Unit -1

Introduction to Entrepreneurship

Concept of Entrepreneurship

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

What Is Entrepreneurship

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

Meaning of Entrepreneur

The entrepreneur is defined as someone who has the ability and desire to establish, administer and
succeed in a startup venture along with risk entitled to it, to make profits. The best example of
entrepreneurship is the starting of a new business venture. The entrepreneurs are often known as a
source of new ideas or innovators, and bring new ideas in the market by replacing old with a new
invention.It can be classified into small or home business to multinational companies. In economics, the
profits that an entrepreneur makes is with a combination of land, natural resources, labour and capital.

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

Types of Entrepreneurship

It is classified into the following types:

Small Business Entrepreneurship-

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

Scalable Startup Entrepreneurship-

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

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

Social Entrepreneurship-

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

Characteristics of Entrepreneurship:

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

Ability to take a risk- Starting any new venture involves a considerable amount of failure risk. Therefore,
an entrepreneur needs to be courageous and able to evaluate and take risks, which is an essential part
of being an entrepreneur.

Innovation- It should be highly innovative to generate new ideas, start a company and earn profits out
of it. Change can be the launching of a new product that is new to the market or a process that does the
same thing but in a more efficient and economical way.

Visionary and Leadership quality- To be successful, the entrepreneur should have a clear vision of his
new venture. However, to turn the idea into reality, a lot of resources and employees are required.
Here, leadership quality is paramount because leaders impart and guide their employees towards the
right path of success.

Open-Minded- In a business, every circumstance can be an opportunity and used for the benefit of a
company. For example, Paytm recognised the gravity of demonetization and acknowledged the need for
online transactions would be more, so it utilised the situation and expanded massively during this time.

Flexible- An entrepreneur should be flexible and open to change according to the situation. To be on the
top, a businessperson should be equipped to embrace change in a product and service, as and when
needed.

Know your Product-A company owner should know the product offerings and also be aware of the
latest trend in the market. It is essential to know if the available product or service meets the demands
of the current market, or whether it is time to tweak it a little. Being able to be accountable and then
alter as needed is a vital part of entrepreneurship

Evolution of Entrepreneurship
To understand more about Evolution of Entrepreneurship use the below link.

https://indiafreenotes.com/the-evolution-of-the-concept-of-entrepreneurship/

Differences between Entrepreneur and Inventor

Inventors and entrepreneurs have many similar characteristics. However, they differ in many ways as
mentioned below.

Bases of difference Inventor Entrepreneur

1. Goal The main goal of The main goal of

an inventor is to an entrepreneur is
create something to develop
new. a sustainable
business.

2. Idea An inventor An entrepreneur

creates idea. converts the idea
into new
invention.

3.Commercialization An inventor An entrepreneur

develops a new brings goods or
product or service, services to market
but may not bring and makes them
to market. commercial
success.

4. Risk The risk associated with an entrepreneur is high. The risk of an inventor is low
since the investment is comparatively low.

5. Idea-cash relationship An entrepreneur converts ideas into cash. An inventor converts

cash into idea.
6. Success factor Leadership is the success factor for an entrepreneur. Research is the success
factor of an inventor.

7. Motivation Profitability with growth is the driving force of an entrepreneur. Knowledge

development is the driving force of an inventor.

8. Sharing of ideas An entrepreneur is reluctant to share his ideas. An inventor freely shares his
ideas and technology.

Role of Entrepreneur

Entrepreneurship is the capacity and willingness to develop and participate in a business venture with
the intention of making a profit regardless of the financial risks involved. The role of entrepreneurship in
any economy is critical, as it contributes to the socio-economic development of societies in various
ways, including

Identifying existing opportunities in the market - Through production and distribution of goods and
services, entrepreneurial ventures seek to satisfy client needs and improve livelihoods. Constant market
research provides insights into existing customer needs that inform decisions to provide goods and
services. An example is Jumia Kenya which noticed a gap in the distribution of goods through online
platforms and exploited this opportunity, giving rise to a very vibrant online business platform.

Creating employment opportunities – The World Bank 2016 Kenya Economic update placed
employment uptake by the private sector at 67% in 2014. This figure is likely to have increased with the
improved performance of Kenya in the ease of doing business ranking. Entrepreneurship helps bridge
the unemployment gap through formal and informal business ventures that employ millions of Kenyans.

Contributing to national income – Through payment of taxes, businesses contribute to government

revenue that consequently facilitates development. Entrepreneurial ventures further contribute to the
GDP, an indication of their importance in raising revenue and financing government projects, as well as
contributing to economic growth.

Infrastructural Development – Entrepreneurial ventures open up infrastructural development in their

localities. Starting up businesses often leads to the development of transport and communication
networks, driven by the need for infrastructure created by these businesses. Companies like Keroche
and Dominion farms opened up their localities, enabling thriving businesses to take root, taking
advantage of the good transport and communication channels available.

Contributing to Community Development – Through participation in Corporate Social Responsibility,

entrepreneurs contribute to and support the development of infrastructure for education, healthcare,
business training & mentorship and other social needs.

Entrepreneurship ethics and social responsibility are critical aspects that shape how businesses operate
and interact with society. Here’s an overview of these concepts:
Entrepreneurship Ethics

1. Integrity and Honesty: Entrepreneurs must conduct their business with honesty and integrity,
providing truthful information to stakeholders, including investors, customers, employees, and the
public.

2. Fairness: Ethical entrepreneurs treat all stakeholders fairly, ensuring non-discrimination and equitable
treatment in hiring practices, pricing, and customer relations.

3. Transparency: Maintaining openness about business practices, decision-making processes, and

financial status is crucial. Transparency builds trust and fosters a positive reputation.

4. Respect for Stakeholders: Entrepreneurs must respect the rights and interests of all stakeholders,
considering their impact on employees, customers, suppliers, and the community.

5. Accountability: Being accountable for actions and decisions is essential. This includes taking
responsibility for any negative impacts and working to rectify them.

6. Compliance with Laws: Adhering to all relevant laws and regulations is a baseline for ethical behavior.
This includes labor laws, environmental regulations, and industry-specific standards.

Social Responsibility

1. Environmental Sustainability: Entrepreneurs should adopt sustainable practices, minimizing their

environmental footprint. This includes using eco-friendly materials, reducing waste, and conserving
energy.

2. Social Equity: Promoting social equity involves creating inclusive opportunities and contributing to
social welfare. This can include supporting local communities, providing fair wages, and engaging in
charitable activities.

3. Economic Responsibility: Contributing to economic development through job creation, fair trade
practices, and investing in local economies helps ensure long-term business sustainability and
community prosperity.

4. Ethical Sourcing: Ensuring that materials and products are sourced ethically, without exploitation or
harm to individuals and communities, is crucial. This includes fair trade practices and humane working
conditions.

5. Community Engagement: Active participation in community development through volunteer work,

partnerships, and support for local initiatives strengthens the social fabric and enhances the business’s
reputation.

6. Corporate Philanthropy: Many entrepreneurs engage in philanthropy, donating a portion of profits to

charitable causes, supporting education, health care, and other essential services.Balancing Ethics and
ProfitWhile profit is a primary goal for entrepreneurs, ethical behavior and social responsibility should
not be compromised. Long-term success is often tied to a strong ethical foundation and a commitment
to social responsibility. Ethical businesses can build a loyal customer base, attract and retain talented
employees, and avoid legal issues.

Implementing Ethics and Social Responsibility

1. Code of Ethics: Developing a clear code of ethics helps guide behavior and decision-making within the
organization.

2. Training and Awareness: Regular training programs ensure that all employees understand the
importance of ethics and social responsibility and know how to apply these principles in their work.

3. Monitoring and Reporting: Implementing systems to monitor compliance with ethical standards and
social responsibility initiatives, and reporting progress to stakeholders, fosters accountability.

4. Stakeholder Engagement: Engaging with stakeholders to understand their concerns and expectations
helps shape ethical and socially responsible practices.In summary, entrepreneurship ethics and social
responsibility involve conducting business in a way that is ethical, transparent, and beneficial to society.
This approach not only helps in building a positive reputation but also ensures sustainable business
growth and development.

Ease of doing business in India

In 2014, the Government of India launched an ambitious program of regulatory reforms aimed at
making it easier to do business in India. The program represents a great deal of effort to create a more
business-friendly environment. India as one of the top 10 improvers, for the 3rd time in a row, with an
improvement of 67 ranks in 3 years.

India has emerged as one of the most attractive destinations not only for investments but also for doing
business. India jumps 79 positions from 142nd (2014) to 63rd (2019) in 'World Bank's Ease of Doing
Business Ranking 2020'.

