Bachelor of Commerce

(Applicable for students admitted from Academic Year 2021-22 onwards)Course Curriculum
Structure VTR UGAS 2021
Semester- VI

B.Com. - General / Corporate Secretary ship/ Accounting and Finance/ Professional Accounting

Course Code Course Title

80212GE109 Entrepreneurship Development
80212AF109
80212CR109

Unit Course Contents

Introduction to Entrepreneurship
I
Meaning – Characteristics– Types of Entrepreneurships – Self Employment – Difference
between Entrepreneurship and Employment – Meaning of Entrepreneur – Traits – Classification –
Functions – Entrepreneurial Scenario in India.
Design Thinking
II
Idea Generation – Identification of Business Opportunities – Design Thinking Process – Creativity
– Invention – Innovation – Differences – Value Addition – Concept and Types – Tools and
Techniques of Generating an idea – Turning Idea into Business Opportunity.
III Setting Up an Enterprise
Process of Setting Up an Enterprise – Forms of an Enterprise – Sole Proprietorship –
Partnership – Limited Liability Partnership Firm – Joint Stock Company – One Man partnership
– Choice of Form of an Enterprise – Feasibility Study – Marketing, Technical, Financial,
Commercial and Economical.
IV Business Model Canvas and Formulation of Project Report
Introduction – Contents of Project Report – Project Description – Market Survey – Fund
Requirement – Legal Compliance of Setting Up of an Enterprise – Registration – Source of Funds –
Modern Sources of Funds.
Women Entrepreneurship and Support Institutions
V
Women Entrepreneurship and Empowerment – Women Entrepreneurship in India- Importance
of MSME for Economic Growth – MSME – Definition – Role of Government Organizations in
Entrepreneurship Development – MSME DI – DIC – Khadi and Village Industries Commission –
NSIC – NABARD, SICVI, SFC, SDC, EDII, EPCCB. Industrial Estates – Government Schemes
– Prime Minister Employment Generation Programme.

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1. Meaning of Entrepreneurship
Entrepreneurship is the ability and readiness to develop, organize and run a business
enterprise, along with any of its uncertainties in order to make a profit. The most prominent
example of entrepreneurship is the starting of new businesses. In economics, entrepreneurship
connected with land, labour, natural resources and capital can generate a profit. The
entrepreneurial vision is defined by discovery and risk-taking and is an indispensable part of a
nation’s capacity to succeed in an ever-changing and more competitive global marketplace.
Process of Entrepreneurship Development
1. Discover
Any new process begins with fresh ideas and objectives, wherein the entrepreneur
recognizes and analyzes business possibilities. The analysing of opportunities is a risky task,
and an entrepreneur looks out for inputs from other persons, including channel partners,
employees, technical people, consumers, etc. to reach an ideal business opportunity.
2. Evaluation
The evaluation of an opportunity can be done by asking several questions to oneself.
For instance, questions like whether it is worth taking a chance and investing in the idea, will
it attract the consumer, what are the competitive advantages and the risk linked with it are
asked. A reasonable and sensible entrepreneur will also analyse his skills and whether it
matches his entrepreneurial objectives or not.
3. Developing a plan
After the identification of an opportunity, an entrepreneur has to build a complete
business plan. It is the most important step for new business as it sets a standard and the
assessment criteria and sees if a company is working towards the set goals.
4. Resources
The next step in the process of entrepreneurial development is resourcing. Here, the
entrepreneur recognizes the source of finance and from where the human resource can be
managed. In this step, the entrepreneur also tries to find investors for his new business.

