1

Entrepreneurship Development
Unit – 1: INTRODUCTION TO ENTREPRENEURSHIP

OBJECTIVES:
After studying this unit, you will be able to
 understand the meaning of Entrepreneur
 describe the Characteristics and Qualities of an Entrepreneur
 differentiate between Entrepreneurs and Intrapreneurs
 explore the difference between Entrepreneurs and Managers
 acquire knowledge on classification of Entrepreneurs
 analyse various factors influencing Entrepreneurship
 describe about Entrepreneurial Environment
 explain the concept of Entrepreneurial Growth
 understand about various Problems and Challenges of Entrepreneurs
 develop ideas about Entrepreneurial Scenario in India

1.1 UNDERSTANDING THE MEANING OF ENTREPRENEUR

Entrepreneur is an economic agent who plays a vital role in the economic development of a
country. Economic development of a country refers steady growth in the income levels. This
growth mainly depends on its entrepreneurs. An Entrepreneur is an individual with
knowledge, skills, initiative, drive and spirit of innovation who aims at achieving goals.
The word “Entrepreneur” is derived from the French Verb ‘entrepredre’. It means ‘to
undertake’
An entrepreneur is one who initiates and establishes an economic activity or enterprise.
Entrepreneur is a person who organizes productive recourses to make goods and services.
Entrepreneur is an organizer intending production, adding value to economy, creating new
business venture through his knowledge, passion, dreams and desires.

1.2 CHARACTERISTICS AND QUALITIES OF AN ENTREPRENEUR

Entrepreneur is a person who combines innovativeness, readiness to take risk, sensing

opportunities, identifying and mobilizing potential resources, concerns for excellence and
who is persistent in achieving the goal.
 2

To be successful, an entrepreneur should have the following characteristic features.

1. Need to achieve
2. Independence
3. Risk – bearing
4. Perseverance
5. Positive self-concept
6. Ability to find and explore opportunities
7. Hope of success
8. Flexibility
9. Analytical ability of mind
10. Sense of efficacy
11. Openness to feedback and learning from experience
12. Confronting uncertainty
13. Interpersonal skills
14. Need to influence others
15. Stress takers
16. Time orientation
17. Innovators
18. Business communication skill
19. Telescopic faculty
20. Leadership
21. Business planning
22. Decision making
23. Ability to mobilize resources
24. Self – confidence

Following are the potentials, which are necessary to make person to be a good entrepreneur

1. Knowledge of workers, customers and products

2. Close supervision
3. Good listener
4. Cool and fair
5. Responsibility
6. Self-assessment
 3

7. Bold
8. Trust and confidence
9. Fore seen problems

1.3.1 ENTREPRENEURS VS. INTRAPRENEURS

Entrepreneur is one, who commences his own business with his innovative ideas. He works
for himself and for profits. Intrapreneurs are on the other hand work for entrepreneurs. Both
the entrepreneur and intrapreneur are innovators and both perform the functions of
management. Yet they differ in the following ways;

SI.No Entrepreneurs Intrapreneurs

1. Entrepreneur is the owner of the Intrapreneur works for the business.

business.

2. Entrepreneur guarantees the money to No such guarantee is required to be given

suppliers. by the intrapreneur

3. Entrepreneur is one who bears full Intrapreneur does not bear any risks of
risks of his business. business.

4. Entrepreneurs operate from outside Intrapreneur operates from within the

an organization organization. He is an organization man.

5. Entrepreneur converts the ideas of Intrapreneur creates new ideas.

intrapreneur into reality.

1.3.2 ENTREPRENEURS VS. MANAGERS

SI.No Items Entrepreneur Manager

1. Aim An entrepreneur starts a Manager is to render his service in an
venture by setting up a new enterprise already set up by someone.
enterprise for his personal
gratification.
2. Status Entrepreneur is the owner of A manager is the servant in the
enterprise. enterprise.
3. Risk Bearer An entrepreneur bears all A manager being a servant does not
risks and uncertainty bear any risk involved in the
 4

involved in the enterprise. enterprise.

4. Rewards Entrepreneur for his risk A manager receives salary, as reward
bearing role he receives for service rendered which is fixed and
profits. It is not only regular can never be negative.
uncertain and irregular but
can at times be negative.
5. Innovation As an innovator, he is called A manager executes the plans of the
as change agent who entrepreneur. Thus, a manager
introduces goods and translates the ideas into practice.
services to meet changing
needs of the customer.
6. Qualifications An entrepreneur should Manager must have sound knowledge
possess the qualities like in management theory and practice.
high achievement motive,
originality in thinking,
foresight, risk bearing etc.

1.4 CLASSIFICATION OF ENTREPRENEURS

Following are the classification of entrepreneurs based on common characteristics

1.4.1 CLARENCE DANHOF CLASSIFICATION

1. Innovative
Innovative entrepreneur is one who assembles and synthesis information and
introduces new combinations of factors of production.
2. Imitative
Imitative entrepreneur is also known as adoptive entrepreneur. He simply adopts
successful innovation introduced by other innovators.
3. Fabian
The Fabian entrepreneur is timid and cautious.
4. Drone
These entrepreneurs are conservative or orthodox in outlook.

1.4.2 ARTHUR H. COLE CLASSIFICATION

 5

1. Empirical
He is an entrepreneur hardly introduces anything revolutionary and follows the
principle of rule of thumb.
2. Rational
The rational entrepreneur is well informed about the general economic conditions and
introduces changes, which look more revolutionary.
3. Cognitive
Cognitive entrepreneur is well informed, draws upon the advice and services of
experts and introduces changes that reflect complete break from the existing scheme
of enterprise.
1.4.3 CLASSIFICATION BASED ON OWNERSHIP
1. Private

Private entrepreneur is motivated by profit and it would not enter those sectors of the
economy in which prospects of monetary rewards are not very bright.

2. Public

In the underdeveloped countries, government will take the initiative to share

enterprises.

1.4.4 CLASSIFICATION BASED ON THE SCALE OF ENTERPRISE

1. Small Scale
This classification is especially popular in the underdeveloped countries. Small
entrepreneurs do not possess the necessary talents and resources to initiate large scale
production and introduce revolutionary technological changes.
2. Large Scale
In the developed countries, most entrepreneurs deal with large-scale enterprises. They
possess the financial and necessary enterprise to initiate and introduce new
technological changes.

1.4.5 NEW CLASSIFICATIONS

1. Solo Operators
These entrepreneurs prefer to set up their business individually.
2. Active Partners
 6

Entrepreneurs of this type jointly put their efforts to build enterprise pooling
together their own resources.
3. Inventors
These entrepreneurs primarily involve themselves in Research and Development
activities.
4. Challengers
Entrepreneurs of this type take challenges to establish business venture as mark of
achievement.
5. Buyers
These entrepreneurs explore opportunities to purchase the existing units, which
may be seized or are in running condition.
6. Life timers
These entrepreneurs believe that business is the part and parcel of their life. They
have a strong desire for taking personal responsibility.

1.5 FACTORS INFLUENCING ENTREPRENEURSHIP

Entrepreneurship is influenced by four distinct factors: Economic development, Culture,

Technological development, Education

1.5.1 ECONOMIC FACTORS

Economic environment exercises the most direct and immediate influence on

entrepreneurship. This is likely because people become entrepreneurs due to necessity when
there are no other jobs or because of opportunity. The economic factors that affect the growth
of entrepreneurship are the following:

1. Capital: Capital is one of the most important factors of production for the establishment of
an enterprise. Increase in capital investment in viable objects results in increase in profits
which help in accelerating the process of capital formation.

2. Labor: Easy availability of right type of workers also effect entrepreneurship. The quality
rather than quantity of labor influences the emergence and growth of entrepreneurship. The
problem of labor immobility can be solved by providing infrastructural facilities including
efficient transportation.
 7

3. Raw Materials: It is one of the basic ingredients required for production. Shortage of raw
material can adversely affect entrepreneurial environment. Without adequate supply of raw
materials, no industry can function properly and emergence of entrepreneurship to is
adversely affected.

4. Market: The role and importance of market and marketing is very important for the growth
of entrepreneurship. In modern competitive world no entrepreneur can think of surviving in
the absence of latest knowledge about market and various marketing techniques.

5. Infrastructure: Expansion of entrepreneurship presupposes properly developed

communication and transportation facilities. It not only helps to enlarge the market, but
expand the horizons of business too.

1.5.2 SOCIAL FACTORS

Social factors can go a long way in encouraging entrepreneurship. The main components of
social environment are as follows:

1. Caste Factor

There are certain cultural practices and values in every society, which influence the actions of
individuals. These practices and value have evolved over hundreds of years.

2. Family Background

This factor includes size of family, type of family and economic status of family. Background
of a family in manufacturing provided a source of industrial entrepreneurship. Occupational
and social status of the family influenced mobility.

3. Education

Education enables one to understand the outside world and equips him with the basic
knowledge and skills to deal with problems. In any society, the system of education has a
significant role to play in inculcating entrepreneurial values.

4. Attitude of the Society

 8

A related aspect to these is the attitude of the society towards entrepreneurship. Certain
societies encourage innovations and novelties and thus approve entrepreneurs’ contributions.

5. Cultural Value

Motives impel men to action. Entrepreneurial growth requires proper motives like profit
making, acquisition of prestige and attainment of social status.

1.5.3 PSYCHOLOGICAL FACTORS

Many entrepreneurial theorists have propounded theories of entrepreneurship that concentrate

especially upon psychological factors. These are as follows:

Need Achievement, Withdrawal of Status Respect and Motives.

1.6 ENTREPRENEURIAL ENVIRONMENT

The entrepreneurial ecosystem can be described as a set of interconnected entrepreneurial
actors (both potential and existing), entrepreneurial organisations (e.g. firms, venture
capitalists, business angels, banks), institutions (universities, public sector agencies, financial
bodies) and entrepreneurial processes (e.g. the business birth rate, numbers of high growth
firms, levels of ‘blockbuster entrepreneurship’, number of serial entrepreneurs, degree of sell-
out mentality within firms and levels of entrepreneurial ambition) which formally and
informally coalesce to connect, mediate and govern the performance within the local
entrepreneurial environment.

1.7 ENTREPRENEURIAL GROWTH

The term entrepreneurial growth means organization plans to achieve its objective to grow
and expand a business by its quality, quantity, and turnover. Entrepreneurial growth can be in
terms of innovators, business developers, radicals, expanders, customers etc. An entrepreneur
who undertakes the risks and effort to grow the business will certainly have entrepreneurial
growth whereas the person who is not willing fails to achieve objectives.

1.8 PROBLEMS AND CHALLENGES OF ENTREPRENEURS

Every business is affected by externalities: economic business cycles, fluctuating interest
rates, inflation, trends in the labour market, interrupted supplies, government regulations and
unstable financial markets. External problems arise from factors beyond the control of th e
 9

entrepreneur, whereas internal problems are hardly influenced by external forces. However,
the problems of industries, whether small or otherwise are almost identical.
1.8.1 INTERNAL PROBLEMS
Entrepreneur’s idea
Faculty Planning
Poor project implementation
Inefficient management
Poor production
Poor quality
Marketing
Labour Issues
Inadequate finance
Ineffective organization
Lack of strategies
Lack of vision
Inadequate connections
1.8.2 EXTERNAL PROBLEMS
Infrastructural
Location
Power
Water
Communication
Financial
Capital
Working Capital
Long term Funds
Recovery
Marketing
Raw Material
Taxation
Industrial Regulations
Inspection
Technology
Government Policy
 10

1.9 ENTREPRENEURIAL SCENARIO IN INDIA

Entrepreneurship is on the rise in India. Every year more and more industries are coming in
addition to the already existing industries. Entrepreneurship has been on the rise as a global
phenomenon much before India began becoming sensitive to the development of
entrepreneurship. However the awareness towards the path of
entrepreneurship is now increasing in our own country, and as a matter of fact is seen
as one of the countries that is par excellence with the rest of the Asian countries as
far as growing entrepreneurship is concerned. There are sufficient opportunities in
small industries in India and such opportunities will transform India in the
coming future. For such transformation to happen there needs to be support both at the
governmental and non-governmental level. For the government it is important to
realize that the goal of small business owners will be to remain self-employed. Such
people may not need financial assistance but they will need marketing and legal assistance in
order to sustain themselves.

1.10 SUMMARY
In this unit, you have learnt meaning of Entrepreneur, Characteristics and Qualities of an
Entrepreneur; Difference between Entrepreneurs and Intrapreneurs, Difference between
Entrepreneurs and Managers; Classification of Entrepreneurs; Factors Influencing
Entrepreneurship; Entrepreneurial Environment; Entrepreneurial Growth; Problems and
Challenges of Entrepreneurs and Entrepreneurial Scenario in India.

