge and accelerating the development of entrepreneurship.

Major Focus Areas :
 Creating a holistic environment to support entrepreneurship and skill development within

the Institute.
 Evaluating and revising the training programmes sponsored by NIESBUD so as to fit in
with the internal and external environmental changes with respect to entrepreneurship
and small business Development
 The institute is actively engaged in creating a positive image among the general public on
entrepreneurship and eliminating the misconception related to it. This helps in
disseminating the information on entrepreneurship and skill Development fruitfully.
 Announcing various employment generation schemes by the Government, aimed at
creating training aids materials, organizing Trainings for budding entrepreneurs to
achieve the challenging goals
 Keeping in tune with the changing macro and micro environment with respect to
government policies. With this the Institute through concerted efforts has been able to
achieve and sustain financial self-sufficiency through organizing various programmes;
enhancing the conduct of market driven fee-based training activities; increasing sales of
training materials
 The Institute has provision of highly qualified faculties and experienced professionals
with specialization in multidimensional aspects related to Entrepreneurial Competency &
Motivation; Project Identification & Formulation; Finance and Credit; Small Enterprise
Management; Women Entrepreneurship; Intellectual Property Rights; Marketing
Management & Entrepreneurial Education, E-Learning Modules.
 Handholding and post training support for bridging the gap between employers and
jobseekers for setting up their enterprise.
SISI and Their Role in the Development of SME’s:
The main objective of the Institute is to provide technical & consultancy services to small
scale industries. Providing promotions & extention services to small scale or ancillary & tiny
units. Besides this, training, library, exhibition & economic information, workshop facilities are
also provided.
These institutes give on the spot technical assistance & to small units to solve their
technical problems. They also advice small units on new & improved techniques of production &
in the use of modern machinery & equipment. The following are the services;
1. Technical Advisory Service-
 To assist small units in the manufacture of quality & standardised product.

 To prepare designs & drawings for special equipment such as dies, jigs, fixtures etc.

 To provide workshops & laboratory facilities to small-scale units & to demonstrate the
use of modern technical process on different machines & equipments.
 To guide small units on the selection & use of raw materials & substitutes.
2. Management Consultancy Services-

 To conduct complete implant studies of individual small-scale units.
 To guide small units in proper methods of industrial management, including finance,
accounts, production management etc.
 To provide special tech-managerial advise on cost reduction & economy in the use of raw
materials, quality improvement etc.
 To provide ad-hoc managerial advice on special problems to small scale units.
3.Economic Advisory Services-
 To guide small units on the sources of availability of finance from different agencies.
 To conduct economic surveys of different agencies & suggest programmes for their
future developments.
 To conduct industrial surveys of backward areas & suggest scope for development of
small industries based on locally available raw material.
 To provide relevant economic & commercial information on different industries.
4.Managerial Services-
 To conduct export promotion training courses for small entrepreneurs.

 To conduct technical training courses for supervisors & artisans in various technical
subjects.
 To conduct ad-hoc training courses in other areas of interests to small units.
 To conduct small industrial management training courses & other courses in specialized
subjects, for the benefit of small-scale units.
THE DISTRICT INDUSTRIES CENTRES (DIC’s)

The District Industries Centres (DIC’s) programme was started in 1978 with a view
to providing integrated administrative framework at the district level for promotion
of small scale industries in rural areas. The DIC’s are envisaged as a single window
interacting agency at the district level providing service and support to small
entrepreneurs under a single roof. DIC’s are the implementing arm of the central and
state governments of the various schemes and programmes. Registration of small
industries is done at the district industries centre and PMRY (Pradhan Mantri Rojgar
Yojana) is also implemented by DIC. The organizational structure of DIC’S consists

of General Manager, Functional Managers and Project Managers to provide
technical services in the areas relevant to the needs of the district concerned.
Management of DIC is done by the state government.Progress of DIC Till March
31st 1998, 422 District Industries Centres (DICs) have been set up covering
431districts of country leaving out the metropolitan cities and some new districts.
The same rose to a total of 640 Districts as per the census of 2011
Objectives of District Industries Centre (DIC):
The important objectives of DICs are as follow :
 Accelerate the overall efforts for industrialization of the district.