Central Government Initiatives

Starting a Business

Permanent Account Number (PAN), Tax Deduction & Collection Account Number (TAN), Director
Identification Number (DIN) have now been merged into a single form (SPICe) for company
incorporation.8

Elimination of incorporation fee for companies with an authorised capital of up to Rs. 15 Lakh.

Dealing with Construction Permits

Municipal Corporations of Delhi, as well as Municipal Corporation of Greater Mumbai, have introduced
fast track approval system for issuing building permits with features such as Common Application Form
(CAF), provision of using digital signature and online scrutiny of building plans.
Delhi has uniform building by-laws which allow for risk-based classification regimes for different building
types. It has a provision of deemed approval of sanctioning building plans within 30 days

Trading Across Borders

The Central Board of Excise and Customs (CBEC) has implemented the ‘Indian Customs Single Window
Project’ to facilitate trade. Importers and exporters can electronically lodge their Customs clearance
documents at a single point. The government has launched ‘PCS1x’ which intends to integrate 27
maritime stakeholders at one platform.

The number of mandatory documents required for customs purposes, for both import and export of
goods, has been reduced to three.

Enforcing Contracts

The Commercial Courts and Appellate Division of High Courts have been established in Mumbai and
Delhi.

National Judicial Data Grid (NJDG), provides case data including case registration, cause list, case status
and orders/ judgements of courts district-wise across the country. NJDG is open to the public since
2015.

Getting Credit

Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) is a geographically
unified electronic registry that provides for registration by asset type. Since 2017, CERSAI also provides
search through debtor's name.

Getting Electricity

Electricity connection is provided within 7 days if no Right of Way (RoW) is required and within 15 days
where RoW is required.26

Service line cum Development charges are now capped at USD 339.84 in Delhi.

Registering Property

All sub-registrar offices have been digitized and its records have been integrated with the Land Records
Department, in both Delhi and Mumbai.

In Mumbai, all property tax records have been digitized. Property is mutated automatically after
registration.30 The digitization of property records ensures transparency and allows citizens to ascertain
the history of transactions in digital mode.

Resolving Insolvency
The Insolvency and Bankruptcy Code of 2016 has introduced new dimensions in resolving insolvency in
India. It is India’s first comprehensive legislation on corporate insolvency.33

Under Fast-track Corporate Insolvency Resolution Process (CIRP) for mid-sized companies, the process
for insolvency shall be completed within 90 days with a maximum grace period of another 45 days.

Paying Taxes

Reduction of corporate tax from 30% to 25% for mid-sized companies.35

Domestic companies can opt for concessional tax regime @ 22% (effective tax rate: 25.17% inclusive of
surcharge and cess). Such a company cannot claim any income tax incentive or exemption. Such
companies are not liable to pay the Minimum Alternate Tax (MAT).
 Unit -2

Innovation, Creativity & Start-up

The role of creativity in innovative startups

Innovative start-ups are built on creativity. It's what allows them to identify new opportunities
and develop new products and services that solve problems in unique ways. Without creativity,
start-ups would be stuck copycatting existing businesses and never breaking through to become
truly successful.

The role of creativity in innovative start-ups is essential, but it's often misunderstood.
Creativity is not just about coming up with wacky ideas or being artistic. It's about problem-
solving and thinking outside the box.

The 3 Components of Creativity

1. Expertise - this encompasses everything known to a person, irrespective of where it was

gained (formal education, practical experience or interaction with others)
2. Creative-thinking skills - the ability to think flexibly and imaginatively; a cognitive style
conducive to having new perspectives on problems.

3. Motivation - driven by deep interest and involvement in the work, curiosity, enjoyment or a
personal sense of challenge. Motivation is in 2 parts: intrinsic and extrinsic ‐ with the former
being far more essential for creativity.

Expertise and creative thinking are in an individual's mind, while motivation determines what
people will actually do and is consequently most important to outcomes. Extrinsic motivation
comes from outside, such as in response to a carrot-and-stick approach. The most common
extrinsic motivation managers use is money, but this method is not guaranteed to enhance
people's creativity.
On the other hand, passion and the interest fuelled by a person's internal desire to do something
are far more powerful motivators. The work itself (its interest, satisfaction and challenge)
becomes the motivating force and can be expressed as
Managers can influence the level of expertise and creative thinking skills, but this strategy can
be slow and costly. In order to influence outcomes, rewards and other incentives can be
effectively used to heighten an employee's intrinsic motivation.
To achieve this, there are 6 levers to pull:
1. The amount of challenge given to employees, ie matching employees to the right assignment
so that they are stretched but not overwhelmed
2. The degree of freedom granted regarding the process but not necessarily the ends (the
goals). This can be mismanaged by changing the goals too frequently or goals not being clearly
defined or paying mere lip service to autonomy and empowerment.
3. Provision of adequate resources, such as time, money and physical space. Time can be
mismanaged with fake deadlines or impossibly tight ones. At times, the right physical space is
given increased attention while the more important actions, such as matching people to the
right assignments and granting freedom around work processes, are neglected
4. The design of work groups, ie must create mutually-supportive groups with a diversity of
perspectives and backgrounds - different expertise and creative thinking styles so that ideas
often combine and combust inexciting and useful ways. In addition to diversity, the group must
share excitement over its goal, and individuals must display willingness to help team-mates
through difficult periods and setbacks.

5. The level of supervisory encouragement , ie to sustain intrinsic motivation, supervisors

have to actively encourage the creative environment and have open minds, despite the
uncertainty of the possible gains from creativity.
6. The nature of organisational support, ie an organisation, especially the senior management,
must ensure that people are assigned correctly, that the appropriate systems or procedures are
in place and that values encouraging creative efforts such as rewards and recognition.

Characteristics of creative people

1. Open minded

Being narrow-minded is not conducive to creativity, but being open-minded is. Creative people
need to maintain an open mind, so they can absorb different perspectives, opinions, and ideas,
and use them to inspire their own work.

2. Empathetic
Part of being open-minded and mindful as a creative person also involves being sensitive to
emotions, thoughts, and experiences. Creative people are often highly empathetic, and capable
of understanding the emotions of others, thanks to a strong sense of emotional intelligence.
They’re good listeners, and they’re adept at sensing things others might miss.

3. Highly intelligent

Research shows creative people tend to have a high IQ, which is the most common
measurement we have of intelligence. While intelligent people aren’t guaranteed to be more
creative (personality traits and genetics also play a part), they are more capable of
understanding the connections between different concepts which others may overlook.

4. Exceptional focus & Night owl tendencies

While creative people are often seen as having a playful and eccentric attitude, they can also
have a high level of focus, discipline, and determination. Because they’re passionate about
what they do in life, whether it’s woodworking, painting or writing, creative people tend to
become honed in on certain pieces of work. This means they’re more likely to finish tasks on
time, and keep pushing forward through challenging or difficult periods.

5. Intuitive

An intuitive person makes decisions based on feelings—creative people may tap into this
ability more than other people. They trust in themselves to follow their hearts, rather than
feeling restricted by more logical demands. Intuition may not always lead to the perfect
solution, but it is a helpful tool when brainstorming and generating ideas.

6. Independent

Working independently allows creative people to embrace their personal freedom. They can
make their own decisions on how to do things, without instruction or demands from others.
Often, this independent nature also means creative people feel comfortable taking on
challenges themselves. With their freedom, they can take as long as they need to understand
the task and how to complete it. They may even see these challenges as opportunities to grow
professionally and develop their skills.
 7. Sensitive

Due to their open nature, creative people also tend to be sensitive. This sensitivity can help
them in many areas of life, both personally and professionally. Sensitive people tend to appear
more approachable to others and willing to listen to their thoughts or feelings. Through caring
about how others feel, they often have an easier time building strong and trusting relationships.
Their sensitivity can also increase their awareness of the issues around them, which sometimes
can cause them to care even more about solving them.

8. Energetic

Creative people may often be energetic—this does not mean they appear hyperactive, but they
put a lot of energy into their work. They often feel passionate about tasks and show their
enthusiasm when performing them. When creative people put their full energy into something,
it can lead them to focus on it for hours until they complete it. However, they always bring
their passion, so the work does not necessarily feel like work. Instead, they may gain
enjoyment or satisfaction from their experiences.

Sources Of New Ideas

1. Customers

Prospective customers know best what they want and the habits/tastes that will be popular
shortly. New product or service ideas may come from customers’ reactions to the present
product and the expected product idea. The attention to the customers can take the form of
informally monitoring potential ideas and needs or formally arranging surveys among
prospective customers.