1.11 REFERENCES
Bidyadhar Behera (2021) ‘Entrepreneurship Text and Cases’ Chennai: MJP Publishers.
Ghazala Urfi (2013), ‘Entrepreneurship Development and Management’. New Delhi: Axis
Books Pvt Ltd.
Hadole, S. M., Pawar, P. B., (2018) ‘Entrepreneurship Development and Communication
Skills’. New Delhi: Dominant Publishers & Distributors Pvt Ltd.
Kunal Mishra (2020) ‘Entrepreneurship Development in 21 st Century (Text and Cases)’
New Delhi: Sarup Book Publishers Pvt Ltd.
Mason, C., & Brown, R. (2014). Entrepreneurial ecosystems and growth oriented
entrepreneurship. Retrieved from The Hague,
Netherlands: http://www.oecd.org/cfe/leed/entrepreneurial-ecosystems.pdf
Prashant M. Patil (2021), ‘Entrepreneurship Development’. New Delhi: Swastik Publications.
 11

Rama Krishna Reddy Kummitha (2016), ‘Social Entrepreneurship working towards Greater
Inclusiveness’. New Delhi: SAGE Publications India Pvt Ltd.
Sinha, G. K., Rahul Singh (2017) ‘Skill Development & Entrepreneurship’. New Delhi:
Dominant Publishers & Distributors Pvt Ltd.
http://aujournals.ipublisher.in/p/55571
https://pressbooks.bccampus.ca/entrepreneurship/chapter/chapter-10-the-entrepreneurial-
environment/
https://www.igi-global.com/dictionary/entrepreneurial-
growth/69157#:~:text=The%20term%20entrepreneurial%20growth%20means,radicals%2C
%20expanders%2C%20customers%20etc.
QUESTIONS

1. The word “Entrepreneur” is derived from the ……. Verb

a) French
b) English
c) Latin
d) Spanish
Answer: French
2. To be successful, an entrepreneur should have the ……… characteristic feature
a) Perseverance
b) Independence
c) Flexibility
d) All of the above

Answer: All of the above

3. ………… is the owner of the business

a) Entrepreneur
b) Intrapreneur
c) Manager
d) Labour
Answer: Entrepreneur

4. ………. creates new ideas.

a) Entrepreneur
b) Intrapreneur
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c) Manager
d) Labour
Answer: Intrapreneur

5. A …………. executes the plans of the entrepreneur.

a) Entrepreneur
b) Intrapreneur
c) Manager
d) Labour
Answer: Manager
6. ……….. entrepreneur is one who assembles and synthesis information
a) Innovative
b) Imitative
c) Fabian
d) Drone
Answer: Innovative

7. These entrepreneurs are conservative or orthodox in outlook.

a) Empirical
b) Rational
c) Cognitive
d) Drone

Answer: Drone

8. ………… entrepreneur is well informed, draws upon the advice and services of
experts
a) Cognitive
b) Rational
c) Imitative
d) Fabian

Answer: Cognitive

9. These entrepreneurs believe that business is the part and parcel of their life.
a) Inventors
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b) Challengers
c) Buyers
d) Life timers

Answer: Life timers

10. These entrepreneurs explore opportunities to purchase the existing units, which may
be seized or are in running condition.
a) Inventors
b) Challengers
c) Buyers
d) Life timers

Answer: Buyers

Compiled by

Dr. P. Subramanian
Assistant Professor
Department of Educational Planning and Administration
Tamil Nadu Teachers Education University, Chennai – 600 097.
Unit – II: MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)
MSMEs – Definition and Significance in Indian Economy; MSME Schemes, Challenges and
Difficulties in availing MSME Schemes, Forms of Business; Women Entrepreneurship; Rural
Entrepreneurship; Family Business and First-Generation Entrepreneurs.
UNIT OBJECTIVES:
On completion of this unit, the prospective teacher educator will be able to:
1. acquaint with MSME enterprise functions and its role in nurturing entrepreneurs

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)

Introduction

MSME stands for Micro, Small, and Medium Enterprises. In accordance with the Micro, Small,
and Medium Enterprises Development (MSMED) Act in 2006, the enterprises are classified into
two divisions.
1. Manufacturing enterprises – engaged in the manufacturing or production of goods in any
industry
2. Service enterprises – engaged in providing or rendering services

Features of MSMEs

Here are some of the essential features of MSMEs

1. MSMEs are known to provide reasonable assistance for improved access to the domestic as
well as export markets for businesses
2. MSMEs support product development, design innovation, intervention, and packaging
elements of a business
3. MSMEs support the upgrading of technology, infrastructure, and the modernization of this
sector as a whole
4. MSMEs provide employment opportunities and loans
5. MSMEs provide credit limits or funding support to various banks in the country
Role of MSMEs in the Indian Economy

The MSME sector has proven to be a highly dynamic factor in the forecasting of the Indian
economy. Since MSMEs produce and manufacture a variety of products for both domestic as
well as international markets, they have helped promote the growth and development of various
product segments and industries.
MSMEs have played an essential role in providing employment opportunities in underprivileged
areas. They have helped in the industrialization of such areas with a low capital cost compared to
the larger industries in cities. MSMEs have also contributed and played an essential role in the
country’s development in different areas like the requirement of low investment, flexibility in
operations, low rate of imports, and a high contribution to domestic production.

UPDATE: New MSME definition based on investment and turnover (2020)

On 1st June, Monday, the Union Cabinet headed by Prime Minister Narendra Modi officially
revised the MSME definition. The recent changes in the definition of micro, small, and medium-
sized enterprises made as a part of the Atmanirbhar Bharat Abhiyaan relief package were
approved.

The investment and turnover figures were changed to larger values, thereby resulting in a larger
number of medium-sized enterprises.

Updated MSME Definition

Type of enterprise Investment Turnover

Micro Rs 1 crore Rs 5 crore

Small Rs 10 crore Rs 50 crore

Medium Rs 50 crore Rs 250 crore

The government had revised the MSME definition earlier as well.

The new MSME definition (2020)

Investments will no longer characterize MSMEs.

On 13th May, Wednesday, the center officially revised the MSME definition.

In October 2019, Union Minister Nitin Gadkari had said that the revised definition of micro,
small, and medium enterprises may grant a unified description for all things related to taxation,
investment, and more.

The changed definition was to be implemented via an amendment that would further refine the
business scenario for Indian enterprises. The Union Cabinet had approved the amendment to
change the criteria to classify MSMEs from “investment in plant and machinery” to “annual
turnover.”
On 13th May 2020, Finance Minister Nirmala Sitharaman added the additional principle of
turnover along with the investment.

Revised MSME Classification

Composite criteria: Investment and annual turnover

Classification Micro Small Medium

Investment < Rs 1 Investment < Rs 10 Investment < Rs 20

Manufacturing & crore and turnover < Rs crore and turnover < Rs crore and turnover < Rs
services 5 crore 50 crore 100 crore
Key announcements of Atma-nirbhar Bharat Abhiyaan

 Rs 3 lakh crore collateral free automatic loans for MSMEs

 Rs 50,000 crore equity infusion through MSME Fund of Funds

 Rs 20 crore subordinate debt for MSMEs

 Extension of registration and completion date of real estate projects under RERA

 Immediate pending refunds issuance to all non charitable trusts

 Extension of the due date for ITR for FY’19-20 to November 30, 2020

Old MSME definition based on investment, MSMED Act, 2006

Manufacturing Sector

Enterprises Investment in plant and machinery

Micro enterprises < or = Rs 25 lakh

Small enterprises > Rs 25 lakh < Rs 5 crore

Medium enterprises > Rs 5 crore < Rs 10 crore

Services Sector

Enterprises Investment in equipment

Micro enterprises < or = Rs 10 lakh

Small enterprises > Rs 10 lakh < Rs 2 crore

Medium enterprises > Rs 2 crore < Rs 5 crore

Headquartered in New Delhi, the Ministry of MSME is a branch of the Indian Government,
which is the apex body for the formulation and administration of rules, and laws, pertaining to
micro, small, and medium-sized enterprises in the country.
Having created 11 crore job opportunities in India while contributing to the GDP by 29%, we
can say that MSMEs are the heart of the Indian economy. And the change in the definition will
enable Indian enterprises to carry out their businesses better.

The Major Challenges Faced By the MSME Sector:

Below is a list of some of the major challenges faced by MSMEs that have a significant
impact on their growth prospects:

1) Financial issues:

In the Indian economy, access to finance has always been an issue for smaller firms and
businesses. This is a major hindrance for businesses as well as the MSME sector. However, the
most disturbing fact about it is that only 16% of SMEs get access to timely finance, resulting in
small and medium firms being forced to rely on their own resources. It is not just small firms that
face this problem, but larger firms do as well because even those bigger players face significant
difficulties in accessing cheaper credit from formal banks.

2) Regulatory issues:

Several regulatory issues have been identified over time, including problems like tax compliance
and changes to labor laws which have ended up costing the MSME sector dearly. In an attempt
to make this sector more competitive among others, certain labor reforms were attempted some
years back. Still, they failed to make any dent in improving things for MSMEs despite making
them more competitive than larger firms. As a result, it has become very difficult for MSMEs to
comply with these regulations and register for tax compliance, which has resulted in many
operating on low capital or even shutting shops.
3) Infrastructure:

In India, the infrastructure sector is extremely important because we are often referred to as the
‘world’s back-office because so many works in this sector are carried out overseas. Applications
such as eCommerce and BPO have created more jobs in low-wage countries like India.

4) Low productivity:

MSMEs are not necessarily very productive, but they perform certain tasks that emit more value
than they produce. Retailers sell consumer goods to end-users at relatively lower prices. In fact,
MSMEs may be very productive only when it comes to being cost-efficient and are capable of
creating high volume at very low costs. But given that their production is on a small scale with
low margins, low productivity can put them at a disadvantage, especially when compared with
larger firms.

5) Lack of innovation:

Indian MSMEs are not very innovative, and the majority of the products that they produce are
based on outdated technologies. There is a severe lack of entrepreneurs in this sector, which has
prevented it from adopting new technologies and tools which have brought about significant
changes in other sectors like eCommerce and call centers, etc. As a result, MSMEs have had to
struggle with outdated technology as well as low levels of productivity, especially when
compared with larger firms.

6) Technical changes:

There has been no dearth of technical changes over time, and most industries have undergone
some form of change in order to remain competitive. As a result, Indian MSMEs have had to
deal with some very important changes which have affected their growth potential. At first, there
was a change in the ownership right of land, which has made the sector more prone to
mismanagement and, with it, a fall in productivity.

7) Competition:

Due to various factors, such as the rise of eCommerce and the advent of globalization, bigger
firms have forced MSMEs out of their markets. However, this is not new because MSMEs were
facing competition from year one, but they could fight it off successfully compared to
professional firms. In fact, MSMEs continue to face competition in many areas, including
agricultural machinery, garments, and tourism.

8) Skills:

When it comes to skills, Indian MSMEs are far behind their counterparts in other countries
because they depend heavily on the help of informal workers, who are not paid well and lack the
technical skills which can help enhance productivity. As a result, smaller firms are forced to take
up jobs that require low levels of skill and expertise, which further affects their growth prospects
in the long term.

9) Lack of professionalism:

A majority of Indian MSMEs lack professionalism despite being vital for larger industries’
growth. As a result, they are highly prone to corruption and abuse of power, which has a huge
impact on the productivity of their businesses.

10) Lack of standardized policies:

There are very few MSME policies in India. As a result, there is no consistency when it comes to
MSME development as well as entrepreneurship promotion programs. However, positive
progress has been made in Delhi over the years, but this needs to be done on a national level so
that Indian firms can become more competitive across the world for global companies and
investors.

SCHEME LIST FOR

WOMEN ENTREPRENEURSHIP; RURAL ENTREPRENEURSHIP; FAMILY

BUSINESS AND FIRST-GENERATION ENTREPRENEURS

Schemes Schemes Guidelines

https://msme.gov.in/sites/default/files/PMEGP%20guidelinesfinal.pdf
Prime
Minister
Employment
Generation
Programme(
PMEGP)

https://msme.gov.in/sites/default/files/PCRSchemeGuidelines.pdf
Performance
and Credit
Rating
Scheme

https://www.cgtmse.in/schemes.aspx
Credit
Guarantee
Trust Fund
for Micro &
Small
Enterprises
(CGTMSE)

https://msme.gov.in/sites/default/files/ISEC-Guideline.pdf
Interest
Subsidy
Eligibility
Certificate
(ISEC)

https://msme.gov.in/sites/default/files/Coir_Section_11.pdf
Science and
Technology
Scheme

https://msme.gov.in/sites/default/files/Khadi_MPDA_Guidelines.pdf
Market
Promotion &
Development
Scheme
(MPDA)

https://msme.gov.in/sites/default/files/SFURTI_GUIDELINES_REVISED.pdf
Revamped
Scheme Of
Fund for
Regeneration
Of
Traditional
Industries
(SFURTI)

http://coirboard.gov.in/
Coir Udyami
Yojana
(CUY)

https://msme.gov.in/sites/default/files/Latest%20guidelines-for-CVY.pdf
Coir Vikas
Yojana
(CVY)

https://msme.gov.in/sites/default/files/Coir-Vikas-YojanaContents.pdf
Skill
Upgradation
& Mahila
Coir Yojana
(MCY)

https://msme.gov.in/sites/default/files/Coir-Vikas-YojanaContents.pdf
Development
Of
Production
Infrastructur
e (DPI)

https://msme.gov.in/sites/default/files/Coir-Vikas-YojanaContents.pdf
Domestic
Market
Promotion
Scheme

https://msme.gov.in/sites/default/files/Coir-Vikas-YojanaContents.pdf
Export
Market
Promotion

https://msme.gov.in/sites/default/files/Coir-Vikas-YojanaContents.pdf
Trade and
Industry
Related
Functional
Support
Services
(TIRFSS)

https://msme.gov.in/sites/default/files/guidelines-zed-final.pdf
Financial
Support to
MSMEs in
ZED
Certification
Scheme

https://msme.gov.in/sites/default/files/ASPIRE-Guidelines-Final-03Jun15.pdf
A Scheme for
Promoting
Innovation,
Rural
Industry &
Entrepreneu
rship
(ASPIRE)

https://msme.gov.in/sites/default/files/CreditLinkCapitalSubsidyScheme%282%
Credit 29%282%29.pdf
Linked
Capital
Subsidy for
Technology
Upgradation