 Rural industrialization and development of rural industries and handicrafts.
 Attainment of economic equality in various regions of the district.
 Providing the benefit of the government schemes to the new entrepreneurs.
 Centralization of procedures required to start a new industrial unit and minimization- of
the efforts and time required to obtain various permissions, licenses, registrations,
subsidies etc.
Role of DIC
 Identification of Entrepreneurs: DIC’s develop new entrepreneurs by conducting

entrepreneurial motivation programmes throughout the district particularly under
SEEUY scheme. DICs also take association of SIS’s and TCOs for conducting
EDPs.
 Provisional Registration: Entrepreneurs can get provisional registration with DICs

which enable them to take all necessary steps to bring the unit into existence. The
entrepreneur can get assistance from term lending institutions only after getting
provisional registration. The provisional registration is awarded for two years
initially and can be renewed every year but only for two times.
 Permanent Registration: When the entrepreneur completes all formalities required

to commence the production like selection of site, power connection, installing
machinery etc they can apply to DIC for permanent registration. It is only after

getting the permanent registration that the entrepreneur can apply for supply of raw
materials on concessional rates. Permanent registration is essential to avail all types
of benefits extended by the government from time to time.
 Purchases of Fixed Assets: The DIC’s recommend loan applications of the
prospective entrepreneur to various concerned financial and developmental
institutions e.g. NSIC, SISI etc. for the purchase of fixed assets. It also recommend
to the commercial banks for meeting the working capital requirement of SSI to run
day -to -day operations.
 Clearances from Various Departments: DIC takes the initiative to get clearances
from various departments which is essential to start a unit. It even takes follow up
measures to get speedy power connection.
 Assistance to Village Artisans and Handicrafts: In spite of inherent talent and
ability, village artisans are not better off because they lack financial strength to strive
in the competitive market. DIC in support with different lead banks and nationalized
banks extends financial support to those artisans.
 Incentives and Subsidies: DIC helps SMEs and rural artisans to subsidies granted
by government under various schemes. This boost up the moral as well as the
financial capacity of the units to take further developmental activities. The different
types of subsidies are power subsidy, interest subsidy for engineers and subsidy
under IRDP etc. from various institutions.
 Interest Free Sales Tax Loan: SIDCO provides interest free sales tax loan up to a
maximum limit of 8per cent of the total fixed assets for SSI units set up in rural
areas. But the sanction order for the same is to be issued by DIC. The DIC
recommends the case of SME to National Small Industries Corporation Limited for
registration for Government purchase programme.
 Assistance of Import and Export: Government is providing various types of

incentives for import and export of specific goods and services. These benefits can
be availed by any importer or exporter provided the same is routed through the

concerned DIC. Export and import license is also issued to the importer or exporter
only on the basis of recommendation of DIC. Government of India and other
organizations to give publicity to industrial products. DICs provide free space to
SMEs for the display of their products and provide financial assistance for the
purpose.
 Training Programmes: DIC organizes training programs to rural entrepreneurs and also
assists other institutions or organization imparting training to train the small
entrepreneurs.
 Self-employment for Unemployed Educated Youth: The DICs have launched a
scheme to assist the educated unemployed youth by providing them facilities for self-
employment. The youth should be in the age group of 18 to 35 years with minimum
qualification of Metric or Middle with I.T.I. in engineering or Technical Trade.
Technocrats and women are given preference.
 Fairs and Exhibitions: The DIC inspires and facilitates the SSI units to participate in
various fairs and exhibitions which are organized by the
Role of DIC for the promotion of Small Scale & Cottage Industries.
 Technical support for preparation of Project Report.
 Information on sources of machinery & Equipment.
 Priority in Power supply / Telephone connection.
 Promotion of new Industrial Estates / Growth Centres.
 Land/ Shed in Industrial Estate.
 Approval of Project Reports of special types.
 Promotion of Electronic Industries.
 Govt. Margin Money Loan under Additional Employment Programme.

 Training through Entrepreneurship Development Programme.
 Assistance under State Incentives Scheme.
 Allotment of Raw Materials.
 Financial Assistance under Self Employment Schemes.
 Financial assistance through Bank/ WBFC/ WBSIC/NSIC.
 Assistance under Equipment Leasing Scheme through NSIC.
 Marketing linkage with Central Govt./ State Govt. organisations/ undertakings.
 Marketing assistance through WBSIC/NSIC/CEO.
 Ancillary Industry tie-up with Govt. undertakings.
 Marketing information.
 Marketing assistance through participation in Exhibitions/ Trade Fairs/ Buyers-

Sellers Meet etc.
 Marketing assistance to Handicrafts Artisans through participation in Handicrafts

Expo and Exhibition inside/ outside of the state.
 Linkage with organizations like WBHDC/ WB State Handicrafts Co-operative

Society Ltd. /Development Commissioners (Handicrafts).
 Attending problems related to SSI Registration/ Bank loan/ Marketing of production
etc.
 Linkage with Research Institutes like CMERI/CGCRI/NML/CFTRI etc. for
technology up grading and innovation.
 Financial Assistance for modernization of Unit.
 Skill development training through own workshop/ organization like SISI, PDTC/
Coir Board/ETDC.