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5. Managing the company
After the hiring process and funds are raised now it’s time to start the operation to
accomplish the desired goals. All the entrepreneur will decide on the management structure
that will be assigned to resolve the operational problems whenever it occurs.
6. Harvesting
The last step in this process is harvesting, where an entrepreneur determines the future
growth and development of the business. Here, real-time development is compared with the
projected growth, and then the business security or the extension is initiated accordingly.
Types of Entrepreneurships
In the initial states of economic development, entrepreneurs tend to have less initiative
and drive. As development proceeds, they become more innovating and enthusiastic.
Similarly, when entrepreneurs are shy and humble the environment is underdeveloped.
Business environment becomes healthy and developed when entrepreneurs are innovating.
1. Small Business Entrepreneurship
Small business entrepreneurship refers to opening a business without turning it into a
large conglomerate or opening many chains. A single-location restaurant, one grocery shop, or
a retail shop to sell goods or services would all be examples of small business entrepreneurship.
These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter,
plumber, electrician, etc. These people run or own their own business and hire family members
or local employee. For them, the profit would be able to feed their family and not making 100
million business or taking over an industry. They fund their business by taking small business
loans or loans from friends and family.
2. Scalable Startup Entrepreneurship
This entrepreneurship is focused on bringing a positive and big change to the
world. Their prime source of capital is those investors who promote the entrepreneurs with
unique ideas and plans. Such entrepreneurship encourages scalable business and experimental
models so the appointment of the best and most deserving employees can be done. This
research-based model demands more venture capital to run the business.
3. Large Company Entrepreneurship
These companies are run and operated at a very large scale and have their branches in
different places. The main strategy of these companies is to grow and sustain in the market by
offering new and innovative products to the customers. In most cases, these products are related
to their main product. Large companies are always aware of changes in technology, customer
preference, and taste, new competition, etc. These conditions create pressure on these
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companies to use an innovative idea not only to manufacture the products but also to sell them
to add new customers and compete with other sellers. For this purpose, these companies either
buy an innovation enterprise or try to manufacture the products internally.
4. Social Entrepreneurship
Social entrepreneurship is aimed at producing those products and services that help in
solving the problems and issues of society and fulfilling social needs. These entrepreneurs are
focused on serving society not on earning profits.
2. Entrepreneur
Introduction
Entrepreneurs are action-oriented highly motivated individuals who take risks to
achieve goals. An entrepreneur is an innovator of a new combination in the field of production.
The entrepreneur is the founder of the enterprise who identifies opportunities, assembles skilled
manpower and necessary resources for the operation of the enterprise, attracts persons and
financial Institutions and takes psychological responsibility for managing the enterprise
successful.
Entrepreneur as an Innovator
Joseph A, Schumpeter, for the first time in 1934, assigned a crucial role of ‘innovation’
to the entrepreneur in his magnum opus ‘Theory of Economic Development’. Schumpeter
considered economic development as a discrete dynamic change brought by an entrepreneur
by instituting new combinations of production, i.e., innovations. The introduction of a new
combination of factors of production, according to him, may occur in any one of the following
five forms are:
➢ The introduction of a new product on the market;
➢ The instituting of a new production technology which is not yet tested by experience in
the branch of manufacture concerned;
➢ The opening of a new market into which the specific product has not previously entered;
➢ The discovery of a new source of supply of raw material; and
➢ The carrying out of the new form of organization of any industry by creating a
monopoly position or the breaking up of it.
J. Schumpeter also made a distinction between an inventor and an innovator.
An inventor is one who discovers new methods and new materials. An innovator
utilizes inventions and discoveries to make new combinations. Experts in the field of
economics, business and sociology have defined entrepreneurs from various points of
view.
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Definition of Entrepreneur
Adam Smith (1776) considers entrepreneur as a proprietary capitalist who supplies
capital and works as a manager intervening between labour and the consumer.
Francis A. Walker (1870) calls the entrepreneurs as engineers of progress and the chief
agents of production.
F. H. Knight (1921) propounds that entrepreneurs are a specialized group of persons
who bear risks and deal with uncertainty.
J-A. Mill (1848) advocates for using the word entrepreneur in the sense of an organizer
who is paid for his non-manual type of work.
J.B. Say (1824) defines an s entrepreneur as “an economic agent who assembles factors
of production, see the s price of produce in such a way that ensures the cost and profit, re-
accumulates capital and possesses administrative and productive knowledge.”
Economic Activities of Entrepreneur
Herberton G. Evans (I957) defines, “Entrepreneur Is the person or group of persons
who have the task of determining the kind of business to be operated.”
Characteristics of Entrepreneur
1. Entrepreneur is an agent
An entrepreneur is perceived as an economic agent who assembles materials for
producing goods at a cost that ensures profits and re-accumulation of capital.
2. Entrepreneur is a risk-taker
Many experts – old and new, have emphasized this characteristic. Back I955, Redlich
pointed out that an entrepreneur is a person who identifies the nature of risk and takes a
decision.
3. Entrepreneur is a profit maker
An entrepreneur is an individual who establishes and manages the business for the
principal purpose of profit and growth.
4. Entrepreneur is an achievement motivator
David C. McClelland has initiated this concept of the entrepreneur by calling him “as
per sun with a strong desire for achievement.
5. Entrepreneur is a capital provider
Entrepreneur a person who operates a business by investing his or her capital. Abbett
first pointed out this characteristic in 1967.
6. Entrepreneur is the determinant of the nature of the business