http://www.dcmsme.gov.in/publications/forms/ISO9form_old.htm
ISO
9000/ISO
14001
Certification
Reimbursem
ent

https://msme.gov.in/sites/default/files/MarkAssis.pdf
Marketing
Support/Assi
stance to
MSMEs (Bar
Code)

https://msme.gov.in/sites/default/files/guidelines%20lean.pdf
Lean
Manufacturi
ng
Competitiven
ess for
MSMEs

http://www.dcmsme.gov.in/schemes/DesignClinic.htm
Design Clinic
for Design
Expertise to
MSMEs

https://msme.gov.in/sites/default/files/technology_quality.pdf
Technology
and Quality
Upgradation
Support to
MSMEs

https://msme.gov.in/sites/default/files/incubators10.pdf
Entrepreneu
rial and
Managerial
Development
of SMEs
through
Incubators

https://msme.gov.in/sites/default/files/QMSQTT10.pdf
Enabling
Manufacturi
ng Sector to
be
Competitive
through
QMS&QTT

https://msme.gov.in/sites/default/files/Revised%20IPR%20Guidelines_5.pdf
Building
Awareness
on
Intellectual
Property
Rights (IPR)

https://msme.gov.in/sites/default/files/Revised-IC-
International Scheme%20Guidelines%2016.12.2016_New_06032017.PDF
Cooperation

https://msme.gov.in/sites/default/files/MASCHEME-New-18112014.pdf
Marketing
Assistance
Scheme

https://msme.gov.in/sites/default/files/MATU_30616.pdf
Marketing
Assistance &
Technology
Upgradation
(MATU)

https://msme.gov.in/sites/default/files/KVI_Policy_and_Establishment_Section_
MSME 58.pdf
Market
Development
Assistance
(MDA)

https://msme.gov.in/sites/default/files/PDF%20REVISED%20ATI%20GUIDEL
Assistance to INES%20English%201.9.2016%20%281%29.pdf
Training
Institutions
(ATI)
 http://www.dcmsme.gov.in/mse-cdprog.htm
Micro &
Small
Enterprises
Cluster
Development
(MSE-CDP)

http://www.dcmsme.gov.in
EDP/MDP
schemes

http://www.dcmsme.gov.in
NER
Schames

http://www.dcmsme.gov.in
TCSP
Schemes

Reference

https://razorpay.com/learn/new-msme-definition-turnover-2020

https://www.lendingkart.com/blog/major-challenges-faced-by-the-msme-sector-their-impacts

https://my.msme.gov.in/mymsme/Scheme.aspx
Unit – III: IDEA GENERATION AND FEASIBILITY ANALYSIS

INTRODUCTION

An idea is a concept, a recommendation, or a visual representation of a potential result

or course of action that can be used to further a specific objective. Ideas can be material or
abstract. Well-formed concepts that can be precisely articulated, stated, or implemented are
considered to be tangible ideas. Contrarily, intangible concepts are difficult for a person to
define or make sense of in their own minds. Idea creation is a creative activity that is used to
create fresh concepts or ideas as well as to transform abstract concepts into concrete ones.
The term "ideation" is another name for this process. Idea creation is generating a lot of ideas
in a collaborative context, figuring out how to use them, and then applying the ideas to actual
situationsare some ideas for entrepreneurship and development opportunities for students:

Online Tutoring Platform: Create an online platform where students can offer tutoring
services to K-12 students. They can specialize in specific subjects or offer general academic
support.
Educational Consulting Services: Students can provide consulting services to schools and
educational institutions, helping them improve their teaching methodologies, curriculum
development, and student assessment strategies.
Learning Management System (LMS) Development: Develop a user-friendly LMS tailored
specifically for educational institutions, providing features such as content management,
student progress tracking, and communication tools.
Professional Development Workshops: Organize workshops and training sessions for
teachers and educators, focusing on innovative teaching methods, classroom management
techniques, and educational technology integration.
Mobile Learning Applications: Create mobile applications that offer educational games,
quizzes, and interactive learning experiences for students. These apps can be designed to
cater to specific age groups or subjects.
Ed-Tech Product Reviews and Recommendations: Start a blog or website where students
review and recommend educational technology products, providing insights and suggestions
for their effective use in classrooms.
Curriculum Development: Collaborate with schools or educational publishers to develop
comprehensive and engaging curriculum materials aligned with the latest educational
standards and pedagogical approaches.
Parent-Teacher Communication Platform: Build a platform that facilitates seamless
communication between parents and teachers, allowing them to share updates, discuss
student progress, and exchange resources.
Educational Podcasts or Webinars: Launch a podcast or webinar series focused on
educational topics, inviting experts and experienced educators to share insights, strategies,
and best practices.
Specialized Education Services: Identify a niche area within education, such as special needs
education, gifted education, or adult learning, and offer specialized services like tutoring,
consulting, or resource development.
CREATIVITY AND INNOVATION
Creativity and innovation are essential skills for entrepreneurship development among
students. These skills can help aspiring entrepreneurs to identify unique opportunities,
develop innovative solutions, and differentiate themselves in a competitive marketplace. Here
are some ways to foster creativity and innovation in students for
entrepreneurshipdevelopment:

Encourage a diverse mind-set: Promote an environment that values diverse perspectives and
experiences. Encourage students to engage with different disciplines, cultures, and industries
to broaden their thinking and generate new ideas.
Problem-solving approach: Emphasize problem-solving skills by challenging students to
identify and address real-world educational issues. Encourage them to think critically and
come up with innovative solutions that can make a positive impact on the edu cation system.

Expose students to entrepreneurial role models: Invite successful entrepreneurs from the
education sector to share their experiences and insights with students. These interactions can
inspire and motivate students while providing practical insights into the entrepreneurial
journey.

Design thinking methodology: Introduce students to the design thinking process, which
involves empathizing with users, defining problems, generating ideas, prototyping, and
testing solutions. This iterative approach can help students develop innovative solutions by
understanding the needs of various stakeholders in the education sector.

Foster a supportive ecosystem: Create a supportive ecosystem where students can collaborate,
share ideas, and receive feedback from peers and mentors. This can be achieved through
entrepreneurship clubs, workshops, or incubation programs focused on education-related
ventures.

Incorporate interdisciplinary projects: Encourage students to collaborate across different

disciplines, such as technology, psychology, and business. Interdisciplinary projects can
stimulate creative thinking and foster innovation by combining ideas from diverse fields.

Provide resources and tools: Ensure that students have access to resources, such as librar ies,
maker spaces, and online platforms that support creative thinking and innovation. Equip them
with tools like brainstorming techniques, mind mapping software, and prototyping materials
to facilitate the development of their ideas.
Promote a growth mind-set: Emphasize the importance of embracing failure as a learning
opportunity and encourage students to persist in the face of challenges. Cultivate a growth
mind-set that promotes experimentation, risk-taking, and continuous learning.

Foster entrepreneurial skills: Alongside creativity and innovation, provide students with the
necessary entrepreneurial skills, such as business planning, market research, financial
management, and communication skills. These skills are essential for transforming creative
ideas into viable entrepreneurial ventures.
Showcase success stories: Highlight success stories of students who have turned their
innovative ideas into successful educational initiatives or start-ups. These stories can inspire
and motivate other students to pursue entrepreneurship.

IDENTIFICATION OF BUSINESS OPPORTUNITIES

Identifying business opportunities in entrepreneurship and development for students can be
an exciting and rewarding venture. Here are a few potential business opportunities that align
with the skills and knowledge gained through a program:
Educational Consulting: Students can leverage their expertise to offer consulting services to
schools, educational institutions, or even parents. They can provide guidance on curriculum
development, instructional strategies, assessment methods, and educational technology
integration. Additionally, they can assist with the implementation of educational policies and
programs.

Tutoring and Test Preparation: Students can offer tutoring services to students in various
subjects or specialize in test preparation for standardized exams like the SAT, ACT, GRE, or
GMAT. They can develop customized study plans, provide individualized instruction, and
help students improve their academic performance.
Educational Content Development: With their knowledge of educational theories and
practices, students can create educational content such as e-books, online courses,
instructional videos, or educational apps. These resources can cater to different age groups
and subjects, addressing specific learning needs and providing valuable educational materials
to students, parents, or teachers.
Professional Development Workshops: Graduates can organize workshops or training
sessions for teachers and educators. These sessions can focus on the latest teaching
methodologies, classroom management techniques, technology integration, or specific
subject areas. Professional development is highly valued in the education sector, and students
can offer their expertise to help teachers enhance their skills.
Academic Writing and Editing: Students can offer academic writing and editing services to
their peers or other individuals pursuing higher education. They can assist in writing research
papers, theses, or dissertations, and provide editing and proofreading services to ensure
clarity, coherence, and adherence to academic standards.
Educational Technology Solutions: Graduates can explore opportunities in educational
technology by developing innovative solutions. They can create educational apps, learning
management systems, or online platforms that facilitate distance learning, student
engagement, and personalized learning experiences.
Curriculum Development: Students can work with schools or educational institutions to
develop customized curricula tailored to specific needs, such as special education programs,
STEM (Science, Technology, Engineering, and Mathematics) initiatives, or multicultural
education. They can design comprehensive curriculum frameworks, lesson plans, and
assessment tools.
Early Childhood Education Centres: Graduates with a focus on early childhood education can
establish their own preschool or day-care centres. They can apply their knowledge of child
development, pedagogy, and curriculum design to create nurturing and enriching
environments for young learners.

MARKET ENTRY STRATEGIES

When considering market entry strategies for entrepreneurship development for students, it's
important to focus on ventures related to the education sector. Here are some strategies you
can consider:
Identify a Niche: Research the education market and identify a specific niche or problem that
needs addressing. This could be a particular age group, subject, learning style, or educational
technology.

Conduct Market Research: Gather data on potential customers, competitors, and trends in the
education sector. Understand the needs and preferences of your target market, and assess the
viability and demand for your product or service.
Build Partnerships: Collaborate with educational institutions, teachers, and professionals in
the field to gain insights, validate your ideas, and build credibility. Partnering with
established organizations can help you access their networks and resources.
Develop an Innovative Solution: Create a product or service that addresses the identified gap
in the market. This could involve developing educational apps, online platforms, tutoring
services, customized curriculum materials, or teacher training programs.
Test and Validate: Pilot your solution in a controlled environment, such as a specific school
or classroom. Collect feedback from teachers, students, and other stakeholders to refine your
offering and ensure its effectiveness.
Establish an Online Presence: Leverage digital marketing strategies to create awareness and
promote your venture. Develop a professional website, utilize social media platforms, and
produce content that showcases your expertise and the value you offer.
Network and Attend Events: Attend education conferences, workshops, and networking
events to connect with potential customers, investors, and collaborators. These platforms
provide opportunities to learn, gain exposure, and build partnerships.
Leverage Local Communities: Engage with local education communities, such as parent-
teacher associations, local school boards, and community centres. Offer workshops, seminars,
or consulting services to establish your presence and build a reputation.
Seek Funding Opportunities: Explore funding options such as grants, loans, or investment
from angel investors or venture capitalists specializing in education. Prepare a compelling
business plan that demonstrates the market potential and financial viability of your venture.

Continuous Learning and Adaptation: Stay updated with the latest trends, research, and
technology in the education sector. Continuously adapt and refine your offerings based on
feedback and changing market dynamics.
Remember, entrepreneurship is a journey that requires perseverance, adaptability, and a
passion for making a positive impact in the education sector.

MARKET FEASIBILITY
The marketing feasibility of entrepreneurship development for students depends on various
factors. Here are some considerations to assess the marketing feasibility:

Target Market: Identify the specific segment of students who are most likely to be interested
in entrepreneurship development. Consider factors such as their career goals, interests, and
prior entrepreneurial experience.
Needs Assessment: Conduct a needs assessment to understand the demand for
entrepreneurship development among students. Assess their motivations, challenges, and
expectations related to starting their own ventures.
Competitor Analysis: Evaluate the existing entrepreneurship development programs available
to students. Identify their strengths, weaknesses, and unique selling points. Differentiate your
program by offering distinct features or addressing gaps in the market.
Curriculum Design: Develop a comprehensive curriculum that covers essential
entrepreneurial skills and knowledge relevant to students. Include topics such as business
planning, marketing, financial management, and leadership skills tailored to their educational
background and career aspirations.
Value Proposition: Clearly communicate the value proposition of your entrepreneurship
development program. Highlight how it will enhance their career prospects, provide practical
skills, and support their entrepreneurial ambitions. Emphasize the benefits and outcomes they
can expect to achieve.
Marketing Channels: Identify the most effective marketing channels to reach students.
Consider utilizing online platforms, social media, education-related websites, and
professional networks to promote your program. Collaborate with educational institutions or
associations to expand your reach.
Partnerships and Collaborations: Form partnerships with relevant stakeholders such as
universities, colleges, and educational organizations. Collaborate with faculty members,
alumni networks, and industry professionals to enhance the credibility and visibility of your
entrepreneurship development program.
Pricing and Financial Assistance: Determine a competitive and feasible pricing structure for
your program. Consider offering flexible payment options and financial assistance to make it
more accessible to students who may have limited financial resources.
Testimonials and Success Stories: Collect testimonials and success stories from students who
have benefited from your program. Highlight their achievements, businesses they have
launched, and positive experiences to build credibility and inspire potential participants.