 Managerial capability improvement through training, workshop, and seminars.
 Export assistance.
 In plant study of their SSI Units.
 Standardization of products.
 Sick unit Revitalization.
 National level awards for innovative products/ outstanding growth/ exports etc.
 Promotion of products under Non-conventional Energy Sources.
 Assistance under Coir development Schemes.
 Registration of Industrial Co-operative and financial assistance to them.
 Pollution control.
 Assistance under scheme promoted by district development. Finance Corporation/

KVI Commission/ Board and such other organizations.
 Single window assistance through SIDA and District Industries Centers.
 BSAI Loan for Cottage Industries.
 Design & Product Development for Handicrafts.
 Awards to Handicrafts Artisans.
 Development of Lac Industries.
 Setting up of Bio-gas plants.
 Linkage with Research Institutes like CMERI/CGCRI/NML/CFTRI etc. for

technology up gradation and innovation.
 Financial Assistance for modernisation of Unit.

 Skill development training through own workshop/ organisation like SISI, ETC/ Coir
Board/ETDC.
ENTREPRENEURIAL DEVELOPMENT INSTITUTE OF INDIA(EDII)

The Entrepreneurship Development Institute of India (EDI), an autonomous and not-for-
profit Institute, set up in 1983, is sponsored by apex financial institutions - the IDBI Bank
Ltd., IFCI Ltd., ICICI Bank Ltd. and State Bank of India (SBI). The Government of Gujarat
pledged twenty-three acres of land on which stands the majestic and sprawling EDI campus.
To pursue its mission further, EDI has helped set up twelve state-level exclusive
entrepreneurship development centres and institutes. One of the most satisfying
achievements, however, was taking entrepreneurship to a large number of schools, colleges,
science and technology institutions and management schools in several states by including
entrepreneurship inputs in their curricula. In view of EDI’s expertise in Entrepreneurship,
the University Grants Commission appointed the EDI as an expert agency to develop
curriculum on Entrepreneurship. EDI’s success led by its strong sense of commitment
culminated in recognition of its achievements by the Government of India and various state
governments. In the international arena, efforts to develop entrepreneurship by way of
sharing resources and organising training programmes, have helped the EDI earn accolades
and support from the World Bank, Commonwealth Secretariat, UNIDO, ILO, FNSt, British
Council, Ford Foundation, European Union and several other renowned agencies.
Objective of EDII
1. creating a multiplier effect on opportunities for self-employment,

2. augmenting the supply of competent entrepreneurs through training,
3. augmenting the supply of entrepreneur trainer-motivators,
4. participating in institution building efforts,
5. inculcating the spirit of 'Entrepreneurship' in youth,
6. promoting micro enterprises at rural level,
7. developing and disseminating new knowledge and insights in entrepreneurial theory and
practice through research,

8. facilitating corporate excellence through creating intrapreneurs (entrepreneurial
managers),
9. improving managerial capabilities of small scale industries,
10. sensitising the support system to facilitate potential and existing entrepreneurs establish
and manage their enterprises,
11. collaborating with similar organisations in India and other developing countries to
accomplish the above objectives.
ASSISTANCE OF FINANCIAL INSTITUTION TO SME
1.Small Industries Development Bank of India (SIDBI)
Under a SIDBI Act, 1989 passed in Parliament, the Small Industries Development Bank of India
was established on 2nd April 1990. The charter setting up SIDBI, foresee SIDBI to be the major
financial body for the marketing, financing, and development of micro, small and medium-scale
enterprises or MSMEs in India. Besides playing a developmental role to micro finance bodies, it
has also floated with numerous other units like SIDBI Venture Capital Ltd, Credit Guarantee
Fund Trust for Micro and Small Enterprises and more.
Functions of SIDBI
 SIDBI refinances loans extended by the primary lending institutions to small scale
industrial units, and also provides resources support to them.
 SIDBI discounts and rediscounts bills arising from sale of machinery to or manufactured
by industrial units in the small scale sector.
 To expand the channels for marketing the products of Small Scale Industries (SSI) sector
in domestic and international markets.
 It provides services like leasing, factoring etc. to industrial concerns in the small scale
sector.
 To promote employment oriented industries especially in semi-urban areas to create more
employment opportunities and thereby checking migration of people to urban areas.
 To initiate steps for technological up-gradation and modernisation of existing units.
 SIDBI facilitates timely flow of credit for both term loans and working capital to SSI in
collaboration with commercial banks.
 SIDBI Co-Promotes state level venture funds in association with respective state
government.
It grants direct assistance and refinance loans extended by primary lending institutions for
financing exports of products manufactured by small scale units
2.INDUSTRIAL FINANCE CORPORATION OF INDIA LIMITED (IFCI)
The Industrial Finance Corporation of India Limited (IFCI), the first development finance
institution set up in 1948 and since July 1, 1993, it has been brought under companies
Act, 1956. The IFCI extends financial assistance to the industrial sector through rupee
and foreign currency loans, under writing/direct subscription to shares/debentures. It