2. Existing organization

Competing products and services of existing organizations and evaluation thereof is a

successful source of new ideas. Frequently, this analysis uncovers ways to improve on these
offerings, resulting in a new product that has more market appeal. The analysis of profitability
and break-even level of various industries or organizations indicate promising investment
opportunities which are profitable and relatively risk-free.

The analysis of profitability and break-even level of various industries or organizations indicate
promising investment opportunities which are profitable and relatively risk-free.
3. Distribution channels

Member of the distribution channels; intermediaries, transient customer preference, and

possible expectations may be a good business idea.Not only do channel members frequently
have suggestions for completely new products, but they can also help in marketing the
entrepreneur’s newly developed products.

4. Government

The government can be a source of new product ideas in many ways.First, the files of the
Patent Office contain numerous new product possibilities. They can suggest other more
marketable new product ideas.Secondly, new product ideas can respond to government
regulations, industrial policy, investment guidelines, annual plan, Five-year plan, etc.

Thirdly, several government agencies nowadays assist entrepreneurs in discovering evaluating

business ideas.

5. Research and Development

The entrepreneur’s own “research and development” is the largest source of new ideas. It may
be a more formal endeavour connected with one’s current employment or an informal
laboratory in the private premises.

Formal institutional research and development are often better equipped, enabling the
entrepreneur to conceptualize and develop successful new product ideas.

Techniques for Generating Ideas

1. Brainstorming

It is the best-known and most widely used tool of creative thinking. In a short period, it
generates many ideas. There is no place for criticisms and prior judgement of any idea. It is one
of the idea generation techniques. It can be done both individually and in groups. This tool uses
one idea to stimulate other ideas. In the end, mix all ideas & generate one best idea. It is one of
the methods of generating new ideas for entrepreneurs.

2. Mind Mapping

It is another highly effective tool which is quite similar to brainstorming. It is the best methods
to generate new ideas for business. It involves putting brainstormed ideas in a visual map or
picture or a graphical presentation showing the relationship among these ideas. It is one of the
techniques for generating ideas.
3. SCAMPER

It is a tool for generating ideas that work well with other diverging tools, mainly when a group
has trouble generating new ideas or when all the ideas seem very similar.

S- Substitute- What can you substitute for it?

C- Combine- What can be combined with it?
A- Adapt- What else is like this?
M- Modify- Could we change an existing idea or product?
P- Put to other uses- How can I use this new way?
E- Eliminate- What can be omitted or eliminated?
R- Reverse- Could I do the opposite?

4. Collaboration

As the term indicates, collaboration involves two or more people joining hands to work for a
common goal. Designers frequently work in groups and engage in collaborative creativity
during the whole creative process. It is one of the methods of generating new ideas for
entrepreneurs.

5. Role Playing

In the role-playing methods of generating new ideas for entrepreneurs, each participant can
take on a personality or role different from their own. As the technique is fun, it can help
people reduce their inhibitions and come out with unexpected ideas.

6. Forced Connection

It takes some information by forcing novel thinking. A businessman can use it on their own or
as a part of a brainstorming or brain-writing session. This tool facilitates holding up or pointing
to an object unrelated to the problem. It is a practice of combining new ideas that don’t appear
in relation in any way. However, it is the methods of generating new ideas for entrepreneurs.

Innovative and the entrepreneurs

Innovation and entrepreneurship are distinct yet interconnected concepts that play vital roles in
the success of businesses. Some may think they mean the same thing, but using them
interchangeably is an error. While they center around the same idea, it is important to
understand their differences.

Innovation is the embodiment of creative thinking, driving the development of unique solutions
and ideas. It encompasses the introduction of technological or digital advancements that unlock
new possibilities and capabilities. Serving as the backbone of every organization, innovation is
imperative for success. Businesses that neglect to cultivate an innovative culture put
themselves at risk of being outpaced by their more forward-thinking competitors.
Entrepreneurship revolves around the ability to identify and seize business opportunities, while
innovation centers on transforming those opportunities into reality.

To stay relevant in their respective industries, companies require the synergy of both
entrepreneurs and innovators. While business entrepreneurs possess the vision to make
strategic decisions, it is the innovator who possesses the expertise to effectively execute those
decisions and drive towards a shared goal.

Steps of Innovation Process –

Step 1: Idea Generation And Mobilization –

New ideas are created during idea generation. Successful idea generation should involve the
pressure to compete and the freedom to explore. Mobilization occurs when the idea is moved to
a different logical or physical location.For instance, how Apple waited three years after MP3
players were introduced to create the iPod, which was attractive, intuitive, and offered capacity
for up to 1,000 songs.

Step 2: Advocacy And Screening –

Advocacy and screening help to evaluate the feasibility of a business idea with its potential
problems and benefits.Hence, a decision can be made about an idea’s future. Companies
looking to develop a culture can establish a few best practices.For instance, Employees should
have plenty of avenues to receive advocacy and feedback. Also, organizations must understand
the difficulties involved in evaluating truly innovative ideas. Also, organizations need to build
transparent evaluation and screening protocols.

Step 3: Experimentation –

The experimentation stage tests the sustainability of ideas for an organization at a specific time.
Experimentation generates new ideas with the information that is gathered on the results and
feasibility of the original idea.

For instance, when Amazon tested its grocery delivery service in certain Seattle suburbs. After
this, Amazon Fresh expanded to Los Angeles, San Diego, and New York City.

Step 4: Commercialization –

Commercialization develops market value for an idea by focusing on its impact. An important
part is establishing the specifications of any given idea.Commercialization is the stage that
involves the change of focus developments to persuasion. After the idea is clarified and a
business plan is developed, it will be ready for diffusion and implementation.

Step 5: Diffusion And Implementation –

Diffusion is the company-wide acceptance of an innovative idea, and implementation sets up
everything needed to develop the innovation.

Diffusion and implementation allow the organization to determine the next set of needs for
customers. Receiving feedback, indicators for success metrics, and other benchmarks enable
the organization to stimulate the innovation process.

The 4 Types of Innovation

1. Incremental Innovation
Existing Technology, Existing Market

One of the most common forms of innovation that we can observe. It uses existing
technologies within an existing market. The goal is to improve an existing offering by adding
new features, changes in the design, etc.

Example

The best Example for incremental innovation can be seen in the Smartphone market where the
most innovation is only updating the hardware, improving the design, or adding some
additional features/cameras/sensors, etc.

2. Disruptive Innovation
New Technology, Existing Market

Disruptive innovation is mostly associated with applying new technologies, processes,

or disruptive business models to existing industries. Sometimes new technologies and business
models seem, especially in the beginning, inferior to the existing solutions but after some
iterations, they surpass the existing models and take over the market due to efficiency and/or
efficacy advantages.

Examples

Amazon used Internet-Technologies to disrupt the existing industry for book-shops. They had
the existing market for books but changed the way it was sold, delivered and experienced due
to the use of disruptive technologies. Another example was the iPhone, where existing
technologies in the market (Phones with buttons, keypads, etc.) were replaced with touch-
interface-centered devices combined with intuitive user interfaces.

3. Architectural Innovation
Existing Technology, New Market
Architectural innovation is something we see with tech giants like Amazon, Google, and many
more at the moment. They take their domain expertise, technology, and skills and apply them
to a different market. This way they can open up new markets and expand their customer base.

Examples

Especially digital ecosystem orchestrators like Amazon and Alibaba use this innovation
strategy to enter new markets. They use existing expertise in building apps, platforms, and their
existing customer base to offer new services and products for different markets. A recent
example for this: Amazon recently entered the medical care field.

4. Radical Innovation
New Technology, New Market

Even it is the stereotypical way most people see innovation; it is the rarest form of them all.
Radical innovation involves the creation of technologies, services, and business models that
open up entirely new markets.

Example

The best example of radical innovation was the invention of the airplane. This radical new
technology opened up a new form of travel, invented an industry, and a whole new market.

Major misconceptions of innovation

The term “innovation” gets tossed around a lot these days. It shows up in blog posts, speeches,
articles, and memes. Is it just a catchword? Is it used merely to get our attention and then direct
us toward something else?There’s a good reason we’re hearing this word so much. We are
living in a time of change, alteration, revolution, upheaval, transformation, metamorphosis and
breakthrough (by the way, this is a thesaurus-generated list of synonyms for the word
innovation).

But let’s talk about misconceptions about innovation. What is innovation not?