Continuous Improvement: Regularly assess the effectiveness and impact of your

entrepreneurship development program. Seek feedback from participants and incorporate
their suggestions for improvement. Continuously update and refine your curriculum to align
with emerging trends and market demands.
By considering these factors, conducting thorough market research, and implementing a well-
designed marketing strategy, you can increase the marketing feasibility of entrepreneurship
development for students.
Feasibility Analysis

The learner will be able to

i) know the feasibility analysis

ii) identify the various feasibility analysis

iii) understand the economic, socio and legal feasibility analysis

iv) discuss the purpose of feasibility analysis

v) describe the significance of feasibility analysis

Introduction

A feasibility study is considering all the critical feature of proposed project in order to
determine the livelihood of it succeeding. It is preliminary exploration of proposed project to
regulate and describe the merits and viability. Feasibility analysis find the strengths, weaknesses,
opportunities, and threats to determine whether the proposals are cost-effective and beneficial to
a company’s long-term success.

Significance of the feasibility study

 A company may conduct a feasibility study when it's considering launching a new
business, adding a new product line, or acquiring a rival.
 A feasibility study assesses the potential for success of the proposed plan or project by
defining its expected costs and projected benefits in detail.
 It's a good idea to have a contingency plan on hand in case the original project is found to
be infeasible.
 feasibility studies are helping the project managers for determining the risk and return of
pursuing a plan of action, several steps should be considered before moving forward.
 it convince the investors and bankers for investing in a specific project.
 It helps to complete the project within time duration.

Different types of Feasibility

Several feasibility studies are available but here noted seven feasibilities ie:

(1) Technical feasibility

(2) Operational feasibility

(3) Economic feasibility

(4) Social feasibility

(5) Management feasibility

(6) Legal feasibility

(7) Time feasibility

In this session we discuss economic feasibility and socio and legal feasibility.

Economic Feasibility

An Economic feasibility is the most important in the feasibility studies which helps
organisation, company’s project practicality, cost and benefits before investing financial
resources. It is an unbiased project evaluation, enhancing project credibility by supporting
decision makers in identifying the proposed project's favourable economic benefits to the
organisation or company.

Social Feasibility

Social feasibility is a determination of whether a proposed project will be acceptable to

the people or not. This determination typically examines the probability of the project being
accepted by the group directly affected by the proposed system change.

Legal Feasibility

Legal feasibility is a determination of whether a proposed project infringes on known

Acts, 'Statutes, as well as any pending legislation. Although in some instances the project might
appear sound, on closer investigation it may be found to infringe on several legal area s.

Benefits of the feasibility

 Develops the thinking of project teams
 Identifying the fresh possibilities
 Getting relevant information that assist for making the judgment regarding whether to
proceed or not.
 Reduces the various business options
  Denote a compelling reason for pursuing the project.
 By fixing several parameters, it improves the success rate.
 Helps in project decision-making
 Determines why it's not a good idea to go ahead.

Reference

https://www.investopedia.com/terms/f/feasibility-study.asp

https://egyankosh.ac.in/bitstream/123456789/12085/1/Unit%203.pdf

https://www.resurgentindia.com/project-feasibility-study-and-its-importance-in-project-
management
 FEASIBILITY ANALYSIS

Learning Objectives

After the completion of this module the learners will be able to

 explain what is known as feasibility, and what is feasibility study

 list and illustrate different types of feasibility

 discuss be purposes of feasibility study

 describe different steps in feasibility analysis

Feasibility
Feasibility is the determination of whether or not a project is worth doing. The
process followed in making this determination is called a feasibility study. It is the
preliminary evaluation of a business idea, conducted for the purpose of determining
whether the idea is worth pursuing.

Feasibility analysis
Feasibility analysis takes the guesswork (to a certain degree) out of a business
launch, and provides an entrepreneur with a more secure notion that a business idea
is feasible or viable.

Feasibility study
Feasibility study involves an examination of the technical, financial, HR and
marketing aspects of a business on ex ante (before the venture comes into existence)
basis.

Example
 Whether there will be market for the Product?
 Funding Requirements of the Project
 Where to get the funds for the Project?
 How to market the Product?
Goals of Feasibility Study
 To understand thoroughly all aspects of a project, concept, or plan.
 To become aware of any potential problems that could occur while
implementing the project.
 To determine if, after considering all significant factors, the project is viable—
that is, worth undertaking.
Importance of Feasibility Study
 It is important for Business Development.
 It allows the business to address where and how will it operate.
 Identify the potential obstacles that may impede its operations and recognise
the amount of funding.
  Provides basic information for effective decision making with respect to the
proposed investment.
 Helps to assist the entrepreneur in developing future plans for the
organisation.
Types of Feasibility
1. Marketing Feasibility
2. Financial Feasibility
3. Political Feasibility
4. Economic Feasibility
5. Social and Legal Feasibility
6. Technical Feasibility
7. Managerial Feasibility
8. Location Feasibility
9. Utility feasibility
Marketing Feasibility
This is one of the most important sections of the feasibility study as it
examines the marketability of the product or services and convinces investors that
there is a potential market for the product or services.
It is concerned with gaining the in-depth knowledge and doing a deep
analysis of market and knowing how is the target market going to respond towards
particular project/product.
Market Feasibility studies should include a description of the industry,
current market analysis, competition, anticipated future market potential, potential
sources of revenue and sales projections.
Major Areas of Marketing Feasibility
Investigating the full market potential and identifying customers for goods
and services.
Analysing the extent to which the enterprise might exploit this potential
market.
Using market analysis to determine the opportunities and risks associated
with the venture.
Steps in marketing feasibility Analysis
There are seven steps in marketing feasibility analysis. They are as follows
1. Industry Analysis
2. Demand of the Product
3. Potential Markets
4. Customer Segmentation and Targeting
5. Marketing strategies
6. Costs, pricing methods and profitability
7. Competitors Analysis
Financial Feasibility Analysis
Financial analysis is the process of evaluating businesses, projects, budgets,
and other finance-related transactions to determine their performance and
suitability.
Financial analysis is used to analyse whether an entity is stable, solvent,
liquid, or profitable enough to warrant a monetary investment.
Purpose of Financial Feasibility Analysis
 To evaluate the project's profitability or cost-effectiveness relative to some
alternative project or investment.
 Used to compare alternative projects to select which ones should be
implemented.
Financial Feasibility Analysis includes the analysis of data with regard to
 Capital Requirements
 Sources of Capital
 Working Capital
 Financial History if any,
 Potential sources of funds (Debt/Equity Finance/Lending Institutions)
 Required Borrowing Capital
 Repayment Condition
 Fixed and Variable Costs
 Projected Profitability and return on investments
 Financial Analysis
Capital Requirements
The Capital requirements in the financial feasibility analysis includes the
following
 Land and building
 Plant and machinery
 Electricals
 Transportation
 Knowledge and Consultancy fees
 Miscellaneous assets
 Preliminary expenses
 Margin money for working capital
Sources of Capital
The Sources of Capital in the financial feasibility analysis includes the
following
 Ordinary shares
 Preference shares having pre-determined rate of dividend
 Debentures
 Bonds
 Term loans
 Deferred credits
 Capital investment subsidy
 Lease financing
 Public deposits etc.
Political Feasibility

Political feasibility is a measure of how well a solution to a policy problem,

will be accepted by a set of decision makers and the general public.
For a policy to be enacted and implemented, it must be politically acceptable,
or feasible.
 Political feasibility analysis is used to predict the probable outcome of a
proposed solution to a policy problem through examining the actors, events and
environment involved in all stages of the policy-making process.
It is a frequently used component of a policy analysis and can serve as an
evaluative criterion in choosing between policy alternatives.
Feasible policies must be politically acceptable or at least not unacceptable.
Political unacceptability is a combination of two conditions too much
opposition or too little support. One common mistake is widespread in practice that
feasibility becomes a dominant criterion of preferable alternative.
Feasibility is “the state or degree of being easily or conveniently done”.
Feasibility, as it pertains to the political arena, speaks to the political climate. The
question then becomes: “In this political climate, can we get this done?
When policy analysis generates policy alternatives, the political risks and
costs associated with each can be important criteria for deciding between
alternatives.
A good policy alternative requires a certain amount of political feasibility, or
implementation of the policy will be impossible. It is important to keep in mind;
however, that feasibility alone does not make a policy "good." Examining all criteria
is necessary for the implementation of socially responsible policy.
Politics are difficult to predict but it has been said that "no decision is ever
made in complex systems without political feasibility having played some role."
Steps in Political Feasibility Analysis
There are three main steps in Political Feasibility analysis. They are
1. Identify the Policy’s environment.
 To identify the space in which the policy problem exists
 The analyst defines the specific policy issue area
 To identify the players involved in the policy
2. Assemble information and organise it.
 Key Players
 Motivations
 Belief Systems
 Resources
 Site of Action
3. Analyse the data.
 To make a series of judgment calls.
 To have the specifications of the current political environment for a
specific policy area, and what alternative proposals may be
currently considered.
 to consider policy and political alternatives to protect against
political error.
References
1. https://egyankosh.ac.in/bitstream/123456789/79272/3/Unit-8.pdf
2. https://en.wikipedia.org/wiki/Political_feasibility_analysis
3. https://egyankosh.ac.in/bitstream/123456789/10724/1/Unit-2.pdf
4. https://www.e-ir.info/2012/08/29/political-feasibility/
5. https://egyankosh.ac.in/bitstream/123456789/12085/1/Unit%203.pdf
Check Your Progress
1. The Determination of whether a project is worth doing is termed as
a) Feasibility b) Marketing c) Evaluation d) Entrepreneurship
2. The Feasibility study which examines the marketability of the service is
known as ______ Feasibility.
a) Financial b) Utility c) Marketing d) Political
3. The first step in marketing Feasibility is
a) Marketing Strategies b) Potential Market
c) Demand of the Product d) Industry Analysis
4. The feasibility analysis used to warrant a monetary investment is
a) Financial b) Utility c) Marketing d) Political
5. The solution for a policy problem accepted by decision makers and public is
known as
a) Financial feasibility b) Political feasibility
c) Marketing feasibility d) Legal feasibility
Answers
1. a) Feasibility
2. c) Marketing
3. d) Industry Analysis
4. a) Financial
5. b) Political feasibility

The Material prepared and compiled by

Dr. M. Senthilkumaran
Assistant Professor
Department of Educational Technology
Tamil Nadu Teachers Education University
Chennai – 600 097
Technical Feasibility, Managerial Feasibility, Location Feasibility and Utility Feasibility

Learning Objectives
After the completion of this module the learners will be able to
 explain the technical feasibility and its key factors
 illustrate the key factors of managerial feasibility
 discuss the purposes of locational feasibility
 describe the considerations of utility feasibilities

Technical Feasibility:
Technical feasibility refers to the assessment of whether a proposed project, system, or
initiative can be successfully implemented from a technical perspective. It involves evaluating
whether the required technology, resources, infrastructure, and expertise are available to
develop and maintain the project.
Here are some key aspects to consider when evaluating technical feasibility:
1. Technology Availability: Assess whether the required technologies, tools, hardware,
and software are available or can be developed within the project's constraints.
Determine if any new technology needs to be adopted or if existing technologies can
be leveraged.
2. Infrastructure: Consider the existing infrastructure and determine if it can support the
project's requirements. This includes network capabilities, server capacity, data storage,
and any other necessary infrastructure components.
3. Resources: Evaluate the availability of skilled personnel, such as developers,
engineers, designers, and technical support. Determine if the team has the required
expertise to build, implement, and maintain the project.
4. Compatibility: Check for compatibility issues between different technologies and
systems that will be integrated. Ensure that the project components can work together
seamlessly without conflicts.
5. Scalability: Assess whether the proposed solution can handle increased loads, users, or
data volumes in the future without a significant drop in performance. Scalability is
crucial to accommodate growth and changes in demand.
 6. Security: Evaluate the security measures that need to be implemented to protect the
system from potential threats and vulnerabilities. This includes data protection,
authentication, authorization, and encryption.
7. Performance: Determine if the system will meet the required performance standards,
such as response times, processing speeds, and reliability.
8. Data Management: Consider how data will be collected, stored, processed, and
retrieved. Evaluate the data architecture and databases required to support the project.
9. Technical Risks: Identify potential technical challenges and risks that could impact the
successful implementation of the project. Develop mitigation strategies to address these
risks.
10. Regulations and Standards: Ensure that the project complies with relevant industry
standards and regulations. This is particularly important in regulated industries such as
healthcare or finance.
11. Costs: Evaluate the costs associated with acquiring and implementing the necessary
technologies, as well as ongoing maintenance and support.
12. Timeline: Assess the time required for development, testing, and deployment. Consider
any potential delays due to technical challenges or resource constraints.

In summary, technical feasibility analysis is a critical step in the project planning process.
It helps stakeholders understand whether a proposed project is viable from a technological
standpoint and whether the necessary resources and expertise are available to successfully
execute the project.