guarantees and also offers financial services through its facilities for equipment
procurement, equipment leasing and finance to leasing and hire-purchase companies. It
also provides merchant banking.
The IFCI has started new promotional schemes, such as (a) interest subsidy schemes for
women entrepreneurs (b) consultancy fee subsidy schemes for providing marketing
assistance to small-scale industry and (c) encouraging the modernization of tiny, small-
scale industries. The IFCI has also taken in the development of backward districts,
throughout the country.
3.THE INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI)
The Industrial Development Bank of India limited, now more popularly known as IDBI Bank,
was established as a wholly-owned subsidiary of Reserve Bank of India. The foundation of the
bank was laid down under an Act of Parliament, in July 1964. The main aim behind the setting
up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the
initial stages of growth and development. In February 1976, the ownership of IDBI was
transferred to Government of India.
The IDBI became the main institution, through which the institutes engaged in financing,
promoting and developing industry were to be coordinated. In January 1992, IDBI accessed
domestic debt market for the first time, with innovative deep discount bonds, and registered path-
breaking success. In the following year, it set up the IDBI Capital Market Services ltd., as it
wholly-owned subsidiary, to offer a broad range of financial services, including bond trading,
equity broking, client asset management and depository services
To help the small-scale industries overcome the problem, IDBI has come up with a scheme,
called Seed Capital Scheme. It is operated through the agency of notified SIDCs and SFCs. In
Tamil Nadu it is operated through TIIC. Projects assisted by commercial banks are also eligible
for seed capital assistance. The amount of seed capital assistance per concern shall not exceed 20
per cent of the project cost, subject to a ceiling of Rs. 15 lakhs. The assistance will be in the form
of soft loans. The soft loan would be interest free which will carry a service charge of one per
cent per annum. No security except the personal guarantee of the promoter is stipulated.
In the case of small-scale industries, requirement of seed capital assistance upto the first Rs. 4
lakhs is expected to be financed by State Financial Corporations from their special capital
scheme and only the excess if any, over this amount would be met out of the present scheme.
SMALL INDUSTRIES DEVELOPMENT CORPORATION (SIDCO)

In many state governments, for the promotion of small scale industries, a separate corporation
has been set up which is known as Small Industries Development Corporation. They undertake
all kinds of activities for the promotion of small scale industries. Right from the stage of
installation, to the stage of commencing production, these Corporations help small scale
industries (SSI) in many ways.

In short, they provide infrastructure facilities to small scale industries. Due to the assistance
provided by SIDCO, many backward areas in most of the states have been developed. So,
SIDCO has also been responsible in spreading the industrial activity throughout several states.
Objectives of SIDCO
1. The main objective of SIDCO is to stimulate the growth of industries in the small scale
sector
2. To provide infrastructure facilities like roads, drainage, electricity, water supply, etc is
one of the primary objective of SIDCO.
3. To Promote industrial estates which will provide industrial sheds of different sizes with
all basic infrastructure facilities.
4. To Provide technical assistance through training facilities to the entrepreneurs.
5. To Promote skilled labor through the setting up of industrial training institutes.
ASSISTANCE OF COMMERCIAL BANK TO SME