It’s the Same as Creativity

There’s a big difference between creativity and innovation, but sometimes these words are used
interchangeably. Creativity generates ideas, yes, but innovation requires that those ideas
actually get implemented successfully. Creativity is thinking about a way to deliver a product
over the Internet; innovation is actually making it happen. Additionally, creativity can be low-
impact. I can be very creative in my personal sketchbook, but my personal sketchbook is not
going to change my community at large. Innovation changes things.
It’s Limited to a Select Group of People

Sometimes people get the idea that innovation happens in labs by a select group of people in
lab coats. Sometimes that’s true. More often than not innovation happens out in the field or on
the shop floor. Innovation is about making your company efficient, sustaining, and disruptive.
It can be the result of the efforts of any person in your organisation or the efforts of a group of
people who work together to make important changes.

It’s Big and Loud

Innovation often happens in increments rather than in large changes all at once. A steady push
toward innovation means that you’ll make baby steps toward something that may appear to be
big at some point, but the process will likely be slow, steady, and incremental. Have patience,
but keep trying for greater efficiency, bigger markets, and loftier goals. Evolution, not
necessarily revolution.

It’s Expensive

The truth is that innovation doesn’t have to cost anything at all. Yes, some kinds of innovation
can be costly, but many innovations simply require a change in the way you operate. If your
business can’t afford to innovate through new technological systems or expensive marketing,
try innovating with changes in management structure, changes in the tone of your branding and
content, and even changes in the way sales reps talk to prospects.

It’s Not Relevant to My Business

This may be the biggest misconception of all.It’s important to remember that innovation is not
the sole domain of tech companies. Any kind of organisation can benefit from innovation. It’s
what keeps businesses flexible, agile and poised for growth. Whether your business builds
robots, groom’s pets, installs windows, or sells insurance, consistent innovation is one of your
most effective tools.

The Principles of Innovation

Drucker formulated his "Principles of Innovation" which consisted of the following:

1. Analyze the Sources of Innovation for Opportunities

2. Determine Customer Needs, Wants and Expectations

3. Innovation Should Be Simple and Focused

4. Innovation Should Start Small

5. Innovation Should Aim at Leadership

Start-ups

Startups are companies or ventures that are focused on a single product or service that the
founders want to bring to market. These companies typically don't have a fully
developed business model and, more crucially, lack adequate capital to move onto the next
phase of business. Most of these companies are initially funded by their founders.

Start-ups in India

As of the beginning of January 2022, India has recognized more than 61,000 startups, thus
having the 3rd largest startup ecosystem after the US and China. The government of India
has an initiative called Startup India, whose sole purpose is to bring about startup culture
and build an ecosystem for entrepreneurship and innovation.

As a result, the startup ecosystem in India has emerged as a major growth engine for the
country in the past few years and aims to become a global tech powerhouse. Many Indian
startups are booming and favouring the younger generation to work and gain experience in
their fields of interest. Some of the most well-known startups in India include Flipkart, Ola,
and Zomato, among many others.

1. Cred

Started in the year 2018 in the city of Bangalore, Cred was founded by Kunal Shah and is
one of the top startups in India. It is a platform where one is rewarded with "cred coins" for
paying their credit card bills. These coins can be later redeemed for various discounts and
offers.

2. PharmEasy

Founded by Dharmil Sheth, Dhaval Shah, and Mikhil Innani in the year 2015, PharmEasy is
a Mumbai-based startup focusing on the health care, diagnostics, and pharmaceutical
industries.It is an online medical store that has everything one could imagine in an actual
medical or pharmacy store — OTC products, medical instruments, and even diagnostic
tests! PharmEasy helps patients connect with local diagnostic centres, assists with medicine
delivery, and takes care of other medical needs.
 PharmEasy has had tremendous growth since the COVID-19 pandemic, gaining popularity
and even becoming an essential service today.

3. Digit Insurance

Specialising in general insurance, Digit Insurance was founded in the year 2016 by Kamesh
Goyal, Philip Varghese, Sriram Shankar, and Vijay Kumar. The startup's main industries of
focus are finance and insurance. Based in Bangalore, its mission is to simplify insurance
products for everyone, reimagine products and redesign the process. Building simple and
transparent insurance solutions that matter to the people is one of their main goals.

Digit Insurance has bagged many prestigious awards, including Hottest Startup in India -
2019, Asia's Best general Insurance Company of the Year - 2019, and more.

4. Groww

Groww is a Bangalore-based startup founded in the year 2017 by Harsh Jain, Ishan Bansal,
Lalit Keshre, and Neeraj Singh. The founders developed Groww for it to be used as both a
mobile application and on the web. The idea of the startup came after the founders found out
how difficult it was to invest for a common man in India.

Startup failure and reasons

Starting a business is a lot harder than most people think. Rarely is a business so in tune with
its niche that it can float along with minimal effort. But why do so many businesses fail? For
that matter, how many of them actually do fail? The reasons run deep, but here is what you
should know before starting your own business.

Money Ran Out: This widely given reason doesn’t really explain why a business failed. The
money ran out because it stopped coming in, so why did the cash flow dry up? Was it due to
poorly managed costs or because sales weren't high enough? Money running out also relates to
an inability to obtain financing or further financing needed to sustain a business, especially in
the early days, until a business can start generating profits.

Wrong Market: Too many people try to start a business targeting everyone as
their demographic. This doesn’t work out well. Next, they try to target everyone in their town.
Again, too broad. The more narrowly defined your niche is, the easier it will be to market to
the right audience.
 Lack of Research: You have to know what your customers want. Too many would-
be entrepreneurs go into the market thinking they have a great service or product to offer, but
they fail to realize that nobody wants that service or product. By doing your homework and
researching your market, you will know exactly how to meet your potential customers’ needs.

Bad Marketing: It could be said that a business boils down to two aspects: marketing and
bookkeeping. If you excel at both, it doesn’t matter what you are selling or offering because
someone will buy it. The sad truth is that most entrepreneurs know their craft and little else.
Instead of fumbling through your marketing campaign, hire out that aspect of your business.

Bad Partnership: Often, when starting a business, a partner is needed. One of you is an
expert in one area, and the other is an expert in another one. Your ideas for the company will
conflict, and without a clear resolution, it starts internal strife. You work harder and your
partner works less, but your partner thinks they are working harder than you. Ultimately, the
business dissolves because the partnership didn’t work.

How to Avoid Failing

It seems that most businesses are destined for failure. But there are key points to not becoming
one of the 20% that fails right off the bat.

Set Goals: Know exactly where you need to be and where you want to be. Without a goal,
you’re just wandering aimlessly.

Research: Know everything about your market. Know what customers want. Know that they
will pay $9 but not $10. Know their incomes, their desires, and what makes them tick. The
more you know, the more you can pitch to them.

Love Your Work: If you don’t love what you do, it will show. You must be passionate about
your business, or it will just be a job.

Don’t Quit: No matter how great of a business you have, you are going to have
downtimes. There will be periods when things are dragging along and you question your
decision to embark on this path. This is a time to put in extra hours, press harder, and make it
work.

The Bottom Line

Many startups fail within the early years, indicating that many things need to go right for a
business to succeed. Fortunately, you can be one of the 80% that thrive in the first year.To do
this, you need to follow the tips outlined above, and, most importantly, you have to test your
idea, do your homework, and make sure it will work before you jump in with both feet.
 Unit-3

Legal Aspects for Setting up a Business in India

Introduction
In India, several legal laws are mandatory to run a business effectively. They are considered
to be indispensable, and these basics help to embark on a successful business journey.

For years, these laws governing every commercial startup have been imperative as they
reflect the understanding and the policy hierarchy of the country’s business law and the
Government. The legal aspects of Business ensure that the statutory structure of the country
is parallel to the business framework.

The Companies Act of 1956 regulates the factors that identify an organization and its
obligations.

Legal structure and selection of a Business

 The initial step is to decide what type of Business is to be commenced. The owners
and founders have to form a mutual decision about the specific business type, such as
public limited, private limited, sole proprietorship, partnership, limited liability
partnership, etc.
 The type is selected at the beginning to ensure the business can set its objectives and
goals accordingly and can take prompt actions in the short /long term.
 Before incorporating any business or organization, it is very crucial to understand and
acknowledge that each type has its own set of instructions and regulations, which are
to be followed accordingly. The legal aspects of Business are introduced as the base
of any organization.
 It is preferable to have a founder’s agreement as its first step. It is a document that
outlines the roles, duties, obligations, exit clauses, and operational and executional
details of a company and its owners.
Choosing a Business
Prior to starting a business, the Entrepreneur must have a vision for the proposed business. A
vision could be as simple as a plan of action to starting a business in the mind of the
Entrepreneur or could even be a detailed business plan with market analysis, projected
financial statement, etc.