Managerial Feasibility:
Managerial feasibility refers to the assessment of whether a proposed project or
initiative can be effectively managed and controlled to achieve its goals. It involves evaluating
the project's alignment with the organization's management processes, structure, and
capabilities.
Here are some key factors to consider when evaluating managerial feasibility:
1. Project Planning and Organization: Assess whether the project's objectives, scope,
and tasks can be clearly defined and organized. Determine if the project team can
establish a well-structured plan for execution.
2. Project Leadership: Evaluate the availability of skilled and experienced project
managers and leaders who can guide the project team and ensure effective
communication, coordination, and decision-making.
3. Resource Allocation: Consider the availability of financial, human, and material
resources needed for the project. Evaluate if resources can be allocated optimally to
support the project's requirements.
4. Risk Management: Determine if the project team can identify, assess, and manage
potential risks and uncertainties. Effective risk management strategies should be in
place to mitigate negative impacts on the project.
5. Change Management: Assess the organization's ability to manage changes that might
arise from the project's implementation. Evaluate how the project will be integrated into
existing processes and systems.
6. Stakeholder Management: Identify and analyse the project's stakeholders, both
internal and external. Evaluate whether the project team can effectively engage and
communicate with stakeholders to ensure their needs and concerns are addressed.
7. Communication: Consider the communication channels and strategies that will be
used to keep stakeholders informed about project progress, milestones, and any issues
that arise.
8. Decision-Making Processes: Evaluate the decision-making framework within the
organization. Determine if decisions related to the project can be made promptly and
effectively to avoid delays and conflicts.
9. Conflict Resolution: Assess the organization's approach to resolving conflicts that may
arise during project execution. Determine if there are mechanisms in place to address
disagreements and ensure project continuity.
10. Project Monitoring and Control: Evaluate whether the organization has the tools and
processes to monitor project performance, track progress, and make necessary
adjustments to keep the project on track.
11. Project Closure and Evaluation: Consider how the project will be closed out,
including evaluating its success against the initial objectives. Determine if lessons
learned will be documented and applied to future projects.
12. Organizational Culture: Assess whether the organization's culture supports project
management practices, collaboration, and continuous improvement. The project's
success can be influenced by the alignment between the project's goals and the
organization's culture.
 13. Managerial Support: Determine if there is sufficient buy-in and support from senior
management for the project. Adequate support can help overcome obstacles and ensure
that the project remains a priority.

In summary, managerial feasibility analysis focuses on evaluating the organization's

capacity to effectively plan, execute, monitor, and control the proposed project. It considers the
organization's structure, processes, leadership, and resources to determine if the project can be
managed successfully within the given context.

Location Feasibility:
Locational feasibility refers to the assessment of whether a particular location is suitable
for a specific purpose, project, or activity. It involves evaluating various factors to determine
whether a proposed location is viable and practical. This concept is commonly used in urban
planning, real estate development, business site selection, and other fields where the choice of
location can significantly impact the success or efficiency of a project.
Factors that are typically considered when evaluating locational feasibility include:
1. Accessibility: How easily can people or goods reach the location? Proximity to
transportation networks such as roads, highways, public transit, and airports is crucial.
2. Market Demand: Is there sufficient demand for the products or services at the chosen
location? Understanding the target market and its preferences is essential.
3. Infrastructure: Availability of utilities such as water, electricity, sewage, and
telecommunications services is critical for the functioning of many projects.
4. Competition: What is the competitive landscape in the chosen location? Assessing the
presence of competitors and their strengths can help determine if there is room for a
new business or project.
5. Zoning and Regulations: Local zoning laws and regulations can impact what can be
built or operated in a specific area. Compliance with these rules is essential.
6. Costs: Consideration of land and property costs, construction costs, operational
expenses, and potential tax implications is necessary to ensure financial viability.
7. Environmental Impact: Understanding the potential environmental impact of a
project on the chosen location is crucial for sustainability and legal compliance.
8. Labour Force: Availability of a skilled and appropriate labour force in the area is
important, especially for businesses that rely heavily on human resources.
 9. Cultural and Social Factors: Understanding the local culture, demographics, and
social dynamics is important for businesses and projects that require community
engagement.
10. Risk Assessment: Identifying potential risks such as natural disasters, political
instability, or economic fluctuations in the region is vital for long-term planning.
11. Future Growth Potential: Evaluating the potential for growth and development in the
area over the long term is important for investments that require a lasting presence.

The assessment of locational feasibility typically involves collecting data, conducting

surveys, engaging with stakeholders, and using various analytical tools to make informed
decisions. The goal is to choose a location that aligns with the project's objectives, maximizes
its chances of success, and minimizes potential challenges and risks.

Utility Feasibility:
Utility feasibility refers to the assessment of whether essential utilities and services can
be efficiently provided to a specific location or project. These utilities and services typically
include things like water supply, electricity, sewage disposal, telecommunications, and other
infrastructure necessary for the proper functioning of residential, commercial, or industrial
developments. Evaluating utility feasibility is crucial to ensure that a proposed project can be
adequately serviced and sustained.
Key considerations in utility feasibility assessment include:
1. Infrastructure Availability: Determining whether the necessary utility infrastructure
is present or can be developed within the proposed location. This includes assessing the
availability of water mains, electrical lines, sewage systems, etc.
2. Capacity and Demand: Analysing whether the existing utility infrastructure has the
capacity to meet the demand generated by the project. This is particularly important for
projects that require significant water or electricity consumption.
3. Upgrades and Expansion: If the existing utility infrastructure is insufficient, assessing
the feasibility and cost of upgrading or expanding it to accommodate the needs of the
project.
4. Regulatory Compliance: Ensuring that the project adheres to local regulations and
standards related to utility provision, such as environmental regulations for sewage
disposal or safety regulations for electrical systems.
 5. Environmental Impact: Evaluating the potential environmental impact of utility
installations and operations on the local ecosystem and community.
6. Costs: Estimating the costs associated with connecting to or installing utility services.
This includes installation costs, ongoing operational costs, and any required permits or
fees.
7. Long-Term Sustainability: Considering the long-term sustainability of utility
services. This includes factors like resource availability, renewable energy options, and
plans for future growth.
8. Backup and Redundancy: Assessing the need for backup systems or redundancy to
ensure continued utility services in case of emergencies or system failures.
9. Coordination with Service Providers: Collaborating with utility service providers to
determine their ability to provide services to the proposed location and coordinating the
timing of installations.
10. Community Impact: Considering the impact of utility installations and operations on
the local community, including potential disruptions during construction and any visual
or noise-related concerns.

Utility feasibility studies often involve working closely with utility companies,
engineering firms, environmental experts, and local government authorities. These studies help
decision-makers understand the challenges and opportunities related to utility provision for a
specific project and ensure that essential services can be reliably provided to the intended
location.

References
1. https://egyankosh.ac.in/bitstream/123456789/79272/3/Unit-8.pdf
2. https://en.wikipedia.org/wiki/Political_feasibility_analysis
3. https://egyankosh.ac.in/bitstream/123456789/10724/1/Unit-2.pdf
4. https://www.e-ir.info/2012/08/29/political-feasibility/
5. https://egyankosh.ac.in/bitstream/123456789/12085/1/Unit%203.pdf

Check Your Progress

1. Which one of the following is the key factor of technical feasibility?
A) Resource B) Scalability
C) Costs D) All the above
 2. Which one of the following is the key factor of managerial feasibility?
A) Project Leadership B) Resource Allocation
C) Conflict Resolution D) All the above
3. The assessment for an effective control of a project is referred as
A) Locational feasibility B) Managerial feasibility
C) Technical feasibility D) Utility feasibility
4. The assessment of water and electricity services are the factors of
A) Locational feasibility B) Managerial feasibility
C) Technical feasibility D) Utility feasibility
5. The assessment of a particular location is referred as
A) Technical feasibility B) Utility feasibility
C) Locational feasibility D) Managerial feasibility
Answers
1. D) All the above
2. D) All the above
3. B) Managerial feasibility
4. D) Utility feasibility
5. C) Locational feasibility

The material prepared and compiled by

Dr. R. Boopathi
Assistant Professor
Department of Educational Technology
Tamil Nadu Teachers Education
University
Chennai – 600 097.
BUSINESS MODEL AND PLAN IN RESPECTIVE INDUSTRY

Business model – Meaning, designing, analysing and improvising; Business Plan – Meaning,
Scope and Need; Financial, Marketing, Human Resource and Production/Service Plan;
Business plan Formats; Project report preparation and presentation; Why some Business Plan
fails?

BUSINESS MODEL

INTRODUCTION

The business model and plan for a particular industry will vary depending on a range
of factors, including the size and type of business, the competitive landscape, and the needs
and preferences of the target market. verall, the business model and plan for a particular
industry will depend on a range of factors, including the competitive landscape, market
demand, and the needs and preferences of the target market. A successful business model and
plan should be tailored to the specific needs of the business and the industry in which it
operates.

MEANING

A business model refers to the overall strategy and approach that a company takes to
generate revenue and make a profit. It outlines the key elements of a company's operations,
including how it creates, delivers, and captures value. A business model typically describes
how a company plans to generate revenue, which can include selling products or services,
licensing technology, or charging subscription fees. It also covers how a company plans to
manage costs, acquire customers, and achieve profitability.

Business models can vary widely depending on the industry, company size, and target
market. Some common business models include the subscription model, the freemium model,
the pay-per-use model, and the franchise model. A well-designed business model is critical to
the success of any company. It helps to ensure that a company is generating sufficient revenue
to cover its costs, while also providing value to its customers and stakeholders.
DESIGNING

Identifying the target market: Who are your customers? What are their needs and
preferences? Understanding your target market is critical to developing a business model that
meets their needs and creates value. Defining the value proposition: What value does your
product or service provide to customers? How is it different from the competition? Your value
proposition should be clear and compelling, highlighting why customers should choose your
offering over others. Choosing revenue streams: How will you generate revenue? Will you
charge a one-time fee or a recurring subscription fee? Will you sell products or services, or use
a licensing model? Understanding your revenue streams is key to building a sustainable
business model.

Identifying key partnerships and resources: What partnerships and resources will
you need to deliver your product or service? This could include suppliers, distributors,
technology platforms, and other key resources. Developing a cost structure: What are the costs
associated with delivering your product or service? This could include production costs,
marketing expenses, and overhead costs. Understanding your cost structure is important for
ensuring that your business model is financially sustainable. Testing and iterating: Once you
have developed a business model, it is important to test it in the real world and iterate based on
feedback from customers and stakeholders. This will help you refine your model over time and
ensure that it remains relevant and effective. Designing a business model involves identifying
the target market, defining the value proposition, choosing revenue streams, identifying key
partnerships and resources, developing a cost structure, and testing and iterating the model.

ANALYSING

Analyzing a business model involves evaluating its strengths, weaknesses,

opportunities, and threats. This is commonly known as a SWOT analysis. SWOT stands for
Strengths, Weaknesses, Opportunities, and Threats. The following are some steps to analyze a
business model.

Identify the business model: Start by clearly identifying the business model of the company
you want to analyze. This could involve looking at the company's website, annual reports, and
other publicly available information.

Identify
strengths

Identify
Identify threats weaknesses

Identify
opportunities

Identify strengths: Analyze the business model to identify its strengths. These could include
a unique value proposition, a strong customer base, or a strong brand reputation.

Identify weaknesses: Analyze the business model to identify its weaknesses. These could
include high customer acquisition costs, low customer retention rates, or a lack of
diversification in revenue streams.
Identify opportunities: Analyze the business model to identify potential opportunities for
growth and expansion. These could include new markets, new products or services, or new
partnerships.

Identify threats: Analyze the business model to identify potential threats to the business.
These could include new competitors, changes in regulations, or changes in customer
preferences.

Evaluate the findings: Evaluate the strengths, weaknesses, opportunities, and threats
identified in the analysis to identify areas for improvement and potential risks to the business.

Overall, analyzing a business model is an important step in building a successful

business. By identifying strengths, weaknesses, opportunities, and threats, companies can make
informed decisions and take steps to improve their model and increase their chances of success.

IMPROVISING A BUSINESS MODEL

Improvising a business model involves making changes to the model to address

weaknesses and capitalize on opportunities. The following are some steps to improvising a
business model:
Improving. Identify areas for improvement:
Analyze the business model to identify areas for improvement. This could involve
looking at customer feedback, performance metrics, and market trends to identify potential
weaknesses. Brainstorm solutions: Brainstorm potential solutions to address the identified
weaknesses. This could involve considering new revenue streams, adjusting the target market,
or investing in new partnerships and resources.

Evaluate potential solutions: Evaluate the potential solutions to determine their feasibility
and potential impact on the business. This could involve conducting market research, assessing
costs and benefits, and weighing the risks and rewards of each solution.

Implement changes: Implement the changes to the business model. This could involve making
changes to the company's product or service offerings, marketing strategy, pricing strategy, or
other key elements of the business model. Monitor and measure results: Continuously monitor
and measure the impact of the changes on the business model. This could involve tracking key
performance metrics, gathering customer feedback, and making adjustments as needed.
Overall, improvising a business model is an important process that can help companies stay
competitive and adapt to changing market conditions. By identifying areas for improvement,
brainstorming potential solutions, and implementing changes, companies can increase their
chances of success and build a sustainable business.

BUSINESS PLAN

MEANING

A business plan is a comprehensive document that outlines the strategy, objectives, and
operations of a business. It typically includes information about the company's products or
services, target market, marketing and sales strategies, organizational structure, financial
projections, and other important details related to the operation of the business. The purpose of
a business plan is to provide a roadmap for the company's success, and to help secure funding
from investors or lenders. A well-written business plan can also help entrepreneurs identify
potential challenges and opportunities, and develop strategies to address them.

Business plans can vary in length and complexity depending on the nature of the
business and the intended audience. They can range from a few pages to over 100 pages, and
may include detailed market research, financial analysis, and other supporting materials.
Overall, a business plan is an important tool for entrepreneurs and business owners to plan and
execute their strategies effectively, and to communicate their vision and goals to stakeholders.
It can help entrepreneurs secure funding, attract customers, and build a successful and
sustainable business.

SCOPE OF A BUSINESS PLAN

The scope of a business plan depends on the specific needs of the business and the
intended audience. However, in general, a business plan should cover the following key areas:

Executive Summary: This is a brief overview of the entire business plan that highlights the
key elements of the business and the goals of the company.

Company Description: This section provides a detailed description of the company, including
its history, mission statement, vision, and values.

Market Analysis: This section provides an overview of the target market, including customer
demographics, market size, and competition.