For a long period, commercial banks did not come forward to extend financial assistance to the
small-scale industries because of the SSIs weak economic base. The first lead in this regard was
taken by the State Bank of India, in consultation with the Reserve Bank of India in March 1956
by setting up a pilot scheme for the provision of credit for small-scale industries. In the
beginning, the scheme was confined to 9 branches of the SBI, which was later extended to all the
branches of the SBI. The commercial banks started taking initiation in financing SSI’s in a
greater way only after the bank nationalization in July 1969.
Normally, the commercial banks provide assistance for working capital requirements of the
SSI’s over the years. They have also started providing ‘term’ finance as is indicated by the data
complied by the RBI that of all the advances given to the SSI’s by the commercial banks, the
share of the term loan accounted for nearly 30 per cent. A notable feature in the financing of
SSI’s has been the introduction of the “Lead Bank Scheme”, by the RBI. Under this scheme each
district has been allotted to one scheduled commercial bank for the intensive development of
banking facilities. The introduction of “Credit Guarantee Scheme”, in 1960, was a big fillip in
the filed of commercial banks’ financing to SSI’s initially, this scheme was introduced in 22
district on an experimental basis. Latter, it was extended to all over the country.
The availability of credit to the SSI sector improved further with the stipulation on foreign banks
to extend at least 10 per cent of their net bank credit to the SSI sector and to deposit the shortfall,
if any, with the small industries development bank of India (SIDBI).


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UNIT-1

ENTREPRENEUR AND ENTREPRENEURSHIP

EVOLUTION OF THE CONCEPT OF ENTREPRENEUR

 EARLY PERIOD: The earliest definition of the entrepreneur as a go-between is

 17th CENTURY: An entrepreneur was a person who entered into a contractual

Entrepreneurship Development By Dr.Sarita Satpathy Page 1

MEANING AND DEFINITION OF ENTREPRENEUR

Joseph A Schumpeter defines an entrepreneur as “ one who innovates, raises

1.An Individual or Group Individuals : Entrepreneur may be an individual or a group of

Entrepreneurship Development By Dr.Sarita Satpathy Page 2

4.Innovation : An entrepreneur is basically an innovator by nature. He is always in search of

7.Decision-making : An entrepreneur is a rational decision- maker. He has to take several

8.Self-confidence : An entrepreneur has high degree of self- confidence in achieving his

10.Motivator : An entrepreneur is a motivator. He motivates his workers by giving them

11.Human Relations Ability : An entrepreneur possess sound human relations ability to

12.Economic Planning : Planning is an activity of a highly ubiquitous character. Every

ESSENTIALS OF A SUCCESSFUL ENTREPRENEUR :

1.Imaginative : Creative thinking and imagination are important entrepreneurial qualities

3.Self confident : Entrepreneur should be confident that what he is doing or whatever he is

8.Willingness of challenges : An entrepreneur should have the tendency of accepting new

Entrepreneurship Development By Dr.Sarita Satpathy Page 4

Entrepreneurship Development By Dr.Sarita Satpathy Page 5

Entrepreneurship Development By Dr.Sarita Satpathy Page 6

According to A.H. Cole, “Entrepreneurship is the purposeful activities of an individual or a

According to F.H. Frentz : “Entrepreneurship is organisation and co-ordination of factors of

NATURE AND CHARACTERISTICS OF ENTREPRENEURSHIP

Entrepreneurship Development By Dr.Sarita Satpathy Page 7

2. Creation of job opportunities

Entrepreneurship is the incubator of the innovation. Innovation creates disequilibria in the

4. Impact on community development

5.The consequence of business failure

6. Political and economic integration of outsiders

Entrepreneurship Development By Dr.Sarita Satpathy Page 8

Standard of living is a concept built on increasing amount of consumption of a variety of goods

So it depends on the availability of diversified products in the market. Entrepreneurship provides

9. Promotes research and development

10. Balanced regional development

11.Increase National Income

12.Promote countries export trade

13.Dispersal economic power

Role of Entrepreneurial Growth

1. Aims to enlarge the base of entrepreneurs

Factors affecting entrepreneurial growth

Entrepreneurship Development By Dr.Sarita Satpathy Page 9

2.Non economic factor

Barriers to Entrepreneurial Growth

Entrepreneurship Development By Dr.Sarita Satpathy Page 10

PROBLEMS OF WOMEN ENTREPRENEURS

3.Inadequate Marketing Facilities: Most of the women entrepreneurs depend on

6.Family Responsibilities: Management of family may be more complicated than the

Entrepreneurship Development By Dr.Sarita Satpathy Page 11

REMEDIES TO SOLVE THE PROBLEMS OF WOMEN ENTREPRENEURS

 Women entrepreneurs’ should be encouraged and assisted to set up co-operatives with a

Entrepreneurship Development By Dr.Sarita Satpathy Page 12

Examples of Indian women entrepreneurs

Entrepreneurship Development By Dr.Sarita Satpathy Page 13

Naina Lal Kidwai

Entrepreneurship Development By Dr.Sarita Satpathy Page 14

Entrepreneurship Development By Dr.Sarita Satpathy Page 15