Business Entity Registration

The first step in starting a business in India is deciding and choosing a business entity.
Choosing a business entity is akin to choosing a vehicle for a journey. If a long journey is
expected, it is best to opt for a car. Similarly, if a medium to large-sized business is
envisaged, it is best to incorporate a Private Limited Company. On the other hand, if the
business envisioned is micro or small, it would be wise to start a Limited Liability
Partnership (LLP) or Proprietorship.

Bank Account Opening

Opening a bank account in the name of the business is one of the first tasks to be completed
after incorporation of the business entity. Corporate entities like LLP, Private Limited
Company, One Person Company and Limited Company are allowed to open a bank account
in India by submitting a copy of the Certificate of Incorporation and PAN Card of the entity.
Tax Registration
Based on the type of activity proposed by the business or vendor criterion or customer
requirements, various tax registrations may be required for the business, as follows:

GST Registration: GST registration is mandatory for any person or entity if the turnover is
over Rs.20 lakhs in most states.

TAN Registration: TAN Registration is mandatory for tax deduction at source (TDS).
Therefore, TAN Registration may be required while hiring employees or dealing with certain
customers or vendors.

ESI Registration: ESI Registration will be mandatory when the number of employees in the
business crosses 20. Proof of ESI Registration is often requested by businesses that outsource
manpower requirements.

Legal Aspects Of Business In India

Choosing Business Licence

 For running a business smoothly and efficiently, licenses are a fundamental necessity.
Several licenses are available for businesses depending on their scale and type.
 In the legal aspects of Business, it is mandatory to obtain the required licence
beforehand to avoid unnecessary lawsuits or business altercations.
 Business law is introduced to help an organisation operate freely. The Business must
be registered with the concerned official registrar to come into effect legally.
 The Shop and Establishment Act is applied to every Business where any trade,
service, or profession is exercised. There are various licences applicable that are under
the legal aspects of Business depending on the type of industry.

Some common licences are:

 Service Tax registration

 VAT registration
 Food Safety licence
 Health trade license
 Prevention of Food adulteration Act

Accounting and Tax Laws

 The legal aspects of business state that Certain business types have to pay taxes on
their operation depending on the scale and nature. There are state tax, local tax, or
central tax that applies to their working sector.
  The Government has recently announced the Startup India initiative that will promote
new business startups and exempt a few taxes on their operating sector.
 The book of account should be maintained comprehensively, with every record
entered on a timely basis to avoid future complications.
 Every legal aspect of Business mentions that ensuring the auditing of accounts
decreases the chances of account discrepancies. The invoicing and accounting can
also be made using different kinds of software online, which increases efficiency and
production.

Acknowledging Labour laws

Several labor laws are the legal aspect of Business that come into effect when an organisation
hires an employee under it for any duration. The owner or the founder must take legal
advice from the company lawyer to assess each law that applies to the company.
Acknowledging and understanding these labour laws are another legal aspect of Business.

Nine laws are applicable under the Startup initiative by the Government. These are

 The Trade Union Act, 1926.

 The Industrial Disputes Act, 1947.
 Building and other construction workers Act, 1996 (Regulation of employment and
service conditions.)
 The payment of the Gratuity Act, 1972.
 The Industrial Employment Act, 1946.
 The inter-state migrant workmen Act, 1979.
 The Contract Labour Act, 1970 (abolition and regulation.)
 The Employees State Insurance Act, 1948.
 The Employee’s provident fund and miscellaneous provisions Act, 1952.

Startups may also hire part-time employees or freelancers to complete the tasks; all the
policies should cover details of employment also. It helps in increasing productivity as the
employees stay loyal and morally boosted. The Government offers startup tax
exemptions and laws to facilitate the legal aspect of the Business.

Intellectual Property Protection

 Every Business has its intellectual property or trademark information which is secret
and very confidential. These include data, codes, contracts, algorithms, and any kind
of research finding.
 Many technologies and schemes have emerged to safeguard the company’s interest
which is subjective to the legal aspects of a business.
 The organization founder can nominate a power of attorney to formulate security and
envision the use of proper commercialization of the property.

Contract Management
  The contract ensures smooth running and avoids conflicts between the parties, who
are either founder or the owner. It helps to determine the terms and conditions of an
organization and acts as a crucial part of the legal aspects of Business in India.
 The management and contract have a lot of legal provisions to be followed, and they
can take legal advice from a company lawyer to understand the rules regarding the
legal aspects of a business.
 Non-disclosure contracts are also very necessary between an employee and the
company to keep information secure by prohibiting sharing of any kind of data or
sensitive information.
 The NDA should also be adapted in case the company has a power of attorney to
verify that the data will be safeguarded for the company.

Labour Law Reforms

Various legislative, administrative and e-governance initiatives have been taken by the
Central Government and State Governments to generate employment and to facilitate ease of
doing business. The various initiatives taken by the Central Government and State
Governments have been compiled and are as follows:
The Code on Wages
The Occupational Safety, Health and Working Conditions Code
The Code on Social Security
The Industrial Relations Code
Shram Suvidha Portal
Booklet- New Labour Code for New India

Safety Laws In India: –

1) Factories Act 1948
2) Mines Act 1952
3) Dock Workers (Safety, Health & Welfare) Act 1986
4) Building & Other Construction Workers’ Act 1996
5) Child & Adolescent Labour (Prohibition & Regulation) Act 1986
6) Contract Labour (Regulation & Abolition) Act 1970
7) Employees Compensation Act 1923

Major Types of Corporate Law

A company is designated as a separate entity in the eyes of law. In order to make sure that
this corporate veil does not lead to harm for anyone, there are several laws which ensure
protection of the interests of all the parties associated with its function. Given below is the
categorization of some of those major types of corporate laws in India:

1. Corporations Laws
A company is a legal entity, i.e. a person in the eyes of law which can sue and be sued in the
court of law. But what gives a company such legal status? And how is a company recognized
as one for its identity, functionaries, business, etc.? It is the Companies Act, 2013 which
provides for the incorporation, business objectives, management, who represents a company
and even the conclusion with the winding up process. For a company registered in
Kolkata, corporate lawyers in Kolkata may be of great help for understanding the
technicalities of a company’s functioning as per laws.

2. Laws of Contract
Since companies are engaged in some kind of goods or services while running a business
objective, transactions are an everyday task. For business, employment, incorporation, etc.
related arrangements, settlement of terms of such agreements is a must. The Indian Contract
Act, 1872 governs rules related to contract making in India. It provides for the basic
requirements for a valid contract to establish a legal relationship among natural and juristic
persons. There is another one - Sale of Goods Act, 1930 which lays several principles related
to customer and seller transactions. Companies hire corporations lawyer to help with contract
management, negotiation, review, etc.

3. Financial Market Regulation

Incorporation of a company leads to limited liability of people in charge of such an entity. To
keep things under control, some laws are there which regulate the market functioning related
to capital markets in India. The major players in market regulation are the Ministry of
Finance (Government of India), the Securities and Exchange Board of India (SEBI) and the
Reserve Bank of India (RBI). The major laws dealing with market regulation in India
include Securities and Exchange Board of India (SEBI) Act, 1992, Reserve Bank of India
Act, 1934, Foreign Exchange Management Act, 1999 and the Foreign Exchange Management
Act, 1999.

4. Securities Laws
Before jumping towards governing laws, it is important to understand what securities are. It
can be understood as the negotiable financial instruments having a certain financial value.
Some of the examples of securities in India are Shares, scrips, stocks, bonds, debentures,
debenture stocks etc. The major legislations dealing with regulating securities in India are -
Securities Contracts (Regulation) Act, 1956, Securities and Exchange Board of India (SEBI)
Act, 1992, and the Depositories Act, 1996.

5. Competition Laws
Monopoly in any field leads to unwarranted malpractices and wrongful gains which
eventually makes one a market controller. To avoid monopoly, the Competition Act, 2002
was introduced after replacing Monopolies and Restrictive Trade Practices Act,1969. The
objective of this law is to encourage competition in the market by restricting concentration of
economic power in the hands of a few.

Tax laws in India

Taxes in India are levied by the Central Government and the state governments. Some minor
taxes are also levied by the local authorities such as the Municipality.

Central Government of India

SL.
Taxes as perUnion List
No.

82 Income tax:Taxes on income other than agricultural income.

83 Custom Duty: Duties of customs including export duties

Excise Duty: Duties of excise on the following goods manufactured or produced in India
84 namely (a) Petroleum crude (b) high speed diesel (c) motor spirit (commonly known as
petrol) (d) natural gas (e) aviation turbine fuel and (f) Tobacco and tobacco products

85 Corporation Tax

Taxes on capital value of assets, exclusive of agricultural land, of individuals and

86
companies, taxes on capital of companies

87 Estate dutyin respect of property other than agricultural land

88 Duties in respect of succession to property other than agricultural land

Terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway
89
fares and freight.