Products and Services: This section provides a detailed description of the company's products
and services, including features, benefits, and pricing.
Marketing and Sales Strategy: This section outlines the company's marketing and sales
strategy, including the channels used to reach customers and the tactics used to persuade them
to purchase.

Operations and Management: This section outlines the day-to-day operations of the business,
including the organizational structure, personnel, and facilities.

Financial Projections: This section provides a detailed financial analysis of the business,
including revenue projections, expenses, and cash flow projections.

Funding Requirements: This section outlines the funding requirements of the business,
including the amount of funding required, the use of funds, and the expected return on
investment.

Overall, the scope of a business plan is to provide a comprehensive overview of the

business and its operations, and to communicate the company's vision and goals to
stakeholders. By outlining the key elements of the business, including the market, products and
services, marketing and sales strategy, operations, financial projections, and funding
requirements, a business plan can help entrepreneurs and business owners plan and execute
their strategies effectively and build a successful and sustainable business.

NEED FOR BUSINESS PLAN

There are several reasons why a business plan is necessary for the success of a business:

Provides a roadmap for the business: A business plan helps to define the vision and goals of
the business, and provides a roadmap for achieving those goals. It helps the business owner to
identify potential obstacles and opportunities, and to develop strategies to overcome or
capitalize on them.

Helps secure funding: A well-written business plan can help to secure funding from investors
or lenders by providing a clear overview of the business and its potential for success. It can
also help to demonstrate the viability of the business and the potential return on investment.

Assists in decision making: A business plan provides a framework for decision making, and
helps the business owner to make informed decisions about the direction and operations of the
business. It can help to identify areas where the business needs to focus its resources and
prioritize its efforts.
Improves communication: A business plan can improve communication within the business
by providing a shared understanding of the company's vision, goals, and operations. It can help
to align the efforts of different departments and stakeholders, and create a sense of purpose and
direction.

Helps to measure progress: A business plan provides a baseline for measuring the progress
of the business over time. It can help to identify areas where the business is succeeding and
where it needs to improve, and to adjust strategies and operations accordingly.

Overall, a business plan is an essential tool for any entrepreneur or business owner who
wants to build a successful and sustainable business. It helps to define the vision and goals of
the business, secure funding, make informed decisions, improve communication, and measure
progress.

FINANCIAL PLAN

A financial plan is an essential part of a business plan that outlines the financial
projections, assumptions, and strategies of a business. The financial plan typically includes the
following components:

Sales
Forecast

Funding Expense
Requirements Budget

Balance Cash Flow

Sheet Statement

Profit and
Loss
Statement

Sales Forecast: This section outlines the projected sales revenue for the business over the next
three to five years. It may include details about the target market, sales channels, and pricing
strategies.
Expense Budget: This section provides a detailed breakdown of the expenses that the business
will incur, including operating expenses, marketing expenses, and capital expenditures.

Cash Flow Statement: This section outlines the expected cash inflows and outflows for the
business over the next three to five years. It helps to identify potential cash flow issues and to
plan for cash needs.

Profit and Loss Statement: This section provides a summary of the business's revenue,
expenses, and profits over the next three to five years. It helps to identify the break-even point
and to determine the profitability of the business.

Balance Sheet: This section provides a snapshot of the business's assets, liabilities, and equity
at a specific point in time. It helps to evaluate the financial health of the business and to
determine the net worth of the company.

Funding Requirements: This section outlines the funding requirements of the business,
including the amount of funding required, the use of funds, and the expected return on
investment. It may also include details about the sources of funding, such as loans or
investments.

Overall, the financial plan is a critical component of a business plan that provides a
clear and detailed overview of the financial projections and assumptions of the business. It
helps to evaluate the financial viability of the business, to plan for cash flow needs, and to
secure funding from investors or lenders.

MARKETING

A marketing plan is an important component of a business plan that outlines the

strategies and tactics the business will use to reach its target audience and promote its products
or services. The marketing plan typically includes the following components:

Market Analysis: This section provides an overview of the market the business will be
operating in, including details about the target audience, competitors, and industry trends.

Target Market: This section outlines the specific demographic and psychographic
characteristics of the target market, and explains how the business will reach and communicate
with this audience.

Product/Service Description: This section provides a detailed description of the products or

services the business will be offering, including key features and benefits.
Pricing Strategy: This section outlines the pricing strategy the business will use, including
pricing structure, discounts, and promotions.

Promotion Strategy: This section outlines the promotional tactics the business will use to
reach its target audience, such as advertising, public relations, events, and social media.

Sales Strategy: This section outlines the sales tactics the business will use to convert leads
into customers, such as sales presentations, demos, and follow-up communication.

Marketing Budget: This section outlines the marketing budget for the business, including the
anticipated costs for each marketing tactic and the expected return on investment.

Overall, the marketing plan is an essential component of a business plan that outlines
the strategies and tactics the business will use to reach its target audience and promote its
products or services. It helps to identify key market trends, target the right audience, develop
effective pricing and promotional strategies, and measure the success of the marketing efforts.

HUMAN RESOURCE

The human resource (HR) component of a business plan outlines the strategies and
tactics that the business will use to attract, develop, and retain employees. The HR plan
typically includes the following components:

Organizational Structure: This section outlines the structure of the business, including the
hierarchy of positions and the roles and responsibilities of each position.

Job Descriptions: This section provides detailed descriptions of the key positions within the
business, including the qualifications and experience required for each position.

Recruitment and Selection: This section outlines the strategies the business will use to attract
and select qualified candidates for open positions, including job postings, interviews, and
reference checks.

Training and Development: This section outlines the strategies the business will use to train
and develop employees, including orientation programs, on-the-job training, and professional
development opportunities.

Performance Management: This section outlines the strategies the business will use to
evaluate employee performance, provide feedback, and set goals for improvement.
Compensation and Benefits: This section outlines the compensation and benefits package the
business will offer employees, including salary, bonuses, health insurance, and retirement
plans.

Employee Relations: This section outlines the strategies the business will use to promote a
positive workplace culture, including policies and procedures for addressing employee
concerns and conflicts.

Overall, the HR plan is an essential component of a business plan that outlines the
strategies and tactics the business will use to attract, develop, and retain employees. It helps to
ensure that the business has the right people in the right positions, and that employees are
engaged and motivated to help the business achieve its goals.

PRODUCTION/SERVICE PLAN

The production/service plan of a business plan outlines how the business will produce
or deliver its products or services. The plan typically includes the following components:

Production/Service Process: This section describes the process the business will use to
produce or deliver its products or services, including any equipment or technology that will be
used.

Production/Service Capacity: This section outlines the production or service capacity of the
business, including the amount of product or service that can be produced or delivered in a
given period of time.

Production/Service Costs: This section outlines the costs associated with producing or
delivering the product or service, including labor, materials, and overhead costs.

Quality Control: This section outlines the quality control measures the business will use to
ensure that the products or services meet or exceed customer expectations.

Supply Chain Management: This section outlines how the business will manage its supply
chain, including sourcing materials, managing inventory, and coordinating with suppliers.

Research and Development: This section outlines any ongoing research and development
efforts the business will undertake to improve its products or services.

Overall, the production/service plan is an essential component of a business plan that

outlines how the business will produce or deliver its products or services. It helps to ensure that
the business has the resources and capabilities to produce high-quality products or services at
a reasonable cost, and that it can meet customer demand in a timely and efficient manner.

BUSINESS PLAN FORMAT

There are several formats for creating a business plan, and the format chosen will
depend on the specific needs of the business and the audience that the plan is intended for.
Some common formats for business plans include:

Traditional Business Plan: This is the most common format for a business plan, and it
typically includes an executive summary, market analysis, company description, management
and organization, products and services, marketing and sales, financial projections, and funding
requirements.

Lean Startup Business Plan: This format is designed for startups and includes only the most
essential elements of a traditional business plan, such as the problem the business is solving,
the target market, the unique value proposition, and the business model.

One-Page Business Plan: This format condenses the entire business plan onto a single page,
and typically includes a brief description of the business, the target market, the marketing
strategy, the management team, and the financial projections.

Pitch Deck Business Plan: This format is designed for presenting the business plan to potential
investors, and typically includes a series of slides that summarize the most important elements
of the business plan.

Operational Business Plan: This format focuses on the day-to-day operations of the business,
and typically includes information on staffing, inventory, production processes, and other
operational details.

Strategic Business Plan: This format focuses on the long-term goals and objectives of the
business, and typically includes information on the competitive landscape, market trends, and
growth opportunities.

Overall, the format chosen for a business plan will depend on the specific needs of the
business and the audience that the plan is intended for. The most important thing is to ensure
that the plan is well-organized, easy to understand, and provides a clear roadmap for achieving
the goals and objectives of the business.
PROJECT REPORT PREPARATION AND PRESENTATION

Preparing and presenting a business plan or project report involves several steps that
should be carefully planned and executed to ensure that the plan is well-received and achieves
its objectives. Here are some key steps to consider:

Define the Objective: Before you start preparing your business plan or project report, it's
important to define the objective of the plan. This will help you to focus your efforts and ensure
that the plan addresses the specific needs of your audience.

Gather Information: Once you have defined the objective of the plan, you need to gather all
the necessary information that will be required to prepare the plan. This may include market
research, financial data, customer demographics, and other relevant information.

Organize the Plan: Once you have gathered all the necessary information, you should
organize the plan in a logical and easy-to-understand manner. This may involve creating an
executive summary, outlining the key sections of the plan, and organizing the information in a
way that is easy to follow.

Develop Visual Aids: Visual aids can be a powerful tool for presenting your business plan or
project report. These may include charts, graphs, tables, and other visual representations of
your data.

Practice the Presentation: It's important to practice your presentation in advance to ensure
that you are comfortable with the material and can deliver the plan effectively. This may
involve rehearsing your presentation with colleagues or seeking feedback from others.

Deliver the Presentation: When delivering your business plan or project report, it's important
to be confident, engaging, and clear. Make sure that you address any questions or concerns that
may arise, and be prepared to provide additional information as needed.

Overall, preparing and presenting a business plan or project report can be a challenging
task, but with careful planning and preparation, you can create a compelling and effective plan
that achieves your objectives and helps to drive your business forward.
WHY SOME BUSINESS PLAN FAILS?

There are several reasons why some business plans fail to achieve their intended
objectives. Here are some common reasons:

Lack of Market Research: One of the most common reasons why business plans fail is a lack
of market research. Without a thorough understanding of the target market, competitors, and
industry trends, it can be difficult to develop a plan that meets the needs of your customers and
sets your business apart from the competition.

Unrealistic Financial Projections: Another common reason why business plans fail is
unrealistic financial projections. If the financial projections are too optimistic, it can be difficult
to secure funding or generate revenue, which can ultimately lead to the failure of the business.

Poor Execution: Even the best business plans can fail if they are poorly executed. It's
important to have a solid plan for executing the strategies outlined in the business plan, as well
as a plan for monitoring progress and making adjustments as needed.

Lack of Flexibility: Business plans that are too rigid can also fail. It's important to be flexible
and willing to adapt to changing market conditions or unexpected challenges.

Lack of Focus: A business plan that is too broad or lacks focus can also be a recipe for failure.
It's important to have a clear focus and to develop strategies that align with your business goals
and objectives.

Overall, a successful business plan requires a combination of thorough research,

realistic financial projections, effective execution, flexibility, and focus. By addressing these
common reasons for failure, you can increase your chances of developing a successful business
plan that achieves your objectives and drives your business forward.
 UNIT –V
Financing and How to Start –start up Business
Objectives:
On completion of this unit, the prospective teacher educators will be
able :
 comprehend the concept of the banking and non banking institutions
 understand the term Venture Capital and its role in Entrepreneurship
 learn about the government schemes for funding business
Introduction:
Access to financial resources is essential for growth. The financial system
channels resources through intermediaries and markets, allocating them within
the economic system. The mix of banks, other intermediaries and market-based
finance varies across countries and over time, depending on history, institutions,
and stage of financial development, but certain common trends have emerged in
the last decade. Since the global financial crisis, the regulation of banks has
been redesigned to address the vulnerabilities that led to accumulation of
excessive risks. The reforms resulted from a reassessment of the role of banks in
the post-crisis world, justified by the adverse systemic effects of their distress.
As banks’ role has somewhat shrunk, non-bank financial intermediaries have
taken on an increasing role in the global financial system.1 At the same time,
advances in technology have fuelled the emergence of technology enabled
financial innovation (“FinTech”), which is one of the areas where non-bank
finance is expanding most rapidly. A diversified financial system benefits
savers and borrowers because it offers multiple ways of channelling financial
resources, including to support long-term investment, and diversifying risks.
The non-bank financial sector competes with banks, thereby stimulating
efficiency and innovation. It can reduce the vulnerability of the real economy to
financial shocks because funding sources for the real economy can be
diversified. At the same time, the expansion of non-bank finance poses new
challenges to regulators, as the activities of non-bank financial intermediaries
can have their own significant implications for systemic risk. In the case of the
asset management industry, on which I shall mostly focus today, identifying,
monitoring and preventing the build-up of risks from non-bank finance appears
to require fresh thinking, more data, deeper analysis, and, quite possibly, new
policy instruments. FinTech opens financial intermediation and credit markets
to new players and, at the same time, is bound to change the way traditional
intermediaries operate. It can expand access to financial services, increase
competition and efficiency, by lower transaction costs; but it may also mean
that old risks take new forms and that new (or substantially increased) risks,
such as cyber risk, arise. Detecting such evolving and emerging risks requires
understanding and closely monitoring FinTech activities, especially with a view
to closing regulatory loopholes: among them deviations from the key principle
that the same risk should be subject, in effect, to the same regulatory and
supervisory treatment, regardless of the nature of the agent and its technical
means of operation. There is substantial scope for international cooperation and
coordination in these fields because developments in asset management and
FinTech tend to cross borders quite easily. There is also a lot to be done in
cooperation between different authorities. International coordinating bodies,
such as the Financial Stability Board, are the natural fora for the authorities to
elaborate common strategies

Banking Sources
There are two main types of financial institutions: banking and non-banking.
Banking institutions include commercial banks, savings and loan associations,
and credit unions. Non-banking financial institutions include insurance
companies, pension funds, and hedge funds.
Banking Financial Institutions
Banking financial institutions are in the business of taking deposits from the
public and making loans. In addition, they provide other services such as
investment banking, foreign exchange, and safe deposit boxes. These
 institutions are heavily regulated by governments to protect consumers and
ensure that the banking system is stable.