90 Taxes other than stamp duties on transactions in stock exchanges and futures markets

Taxes on sale or purchase of goods other than newspapers, where such sale or purchase
92A
takes place in the course of inter-State trade or commerce

92B Taxes on the consignment of goods in the course of inter-State trade or commerce

All residuary types of taxes not listed in any of the three lists of Seventh Schedule of
97
Indian Constitution

State Governments
SL. Taxes as perState List
No.

Land revenue, including the assessment and collection of revenue, the maintenance of
45 land records, survey for revenue purposes and records of rights, and alienation of
revenues.

46 Taxes on agricultural income

47 Duties in respect of succession to agricultural land.

48 Estate Duty in respect of agricultural land

49 Taxes on lands and buildings.

50 Taxes on mineral rights.

Duties of excise for following goods manufactured or produced within the State (i)
51 alcoholic liquors for human consumption, and (ii) opium, Indian hemp and other
narcotic drugs and narcotics.

53 Electricity Duty: Taxes on the consumption or sale ofelectricity

Taxes on sale of petroleum crude, high speed diesel, motor spirit (commonly known as
petrol), Natural gas aviation turbine fuel and alcohol liquor for human consumption but
54
not including sale in the course of inter state or commerce or sale in the source of
international trade or commerce such goods.

56 Taxes on goods and passengers carried by roads or on inland waterways.

57 Taxes on vehicles suitable for use on roads.

58 Taxes on animals and boats.

59 Tolls.

60 Taxes on profession, trades, callings and employments.

61 Capitation taxes.

Taxes on entertainment and amusements to be extent levied and collected by a

62
panchayat or Municipality or a regional council or a district council.

63 Stamp duty

CONTRACT LAWS IN INDIA

The Indian Contract Act of 1872 is a comprehensive legal framework that controls all
commercial relationships in India. The act lays down the rules and regulations that need to be
 followed while entering into a contract and also provides remedies for breach of contract. It is
one of the oldest acts in India and has been amended several times over the years to keep up
with changing economic conditions.

The key provisions of the Indian Contract Act 1872 include:

 The offer and acceptance rule: This rule states that an agreement can only be formed when
there is an offer from one party and acceptance from the other party.
 Intention to create legal connections: According to this rule, the people signing the contract
must follow the law.
 Free consent: The act lays down the rules for determining whether or not there is free
consent between two parties.
 The capacity of parties: This provision states that every party who enters into a contract
must be competent enough to understand its implications and consequences, and must agree
to abide by them.

Consideration
Consideration refers to something which is offered in return for another thing. For example,
you may offer your services as payment for goods purchased from a store owner or vice
versa.

Contracts voidable at the option of one party:-

1. a) A contract can be cancelled if it was entered into under undue influence (e.g., force).
2. b) A contract can be cancelled if it was entered into under coercion (e.g., threatening to kill
someone).
3. c) A contract can be cancelled if one party is mistaken about the other party’s identity or vice
versa.
4. d) A contract can only be made voidable at the option of one party if both parties are not
aware of its contents before signing it. For example, you might buy a house without knowing
that there is asbestos in its walls and floors. In such cases, you may cancel your purchase
agreement because you were unaware that this could cause serious health issues for your
family members later on time – but only after making necessary enquiries with an expert
first!

Contracts voidable due to fraud:- A contract can be cancelled if it is found that one of the
parties has deceived the other party into agreeing.
 Unit -4

Business plan

A business plan is a documented strategy for a business that highlights its goals and its plans for
achieving them. It outlines a company's go-to-market plan, financial projections, market research,
business purpose, and mission statement. Key staff who are responsible for achieving the goals may also
be included in the business plan along with a timeline.

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to
execute it long term, secures financing from investors, and helps forecast future business demands.

Drivers of Business Plan

To identify the value drivers of company,it is best to conduct a SWOT analysis.

Business Plan Drivers.

Clear vision of purpose

Satisfy Real Customer Needs and Serve Real Customers

Differentiate from Competitor Resource Focus, Organisation and Commitment to Satisfy Customer
Needs

Types of Business Plan:

Business plans can be basically of two types:

Formal Business Plan: A detailed document mainly prepared for the purpose of ensuring outside finance
for the business.

Informal Business Plan: A rough plan which may contain hand-written notes helping the owners in the
daily functioning of a business and planning for expansions.

Basic Components of a Business Plan:

A formal business plan should state that the business will produce sufficient revenue to meet up the
expenses and will generate a mentionable profit for the investors. The basic components of a business
plan are briefly discussed below.

Executive Summary: It focuses on the objectives of the plan and the selling proposition in less than two
pages.

Summary of the Company: It provides an accurate illustration of the company, its ownership, and the
historical background.

Products or Services: This part gives a brief description of the products and/ or services and their merits
or strengths.

Analysis of the Market: It gives a summary of the existing customers, market size, competitive landscape
and probable growth of the market.

Marketing Strategy and Implementation: This section explains the marketing strategy of the products
and/ services and its implementation and future possibilities.

Summary of the Management: This part briefly summarizes the background, experiences and key
achievements of the management team.
Financial Projections: This section consists of financial statements such as balance sheets, income
statements, cash-flow statements and funding request (if required).

Reasons for failure of business plan

Big plans are drawn up, ideas are conceived, but when it comes to the real world application of making
the project work, it falls apart. If you understand some common reasons why business plans fail and why
projects fail, you can be prepared to face these issues and surmount them.

The planning process answers questions about your business.

Unachievable Goals and Aspirations

Setting high goals and having the best of intentions of making a business plan or a project work doesn’t
always turn out well in the real world. While it is important to have lofty goals, the path to achieving
these goals needs to be realistic and attainable. It is one thing to want to sell a million gadgets; it is quite
another to market those gadgets to the public and have them actually sell. In order to have a business
plan or a project succeed, it is necessary to have achievable goals and aspirations that can be met,
ideally within the first year or first few months of operation. If you have a lofty goal, that doesn’t mean
you have to scrap your plan – just that you need to set attainable goals along the way and be realistic
with your planning.

Lack of Market Research

Market research is a vital part of starting a new business or project. If you don’t fully understand the
competition and the current situation of your marketplace, you don’t have enough information to go
forward. Before a business plan is drawn up or a project is begun, thorough market research needs to
take place and the results need to be viewed realistically. If your niche is saturated, then you need to
come up with a plan that will set your business or project apart and help it succeed. Otherwise, your
voice will simply be drowned out in the crowd or never heard because there just isn’t a market for it.

Productivity and Motivation Issues

Entrepreneurs are known for their ambition and their drive to succeed. It is these two points that can
turn someone without a cent to their name into a multi-millionaire. But along the way determination to
succeed, and the ability to stay motivated even when the tide is turned against you, are vital to success
in the business world. This motivation needs to extend to employees of your business or members of
your team on a project. If they are not productive and motivated, the best idea in the world will not
succeed.

Improper Budgeting

Lack of real world budgeting is another important reason why business plans fail and why projects fail.
You won’t always be able to go to the bank for another loan to get your business or project off the
ground. Eventually, your funding may dry up if you cannot get your idea going in the right direction.
Research needs to be conducted ahead of time on the approximate cost of starting a business or a
project and keeping it running through the first year and through growing pains. Funding sources need
to be found ahead of time and eventualities need to be planned for before you get in too deep.

Growth Strategies for Ventures

Franchising is often used as a cost-effective growth strategy for businesses. A key benefit of this strategy
is that no capital layout is required for a new franchised store as opposed to corporate-owned
stores.Franchise consultants provide daily operational support to franchisees. They are responsible for
daily store visits to assist with quality checks, process flows, supplier relationships and, often, financial
assessments. They are a helpful soundboard on any improvements to be made in the business model
and can convey suggestions to the franchisor.

Businesses looking to expand through franchising should consider setting up several corporate-owned
stores first. This assures potential investors that your business is based on a proven model with a track
record and supportive infrastructure.

There is not always a one-size-fits-all model. Many franchisors have created custom models to
accommodate and adjust to the need of a specific property or consumer market. A great example of this
would be the food industry where many franchisors offer shopping centre concepts, drive thrus and
kiosk or express concepts. Consider this when developing your model.

Licensing

Companies with a strategic goal of increasing market share should consider licensing if they have a
proprietary product that can be manufactured easily at a foreign location. This is because licensing
provides an opportunity to rapidly increase the sales volume of a product. However, this increase
doesn’t result in large profits because returns are limited to a percentage of each product unit sold.