Types of Banking Financial Institutions

There are two types of banking financial institutions: depository and non-
depository.

 Depository institutions include banks, savings and loans associations, credit

unions, and mutual savings banks
 Non-depository institutions include finance companies, insurance companies,
and pension funds

What are Non-Banking Financial Institutions?

Non-banking financial institutions (NBFCs) are companies that provide

financial services such as lending, insurance, and investment banking but that
are not regulated as banks. This means that they have a different set of rules and
regulations to follow.

Types of Non-Banking Financial Institutions

There are a few different types of non-banking financial institutions, which

include:

1. Insurance companies: These companies sell insurance policies to individuals

and businesses. The policies can provide coverage for things like car accidents,
medical expenses, or property damage.
2. Investment banks: These banks help companies raise money by issuing and
selling securities. They also provide advice on mergers and acquisitions, and
they trade stocks and bonds.
3. Pension funds: These funds provide retirement income for workers. The money
is invested in stocks, bonds, and other assets.
4. Mutual funds: These funds pool money from investors and invest it in a
portfolio of stocks, bonds, and other assets.
5. Hedge funds: These funds are private investment partnerships that use a variety
of investment strategies to make money.
6. Private equity firms: These firms invest in private companies and help them
grow. They may also take the companies public.
7. Venture capital firms: These firms invest in early-stage companies with high
growth potential.

Each of these non-banking financial institutions serves a different purpose, but

they all work towards the ultimate goal of providing funding for businesses and
individuals.

How do Non-Banking Financial Institutions differ from Banks?

There are a few key ways that non-banking financial institutions differ from
banks.

1. Non-banking financial institutions are not regulated by the government like

banks are. This means that they are not subject to the same laws and regulations.
2. Non-banking financial institutions do not take deposits from customers. Instead,
they raise money by selling securities or borrowing money.
3. Non-banking financial institutions are not required to maintain a reserve ratio
like banks are. This ratio is the percentage of deposits that a bank must keep in
reserve in case of withdrawals.
4. Non-banking financial institutions are not subject to the same capital
requirements as banks. This means that they are not required to have a certain
amount of money in the reserve to protect against losses.
5. Finally, non-banking financial institutions are not subject to the same lending
restrictions as banks. This means that they can lend money to anyone they
choose, without having to follow the government’s guidelines.

These differences between banks and non-banking financial institutions can

make it easier for businesses to access funding. However, it is important to
remember that non-banking financial institutions are not regulated in the same
way as banks, so it is important to do your research before choosing one.

The non-banking financial institutions

The non-banking financial institutions are the organizations that facilitate bank-
related financial services but does not have banking licenses. This article will
help UPSC civil service exam aspirants understand the various types of non-
banking financial institutions and their respective functions in this article.
Candidates would find this topic to be of importance while preparing for
the IAS Exam.

Non-Banking Financial Companies – Latest Updates

Recently, the Reserve Bank of India has proposed a tighter regulatory

framework for Non-Banking Financial Institutions by creating a four-tier
structure with a progressive increase in the intensity of regulation. Further
information about the Reserve Bank of India is available in detail on the linked
page.

 It has also proposed the classification of Non-Performing Assets of base

layer NBFCs from 180 days to 90 days overdue. Read more on Non
Performing Assets – NPA in detail on the linked page.
 Earlier in 2020, the RBI announced a host of measures to
provide liquidity support to NBFCs.
The share of NBFC-MFIs (microfinance institutions) in the overall
microfinance sector has come down to a little more than 30% as several large
MFIs had converted into Small Finance Banks.

Non- Banking Financial Institutions – Types

Mutual Funds

1. Mediators between people and stock exchange

2. Money collected from people by selling their units is called the corpus
3. Oldest Mutual Fund company in India is UTI ( Unit Trust of India)
4. Mutual Funds nearly provides all the considerations
Insurance Companies

1. Collect money from the public through the sale of insurance policies
2. There are two types of Insurance – Life Insurance and General Insurance
 General Insurance includes Loss of property, car, house etc.
 It also includes Health Insurance

Hedge Funds

1. These are mutual funds for rich investors

 2. Funds are raised through the sale of their unit to High net worth
Individuals and Institutional Investors
3. Units of these are usually sold in chunks/groups
4. There is a lock-in period for Hedge funds before which funds cannot be
withdrawn
5. Corpus is an investment in risky instruments with a long term perspective

Meaning of Venture Capital

Entrepreneurs need investments for their start-up companies. The investments
or the capital that these entrepreneurs receive from wealthy investors is called
Venture Capital and the investors are called Venture Capitalists.

VC firms reduce the risk of investments by co-investing with other VC firms.

Usually, there will be the main investor called the ‘lead investor’ and other
investors will be called ‘followers’.

Venture Capital Firms/ Companies

1. They provide finance and technical assistance to firms which undertake a

business project based on innovative ventures
2. They provide finance for the commercial application of new technology

Examples:
Merchant banks ( Investment Banks)

1. Merchant banks provide financial consultancy services

2. They advise firms on fundraising, manage IPO of firms, underwrite new
issues and facilitate demat trading.
Finance Companies (Loan Companies)

1. Financial Institutions raise funds from the public for lending purpose
2. e.g. – Muthoot Finance, Cholamandalam
Micro Finance Institutions (MFI)

1. Raise funds from the public for lending to weaker sections

2. In India, they mainly raise funds from banks
3. e.g. – Basix, Bandhan, SKS Micro Finance.

Vulture Funds
 1. These funds buy stocks of companies which are nearing bankruptcy at a
very low price.
2. After purchasing such stocks, they initiate the recovery process to
increase the price of shares and sell it at a later point of time
Islamic Banks

1. These banks provide loans on the basis of Islamic laws called Sharia.
2. In the law of Sharia Interest cannot be charged on the loans
Leasing Companies

1. They purchase equipment and machinery and provide the same to

companies on a lease.
2. These companies charge rent on these machineries which is similar to
EMI

Working of Venture Capital Fund

1. Venture Capital Fund is made up of investments from wealthy individuals

or companies who give their money to a VC firm to manage their
investment portfolios for them and to invest in high-risk start-ups in
exchange for equity.
2. The basic idea is to invest in a company’s balance sheet and
infrastructure.
3. Venture Capitalist nurtures the idea of an entrepreneur for a short period
of time and exits with the help of an investment banker.
4. In a start-up company, VC will receive an equity partnership in exchange
for investments in the start-up company.

What are the types of Venture Capital funding?

As per the ideation stage, age of start-up company and its performance over the
years, venture capital funding can be categorised into different types.

Below table gives a list of the types of venture capital funding and their features

Advantages of Venture Capital

1. Banks usually prefer to finance a new business which has hard assets. In
the current information-based economy, new start-ups hardly have any
hard asset. Venture Capitalists step in under these circumstances.
 2. They can provide more insights into the market.
3. Can help in strategy formulation.
4. Can help in developing strategic networks

Role of Venture Capital in Entrepreneurship.

1. The partnership is a combination of limited and general partners.

2. The life of the fund ranges from 7 years to 10 years.
3. The VC fund investments take place over the course of the first two to
three years and the returns are usually obtained over the last 2 or 3 years.
4. In today’s scenario, the average fund managed and the number of
investments managed is much more than what it used to be in the past.

Importance of Venture Capital

Venture Capital industry in the USA is considered as an engine of economic
growth. The modern-day computer industry in the USA was created partly due
to the capital made available by early venture capitalists like Tom Perkins,
Tommy Davis, Eugene Kleiner, Arthur Rock.

Ways of working in Venture Capital firms.

1. Venture capital funds usually go into a particular industry in a particular

time period. For example, in the 1980s in the US, Venture Capital (VC)
funds majorly went into the energy industry, later on, it shifted into
genetic engineering, telecom industry and software companies. In the
next stage, VC funds concentrated more on the Internet-based industry.
2. One can safely conclude that VC funding is guided more by the growth
potential in a particular industry rather than the potential and skills of
individual entrepreneurs.

Types Of Venture Capital And How Do They Help Startups?

Venture capital is private equity finance offered by investors to startups and
small firms with the potential for explosive growth. To finance the first costs of
research and development or to pay for business expansion, venture capital is
often utilized in the beginning stages of a company's development.

There are numerous varieties of venture capital, and each has advantages and
disadvantages of its own. Seed funding, angel investing, and venture loans are
 the three most popular forms of venture capital. Let us look at the various types
of venture capital and how they help businesses.
Seed Money
If you want to start a firm, consider the seed money option. Some venture
capitalists are willing to invest now, even if your product or business isn't fully
developed.

Even though the fund only has a small amount, the business can benefit from it.
For instance, to carry out market research, pay for office expenses, or create
product samples.

Startup Money

Assisting the business in creating a functional prototype is what is meant by

"startup capital." For instance, investing in office buildings, recruiting new
employees, and conducting more market research

At this point, a few venture capitalists are willing to provide money, though not
much.

On the other hand, startups must work harder to locate businesses that will fund
them.

Getting advice from business specialists to generate a profit is one of the things
you may do if you need money at this point. Additionally, display to the
investor your brilliant market research and its potential.

Advantages of Venture Capital

 Venture capitalists present a chance for growth

 Venture capitalists facilitate networking.
 Businesses can raise a significant amount of money.
 Guidance, advice, and knowledge can be found in venture capital.
 No commitment to pay back the capital investment
 Generally speaking, venture capitalists are reliable.
 Venture capitalists can aid in team building and hiring.
Government Schemes for Funding Business
Here are the top six business loan schemes by government of India for new
businesses-
 MSME Loan Scheme
 Credit Guarantee Fund Scheme
 MUDRA Loan
 Credit Link Capital Subsidy Scheme
 National Small Industries Corporation Subsidy
 SIDBI Loan

. MSME Loan Scheme

The MSME business loan scheme was launched by the Government of India
to focus on the working capital requirement of industries in the MSME
sector. Any business can avail loans under the MSME scheme, be it new or
existing, for financial assistance of up to ₹1 Crore. The loan processing takes
8-12 days to complete, while the approval or disapproval is granted within
the first 59 minutes of the application.

The best part of the MSME Loan Scheme is that you get the loan at 8% ROI,
making the loan repayment easier. There is a reservation of 3% for women
entrepreneurs for loans availed under the MSME Loan Scheme. Moreover,
the loan approval process is also comparatively easier for women
entrepreneurs.
2. Credit Guarantee Fund Scheme
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)
has been facilitating collateral-free loans for MSMEs for quite a long time
now. Any scheduled commercial or regional rural bank can become a part of
the CGTMSE scheme by empanelling itself as a leading authority. The
agency grants loans to MSMEs based on their credit standing via the lending
agencies registered with it. The CGTMSE scheme provides working capital
loans of up to 10 Lakhs without any collateral. However, for all credit
facilities of amounts greater than ₹10 Lakhs (and up to ₹1 Crore), only
primary security or mortgage of land and building will be covered under this
government business loan scheme.
3. MUDRA Loan
The Micro Units Development and Refinance Agency (MUDRA) has a
funding scheme where small businesses and start-ups can get financial
support in low-cost credit. MUDRA loan is typically for micro or small
businesses that operate in the manufacturing, trading, and services sectors.
MUDRA Loans can be applied for through public and private sector banks,
cooperative societies, small banks, scheduled commercial banks, and rural
 areas. A business firm can apply for the MUDRA loan scheme in three
categories.

 Shishu Loan: up to ₹50,000

 Kishor Loan: up to ₹5,00,000
 Tarun Loan: up to ₹10,00,000
4. Credit-Linked Capital Subsidy Scheme
The purpose of this government business loan scheme is to fund
technological upgrades in businesses. The funds can be used to undertake
revamps related to the various processes involved in the business, such as
manufacturing, marketing, and supply chain, so that the production cost for
creating and providing goods and services is reduced. The CLCSS offers an
up-front capital subsidy of 15% for eligible businesses under the scheme.
Sole proprietorship businesses, partnership firms, and co-operative or private
and public limited companies are all eligible for loans under CLCSS.
National Small Industries Corporation Subsidy
The NSIC offers MSMEs two types of funding benefits:

 Raw material assistance

 Marketing assistance
Any business that qualifies as a micro and small enterprise with an EM Part -
II (Optional)/ Udyog Aadhaar Memorandum (UAM) is eligible to apply for
the NSIC subsidy under the Single Point Registration Scheme (SPRS).
Suppose you qualify for this business loan scheme. In that case, you can opt
for raw material assistance that allows you to fund the cost of indigenous and
imported raw material required for your business.