Companies that wish to expand into one or more markets with minimal risk and commitment will find
that licensing could be the best market entry strategy. The overseas licensee is responsible for all risks
and expenses involved with production, distribution and marketing. However, the licensing agreement
must be monitored and enforced if necessary. This is because it will not be possible for the company to
withdraw from the market rapidly. Licensing will not be suitable if the company cannot cope with the
risk that its intellectual property will be lost. Similarly, it also wouldn’t be suitable for companies
concerned with an increased level of competition in the future.

Joint Ventures

A strategic joint venture is a business agreement between two companies that make the active decision
to work together, with a collective aim of achieving a specific set of goals and increasing each company's
bottom line.Joint ventures are instrumental in helping companies establish a presence in a foreign
country or gain a competitive advantage in a particular market.
Joint ventures have helped numerous companies achieve access to emerging markets that they would
otherwise have difficulty breaking into.Through this arrangement, the companies effectively
complement one another’s strengths, while compensating for one another’s weaknesses. Both
companies share in the returns of the joint venture, while equally absorbing the potential risks involved.
Strategic joint ventures may be seen as strategic alliances, though the latter may or may not entail a
binding legal agreement, while the former does.

Unlike mergers and acquisitions, strategic joint ventures do not necessarily have to be permanent
partnerships. Furthermore, both companies maintain their independence and retain their identities as
individual companies, thus allowing each one to pursue business models outside the partnership
mandate.

Mergers and Acquisitions

Merger & Acquisition Strategy is the process undertaken in which one corporate buys, sells, or combine
with the other corporate to achieve certain specific goals of the market or to attain rapid growth in the
competitive market, taking into consideration different factors like market value of corporate’s stock,
the financial health of both the companies, threats of both the companies, new opportunities that can
arise along with market conditions.

Generally, the bigger companies in the market hunt for smaller companies for the acquisition process.
Companies have different policies for mergers & acquisitions like expanding an existing business,
research, development, etc. All these policies should be kept in mind while entering the M&A Strategy
by both companies. Failure to implement proper planning, study, and lack of strategies, also fails the
merger & acquisition strategy. The resulting company formed cannot survive in the long run. Hence,
proper planning, understanding of the market and the business of both the companies and proper
strategies should be done well in advance before implementing merger & acquisition strategies.
 Unit -5

Institute that facilitates Entrepreneurship & Entrepreneurship Development

National institute of MSME

Vision

To play an active role in MSME policy formulation and implementation in priority sectors aligned with
Sustainable Development Goals (SDGs).

Mission

To emerge as Centre of Excellence in Innovation and Entrepreneurship for sustainable growth of MSMEs
while conforming to national priorities for attaining global standards.

National Institute for Micro, Small and Medium Enterprises (ni-msme) is a national institute aimed to
foster the progress of micro, small and medium enterprises in India under Ministry of Micro, Small and
Medium Enterprises. NI-MSME is registered in Hyderabad, Telangana, under Public Societies
Registration Act I of 1350 Fasli with effect from 1 July 1962. The affairs of the Society are managed,
administered, directed and controlled through Governing Council constituted by the Government of
India as per Rule 22(a & b) of Rules and Regulations of the Society.

The Institute is a training ground for middle and senior level technocrats, bureaucrats, bankers,
potential entrepreneurs, trainers, educationists and Civil Society Organizations who come here to gain
knowledge and expertise for keeping abreast of cutting-edge management practices and streamline
their operations.

The Institute has been working in the areas of capacity building, research, skill upgradation, job
enrichment training in the field of Entrepreneurship and Skill including the development of women
pursuing small trades at the cottage industry level from an Incubation centre at NI-MSME.

National institute for Entrepreneurship and Small Business Development

NIESBUD is an apex organisation 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.

Recent Initiatives

SANKALP Project: The Institute with the support of Skill Acquisition and Knowledge Awareness for
Livelihood Promotion (SANKALP) Programme of the Ministry of Skill Development and Entrepreneurship
(MSDE) has undertaken project for creating, fostering and promoting the spirit of entrepreneurship
among the various target groups through Capacity Building, Incubation Support, Mentoring and
Handholding. Under this initiative, NIESBUD will train a total of 24,600 beneficiaries and provide them
mentoring and handholding support to start their enterprises/ scale up business activities/ linking them
with wage employment.

Entrepreneurship Development among Jail Inmates : NIESBUD is implementing a project for “Promoting
Entrepreneurship Development among Jail Inmates; value added skill up gradation, product innovation
& development; and Strengthening of Livelihood Business Incubation Centre at Jails of Uttar Pradesh”
with the support of Ministry of Skill Development and Entrepreneurship, for Creating, fostering and
promoting the spirit of entrepreneurship among the Jail Inmates through Capacity Building, Mentoring,
Handholding and Incubation Support. The programmes are being undertaken in the Nari Bandi Niketan,
Lucknow; Model Jail, Lucknow; and Varanasi Jail.

National Level Content Development: The institute is developing National Level Content on
Entrepreneurship Education with the support of Ministry of Skill Development and Entrepreneurship in
order to bring in uniformity in Entrepreneurship Development and have measurable learning outcomes.

Ministry of MSME

The Ministry of Micro, Small and Medium Enterprises is the ministry in the Government of India. It is the
apex executive body for the formulation and administration of rules, regulations and laws relating to
micro, small and medium enterprises in India. The Minister of Micro, Small and Medium Enterprises is
Narayan Rane.

The centre comes under the Government of India and has a Principal and a Vice Principal. The Ministry
regulates:

Khadi and Village Industries Commission

National Commission for Enterprises in the Unorganised Sector

National Small Industries Corporation Ltd.

National School of Leadership

National Institute for Micro, Small and Medium Enterprises

National Institute for Entrepreneurship & Small Business Development

Indian Institute of Entrepreneurship

Initiatives

Prime Minister Employment Generation Programme

It was launched as a central sector scheme in 2008–09 to promote self employment in the country
through setting up micro enterprises. It is a credit linked subsidy scheme in which loans up to 25 lakh for
manufacturing sector and up to 1000 Lakh for service sector is forwarded to the eligible beneficiaries for
which subsidy of up to 35% is provided to them.

The Khadi and Village Industries Commission is the implementing agency at the National level. The
individuals who are above the age of 18 years and are at least 8th pass, self help groups, Societies
registered under Societies Registration Act, 1860, Charitable trusts are all eligible to be beneficiary. Also,
only new projects are considered for sanction under the scheme.

Entrepreneurship Development Institute of India (EDI)

The Entrepreneurship Development Institute of India (EDI), an autonomous body and not-for-profit
institution, set up in 1983, is sponsored by apex financial institutions, namely the IDBI Bank Ltd, IFCI Ltd.
ICICI Ltd and State Bank of India (SBI).

The EDI has been selected as a member of the Economic and Social Commission for Asia and the Pacific
(ESCAP) network of Centres of Excellence for HRD Research and Training.

EDI’S mission is to become a catalyst in facilitating emergence of competent first generation

entrepreneurs and transition of existing SMEs into growth-oriented enterprises through
entrepreneurship education, training, research & institution building.

EDI has been spearheading entrepreneurship movement throughout the nation with a belief that
entrepreneurs need not necessarily be born, but can be developed through well-conceived and well-
directed activities.

In consonance with this belief, EDI aims at:

- Creating a multiplier effect on opportunities for self-employment,

- Augmenting the supply of competent entrepreneurs through training,

- Augmenting the supply of entrepreneur trainer-motivators,

- Participating in institution building efforts,

- Inculcating the spirit of 'Entrepreneurship' in youth,

- Promoting micro enterprises at rural level,

- Developing and disseminating new knowledge and insights in entrepreneurial theory and practice
through research,

- Facilitating corporate excellence through creating intrapreneurs (entrepreneurial managers),

- Improving managerial capabilities of small scale industries,

- Sensitizing the support system to facilitate potential and existing entrepreneurs establish and manage
their enterprises,

- Collaborating with similar organisations in India and other developing countries to accomplish the
above objectives.

National Entrepreneurship Network

National Entrepreneurship Network or NEN is a community dedicated to fostering entrepreneurship.

Services focus on providing institutional capacity building, entrepreneur support, entrepreneurial eco-
system and national platforms. Based on an idea by Romesh Wadhwani, and co-founded with Sunita
Singh, Nilima Rovshen, and Laura Parkin, the goal of the community is to enable new and future
entrepreneurs to access events and resources, share ideas and content, organize and market activities,
and forge relationships across India and the world.

National Entrepreneurship Network (NEN) launches ‘Dream to Destination (D2D)’ – A Women

Entrepreneur Development Program

– A Women Entrepreneur Development Program aimed at helping women entrepreneurs achieve their
business goals, especially in terms of fundability, scalability and revenue growth.

– Recent workshop organized by NEN at Bangalore on 7th & 8th March 2014 witnessed enthusiastic
participation of women entrepreneurs.

~ Aims to assist 100 high-potential women entrepreneurs across 5 cities.

~The program is handled by experts in the field of entrepreneurship.

~ Encouraged by the response from its Bangalore & Hyderabad (D2D) program, NEN is all set to reach
out to other cities.

~ Jointly offered in association with Aspen Network for Development Entrepreneurs (ANDE).

Bangalore, 24 March 2014: The Dream to Destination (D2D) program jointly offered by the National
Entrepreneurship Network (NEN) and the Aspen Network for Development Entrepreneurs (ANDE) aims
to help 100 high-potential women entrepreneurs improve the fundability, scalability and revenue
growth of their businesses through robust enterprise- development support.

National Entrepreneurship Network (NEN), the flagship initiative of Wadhwani Foundation has
conceptualized and spearheaded this initiative, leveraging its decade long experience in developing
successful entrepreneurs & profitable start-ups. The Dream to Destination program (D2D) is designed
for women entrepreneurs who own and actively run businesses with potential for growth.
The selection to the D2D program is through a careful scrutiny of applicants against a set criteria. This
exclusive women-only mentoring-cum-workshops (mentor-shops) has been planned in 5 cities –
Bangalore, Delhi, Kolkata, Jaipur and Hyderabad. These mentor-shops will equip the participants with
tools to grow their businesses and assess their needs and then draw up a development plan for each
participant. The selected entrepreneurs will receive support from NEN mentors and educators to
developed tailored programs that fit their needs and enhances their potential for scale-up.

The applications were received from a diverse group ranging from late twenties to late forties, from full-
time entrepreneurs to professionals turned entrepreneurs, and their business rangingfrom early stage
to growth stage with revenue slabs from Rs. 0 – 5 Lakh p.a. to Rs.1 crore and more. As far as industry
type is concerned majority was of the participants were from IT, Manufacturing, Retail, Education and
the rest from Biotech, Consulting, F&B and Hospitality.

NSTEDB

The National Science & Technology Entrepreneurship Development Board (NSTEDB), established in 1982
by the Government of India under the aegis of Department of Science & Technology, is an institutional
mechanism to help promote knowledge driven and technology intensive enterprises. The Board, having
representations from socio-economic and scientific Ministries/Departments, aims to convert "job-
seekers" into "job-generators" through Science & Technology (S&T) interventions.

Objectives:

To promote and develop high-end entrepreneurship for S&T manpower as well as self-employment by
utilising S&T infrastructure and by using S&T methods.

To facilitate and conduct various informational services relating to promotion of entrepreneurship.

To network agencies of the support system, academic institutions and Research & Development (R&D)
organisations to foster entrepreneurship and self-employing using S&T with special focus on backward
areas as well.

To act as a policy advisory body with regard to entrepreneurship.

To generate employment through technical skill development using S & T infrastructure.

The Programmes conducted by NSTEDB have created awareness among S&T persons to take up
entrepreneurship as a career. The academicians and researchers have started taking a keen interest in
such socially relevant roles and have engaged themselves in several programmes initiated by NSTEDB.
About 100 organisations, most of which are academic institutions and voluntary agencies, were drafted
in the task of entrepreneurship development and employment generation.
Wadhwani Centre for Entrepreneurship Development

Wadhwani Foundation is a not-for-profit with the primary mission of accelerating economic

development by driving job creation through large-scale initiatives in entrepreneurship, small business
growth, innovation, and skilling. Founded in 2000 by Silicon Valley entrepreneur Dr Romesh Wadhwani,
today, the Foundation is scaling impact in multiple countries across Asia, Africa and Latin America.

The Wadhwani Foundation works in partnership with governments, foundations, corporations, and
educational institutes through the below Initiatives:

Wadhwani Skills Network: Empowers millions of students with core and future job-ready skills to attain
sustainable family wages.

Wadhwani Entrepreneur Network: Inspires, educates and enables tens of thousands of start-up
entrepreneurs.

Wadhwani Advantage: Empowers thousands of small and medium size businesses with capabilities to
maximize their growth potential.

Wadhwani Institute of Technology and Policy: Leverages emerging technology for well-informed policy
formulation, implementation, and outcomes/impact measurement.
1. Define the term Entrepreneur? Explain various traits of
entrepreneurship?

(or)
2. Explain the concepts of investors and entrepreneurs in detail?

3. What do you meant by Creativity and Explain its various

components?
(or)
4. Explain the reasons for failure of Start-Up s and how it
manages during the down turn?

5 Define the term business and explain various procedures for

setting up a business in India?
(or)
6 What are the various procedures should be taken for starting a
business?

1. Explain different types of entrepreneurs?

(or)
2. Explain the social responsibilities of an entrepreneur?

3. Explain the techniques for generating ideas, innovation and

entrepreneur?
 (or)
4. Explain the role of Start-Up s in India?

5 Explain about the concept of legal aspects of business

(or)
6 What are the legal aspects governing business in India-IP law?
1. Explain the various laws governing business in India. L2 CO3 [6M]

(or)
2. Define business plan and explain the basics of business plan? L2 CO3 [6M]

3. Analyze the reasons of failure of business plan in detail. L4 CO4 [12M]

(or)
4. Explain the drivers of business plan. L1 CO4 [12M]

5 Discuss briefly about Wadhwani Centre for Entrepreneurship L2 CO5 [12M]

Development(WCED)
(or)
6 Explain briefly about Ministry of MSME and EDI.. L2 CO5 [12M]

1. 1.Explain the various legal aspects governing business in L2 CO3 [6M]

India.

(or)
2. Define Business plan and explain the drivers of business plan? L1 CO3 [6M]
3. Explain the various growth strategies of ventures? L2 CO4 [12M]

(or)
4. Analyze various reasons of failure for business plan? L4 CO4 [12M]

5 Explain briefly about National Entrepreneurship Network L2 CO5 [12M]

(NEN).
(or)
6 Explain briefly about National Institute for MSME, L2 CO5 [12M]
NIESBUD?
H.T.No: Course Code No: 20HS7T02

VISHNU INSTITUTE OF TECHNOLOGY:: BHIMAVARAM

(AUTONOMOUS)
III B. Tech I Semester Regular/Supplementary Examinations, March– 2022

Fundamentals of Entrepreneurship

Time: 3hours Max. Marks: 70M

Note: 1. Answer all the 5 Questions
2. Each Question carries 14 Marks
3. Answer either a or b from each question

UNIT – I
a Define the term Entrepreneur? Explain various traits of entrepreneurship? L2 CO1 [7M]
1
b What are the myths of entrepreneurship? Explain in detail? L2 CO1 [7M]
OR
a What are the ethics and social responsibilities of an entrepreneur? L3 CO1 [7M]
Explain the concepts of investors and entrepreneurs in detail?. L2 CO1 [7M]
b
2
UNIT – II
a What do you meant by Creativity and Explain its various components? L2 CO2 [7M]
3 b What do you meant by innovation and explain its process? L2 CO2 [7M]
OR
What do you meant by of Start-Up’s and explain various types of Start- L1 CO2 [7M]
a
Up’s?
4
Explain the reasons for failure of Start-Up’s and how it manages during L5 CO2 [7M]
b
the down turn?
UNIT – III
Define the term business and explain various procedures for setting up a L3 CO3 [7M]
a
5 business in India?
b What are the legal aspects governing business in India-IP law? L2 CO3 [7M]
OR
6 a Define business plan and explain the basics of business plan L2 CO3 [14M]

UNIT – IV
a Explain the drivers of business plan. L2 CO4 [7M]
7 b Analyze the reasons of failure of business plan in detail L4 CO4 [7M]
OR
a Explain the drivers of business plan L1 CO4 [7M]
 8 b Explain the various growth strategies of ventures? L2 CO4 [7M]
UNIT – V
a Explain briefly about Ministry of MSME and EDI.. L2 CO5 [7M]
9 Explain briefly about National Institute for MSME, NIESBUD? L2 CO5 [7M]
b
OR
a Explain briefly about National Entrepreneurship Network (NEN). L2 CO5 [7M]
10 Discuss briefly about Wadhwani Centre for Entrepreneurship L2 CO5 [7M]
b
Development(WCED)

*****