As far as marketing assistance is concerned, you can use the funds to enhance
your competitiveness and the market value of your offerings. The NSIC
subsidy scheme also overlooks the functioning of an MSME and supports it
in its endeavour to enrich production and quality.
SIDBI Loans
SIDBI or Small Industries Development Bank of India was set up in 1990 to
cater to the financing needs of industries in the MSME sector. SIDBI
provides loans directly to MSMEs and offers indirect loan schemes to
NBFCs (Non-Banking Financial Companies) and SFBs (Small Finance
Banks). The loan amount can be between ₹10 Lakhs and ₹25 Crores, while
the loan tenure can go up to 10 years. Loans up to ₹1 Crore can be availed
without any collateral.
MSMEs can avail loans from SIDBI under various loan schemes by the bank,
including SIDBI-Loan for Purchase of Equipment for Enterprise’s
Development (SPEED), SIDBI Make in India Soft Loan Fund for MSME
(SMILE), Smile Equipment Finance (SEF), and others. The loan tenure, loan
amount and eligibility criteria are different for every loan scheme. So you
can make the most of government loan schemes for new business.

As MSMEs are consistently growing in India, various lending institutions

now offer exclusive loan products for MSMEs. At Bajaj Markets, you can
apply for an SME loan for your business at attractive interest rates. The Bajaj
Markets app allows you to apply for SME loans easily, and you might also
get pre-approved offers on the app.

Pre-launch.

The pre-launch phase lays the basic groundwork for establishing your business
and outlines the resources you’ll need to get started.

1. Decide on a business name and secure the web domain

The name of your business can have a huge impact on its success. A name that’s
too long, hard to spell, or hard to pronounce might cause marketing issues down
the road. Your name should be able to grow with your company, so avoid
names that are limited to one product or location.

Once you have decided on your business’s name, register a web domain for it. If
you can, try to secure a “.com” domain—they’re easier for potential customers
to remember and are often associated with an established business.

2. Write a business plan

Our business plan is a roadmap that begins with the business’s vision and goals
and includes resources, funding, market analysis, and financial projections. If
you have potential investors or partners, they will want to know this information
before backing your business.

3. Decide on the business’s taxation structure

Decide if you’ll be running the business as a sole proprietorship, partnership,

limited liability company (LLC), C corporation, or S corporation. Each entity
type comes with its share of tax advantages and drawbacks, so do your research
before making a final decision on the business structure

4. Apply for licenses and permits

Depending on the type of business you will have, certain licenses and permits
may be required to operate. Some of these application processes may be
lengthy, so it’s wise to begin this step early in your plan.

Unless your business activities will be regulated by a federal agency, you won’t
need a federal license or permit. However, your local government will require a
business license.

5. Open business bank accounts

Business bank accounts commonly include checking, savings, credit card, and
merchant services. These accounts allow your business to accept credit cards
and allow customers to make checks out to your business. Separating your
personal and business accounts not only makes bookkeeping easier but gives
your business greater credibility.

6. Arrange for office and storage space

If you’re not going to run your business from home, renting office and storage
space should be next on your pre-launch to-do list. The best way to find
commercial office space is to look through online listings or brokers for spaces
that meet your budget and needs.

7. Get small business insurance

Insuring your small business is just as important as insuring your home or car. It
protects your business from claims that could easily deplete your resources.
Policies commonly consist of general and professional liability insurance, and
business income coverage. If you employ others, you’ll also need workers’
compensation insurance.
8. Set up your bookkeeping system

You’ll need accurate financial records to file your business taxes on time, and
getting this set up sooner rather than later will save you the headache of sorting
out a messy backlog of financial entries and reports.

Choose a suitable accounting or bookkeeping software package for your

business. The right package will vary depending on your business needs, so
check out our guide to the top bookkeeping solutions for small businesses if you
need help getting started.

9. Establish your online presence

If you haven’t done so already, now is the time to follow through on getting
your business online. Since you should already have your domain name, the
next step is to design and build an easy-to-navigate website for it.

Get the word out on social media. Social media allows you to interact with
prospective customers who may be interested in your brand, which can generate
more sales. Start by thinking about which social platforms your ideal customer
uses most often: are they more likely to be found on Facebook, Instagram,
Twitter or maybe TikTok Set up accounts on the networks that make the most
sense for your business and audience.

10. Hire employees

You may plan to start your business as its only employee, but if you plan to
recruit outside help, make sure you have fulfilled all of your legal
requirements beforehand. Then, create a job description to attract qualified
candidates and spread the word on sites Indeed, CareerBuilder, and your social
media like platforms.

11. Spread the word that you’re open for business

Build up the buzz about your grand opening on the social media channels you
established during the pre-launch phase. Simple word-of-mouth can work
wonders, so ask family and friends to spread the good news too.

12. Attract customers with freebies and giveaways.

Give out sample items or include free products with selected purchases. Have
random prize drawings periodically throughout the launch period.
13. Collect emails to create a customer loyalty program
Running a points-style reward program is a great way to entice customers to
purchase from your business. The email addresses you collect from the program
can be used to continue the conversation with your new customers.

Post-launch.

Follow this post-launch checklist to make sure that you can keep your
customers coming back.

14. Monitor your social media channels

Keep a close eye on your social media, making sure to review your customers’
feedback as well as any suggestions for improvements. Social media is a
conversation, so don’t forget to respond to any questions or comments. Keeping
your social media presence active is a good way to stay top-of-mind with your
target audience.

15. Analyze your sales results

Track how many sales per day, total conversions, cash flow, and total revenue
your business had during the launch period. Monitoring these results monthly
will help you keep close tabs on any potential spending issues and track your
profits.

16. Check website performance

Review your website analytics and make sure your site is functioning as
expected. Things like slow load times and broken links can be off-putting to
potential customers and lead to lost sales.

17. Evaluate your marketing strategies

After you have a better sense of your business needs and capacity, take some
time to think about what your ideal marketing efforts would look like. Decide
where your time is best spent

How Bench can help

Launching a new business venture can be a rewarding experience. However, it

requires careful planning and decision-making to ensure you start off on the
right foot. During this hectic time, you may find that setting up your
bookkeeping system is too overwhelming to tackle by yourself.

At Bench, your bookkeeper works closely with you to set up your books and
keep them current and accurate. We’ll handle your bookkeeping and tax filing
requirements, so you can focus on growing your new business.
Definition of Startup

A Startup typically means a company that is in the first stage of its operations.
A Startup is a young company that is just beginning to develop. Startups are
usually small and initially financed and operated by a handful of founders or
one individual. These companies offer a product or service that is not currently
being offered elsewhere in the market, or that the founders believe is being
offered in an inferior manner.

Registrations required for Startup

 Business Registration for Startup

The first thing that is required to start a new business or Startup is getting the
business registered. There are many business structures from which you can
choose the best one for you. The various kinds of business structures in India
are as follows:

 Private Limited Company

 Public Limited Company
 One Person Company
 Limited Liability Partnership
 Partnership Firm
 Sole Proprietorship
 NGO/Trust
 Nidhi Company

A new business must get incorporated in any of these business structures as per
the scale of its operations, capital invested, number of members, and the risk
associated with the business. The features, pros and cons of each business
structure are different and the entrepreneur must consult a business expert to
know which structure will suit its requirements.

 Startup India Registration

When the business comes under the definition of a Startup as per the DIPP
Notification, it can get its Startup India registration done. A business registered
as a Private Limited Company under the Companies Act, 2013, as a Partnership
Firm under Section 59 of the Partnership Act, 1932 or as a Limited Liability
Partnership under the Limited Liability Partnership Act, 2008 can get Startup
India Registration if it fulfils the following criteria:
  It has not been more than 10 years from the date of business registration.
 The annual turnover of the entity for any financial year since its
registration has not exceeded Rs. 100 crores.
 The business is working towards innovation, development or
improvement of products or processes or services, or if it is a scalable
business model with a high potential for employment generation or
wealth creation.

Recommended read by Ebizfiling: Startup India recognition and its

benefits

 MSME Registration

MSME Registration can be obtained by micro, small and medium enterprises in

India to enjoy various subsidies and benefits in terms of loans, taxation, and
other schemes. There are multiple benefits laid down by the MSMED Act for
micro, small and medium enterprises for their machinery and raw material
which can be purchased at a subsidised rate.

 GST Registration

All manufacturers, sellers, service providers, exporters, etc. need to get their
GST Registration in India. All kinds of business Startups need to get GST
registration in the following cases:

 When the aggregate turnover is more than INR 20 lakhs, or INR 10 lakhs
in Special category states.
 If the business supplies goods intra-state.
 When the business sells goods or provides services online.
 When the business held tax registration under the previous tax regime.

In addition to the above criteria, various other criteria has been provided under
the GST Act, establishing the criteria for GST registration.

GST registration must be obtained within 30 days of business incorporation,

otherwise, the business will be subject to heavy penalties.

 Udyog Aadhar Registration

Udyog Aadhaar Registration is the new initiative of the Government to support

small-scale businesses. Indeed the process of Udyog Aadhaar Registration has
come as a replacement to the SSI Registration or/and MSME
Registration. Once, Udyog Aadhaar registration is obtained for a business, it can
enjoy various subsidies and schemes specially provided by the Government for
helping small businesses in India.

Licenses for Startup

Apart from the above registrations there are certain licenses required to be
obtained for specific kinds of Startups such as shops & establishments, food
business, Import Export business, Financial institutions etc. which are as
follows:

 Shop And Establishment License for Startup Registration

Every state has its own Shop and Establishment Act which provides for the
rules to be followed by every shop and establishment running its business in the
state. The Act also provides for shop and establishment license or trade license.
A business that comes under the definition of shop and establishment must
obtain the Shop and Establishment Certificate without fail to avoid penalty and
fine.

 Import Export Code Registration

All importers who wish to import or export of goods / services from India need
to have a valid IE Code. IE Code must be mentioned in all relevant customs
documents. Bankers would require you to have valid IEC registration for
making payments abroad. To obtain Import Export Code, it is mandatory to
have a PAN and a current Account in a bank.

Apart from this certain businesses for non-banking financial institutions or fin-
tech companies NBFC registration is required while for multimedia
broadcasting platforms Broadcasting licenses are required to be obtained.

Get all registrations and licenses required for your Startup and other compliance
services with Ebizfiling.com at very affordable prices. To know more about
Startups you can subscribe to Startup Advisory Services of Ebizfiling.com.

Challenges in starting and Enterprise.

Starting your own business brings many benefits.

Doing something that you love and attracting customersopens in new
window to buy the product or service you’ve created is hugely rewarding.
Growing a company and providing jobs for other people can be another big
thrill.
But running your own business is not easy.
Working for yourself without the safety net of being an employee can be
a lonely, frustrating and challenging experienceopens in new window.
By understanding the challenges you might face and how to deal with them,
you’ll be much better prepared for potential problems and give your business
the best chance of success.
1. Failure to plan
CHALLENGE: With the excitement of a new business idea, it can be tempting
to launch without much forward-thinking opens in new window.
Yet a lack of planning can mean your business runs out of cash opens in new
window or isn’t prepared for vital activities such as marketing or dealing with
suppliers opens in new window.
Business owners who plan and set themselves objectives are more likely to
succeed.
2. Lack of demand
CHALLENGE: Understanding the market need for your product or service is a
crucial aspect of your business plan.
Without enough people willing to buy your product or serviceopens in new
window, your start-up won’t succeed, no matter how great your idea.
3. Ineffective marketing
CHALLENGE: It can be easy to get caught up in the latest marketing trends
and spend lots of money on marketing techniques that end up costing you more
than the sales they generate.
4. Knowledge and skills gaps
CHALLENGE: As a first-time entrepreneur, it’s unlikely you’ll know
everything about running a business.
A lack of knowledge can lead to avoidable mistakes that could cost your
business money.
You’ll also need to overcome enormous demands on your time and energy
setting up a business.
5. Financial management
CHALLENGE: Poor financial planning is one of the biggest reasons start-ups
fail.
If your costs are greater than the revenueopens in new window coming in,
your business won’t succeed.
6. Securing funding
CHALLENGE: One way to manage your cash flow is by securing funding, but
raising finance can be challenging and it can be hard to know where to get cash
for your business idea.
7. Hiring the right people
CHALLENGE: The people you recruit as employees can greatly harm your
start-up’s success.
A negative employee can quickly damage team morale and productivity.
It’s tough having to fire someone but having the wrong people in your start-up
can be very disruptive.
8. Leadership
CHALLENGE: As your start-up grows and you build a team, your employees
will look to you for strong leadershipopens in new window.

9. Time management and productivity

CHALLENGE: Managing your time effectively is crucial when launching a
start-up.
New business owners have to wear so many hats that it can be easy to get
distracted and focus on the wrong areas.
If you have an important task to complete, find a quiet area to do it and turn off
email, app and messaging notifications.
Outsourcing tasks is another way to manage your time better.

10. Impact on your health

CHALLENGE: Running your business isn’t like having a 9 to 5 job.
Without care, it can be all-absorbing and take over your life.
You need to take steps to safeguard your mental and physical wellbeingopens
in new window.

Conclusion

In conclusion, banks and non-banking financial institutions, play a significant

role in the financial sector. However, they differ in terms of their functions and
the products and services they offer. Banks are mainly focused on providing
retail banking products and services, while non-banking financial institutions
offer a wider range of products and services, including corporate banking,
investment banking, and private banking.

Prepared By
DEPARTMENT OF PEDAGOGICAL SCIENCES
Prof. p.Ganesan
Prof.P.C.Naga Subramani
Dr.A.Magalingam. Assistant Professor
Dr.M.Muthamizhselvan. Assistant Professor
Dr.L.George Stephen. Assistant Professor
Dr.P.Jaganathan. Assistant Professor