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 This characteristic /concept of the entrepreneur was promoted by Evans in 1957 It says
that an entrepreneur is the person or group of persons who perform the task of determining the
kind of business to the operated.
7. Entrepreneur is an Innovator
Joseph A. Schumpeter {1934) characterized entrepreneur as an innovator of a new
combination in the field of production Later on Robinson (1962) and Hagen (1962) have
described entrepreneurs as a person who lakes a small venture to the edge of success by his
efforts, innovation and motivation.
8. Entrepreneur is a reward receiver
An entrepreneur is a person who creates something new of value by devoting time and
efforts and in tum receives monetary and personal rewards.
3. Idea Generation
Idea generation means to create, develop and communicate ideas which are concrete,
abstract, or visual. A company makes use of this process to come up with solutions to problems.
After the generation of ideas, the team works on validating the ideas, choosing the best one and
then coming up with a plan to implement it. Only after this does the team move on to the further
steps of building upon it. Idea generation is the first step of the complete innovation
management funnel. The idea may be something you can touch and see (tangible) or one which
is symbolic in nature.
Stages of Successful Idea Generation
1. Generation
The first stage is the generation of ideas, and we will be elaborating more on this in the
further sections. For this, the company would need to identify the needs. After this, they'd still
have to see to the core competencies and consumer insights before going ahead. Core
competencies in this context means making use of the company's strengths to work on an idea.
Consumer insights means checking if the consumers would be open to it. Existing surveys and
other such data can help with understanding the consumer mindset. Competitor performance
would also have to be checked.
2. Selection
This is where ideas are evaluated by the team or the important stakeholders. You'd first
have to decide a proper evaluation criterion and then check how your idea fits into it. They
figure out a way to prioritize ideas. After this, the team selects the best ideas from the set and
moves them to the implementation stage.
3. Implementation
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 To successfully implement ideas, your organization would need to have proper
workflows. A great team in which people take responsibility for the project is also needed.
Also, to guarantee the success of the implementation, the idea would have to be good. You can
say that the success of the implementation depends on the ability to choose the top ideas and
take action as needed. Of course, after implementation, there would also be distribution, sales,
etc. based on what the idea it.
Steps Involved Idea Generation
As already mentioned, the ways companies find ideas are different and need not be
uniform. But we will see what are the overall steps the company takes to come up with a new
idea. Thomas Edison proposed a streamlined set of steps for the idea generation process. This
is often used by product building and marketing teams. Here is a summary of the steps he
proposed.
Enable - This means searching for the field you want to develop an innovation in.
Define - In this stage, you'd be defining search queries and paths.
Inspire - Here, you'd be looking at other areas and try finding inspiration on how to go about
with things.
Select - This is where you'd be picking one idea from the various ones in mind.
Optimize - Take the initial idea and make it better by working on it and finalizing the concept.
4. Difference between Entrepreneurship and Employment
Introduction
Starting your own business or working for someone else is a big decision that can shape
your career and future. Entrepreneurship and employment are two popular career paths, each
with its own set of pros and cons. If you are trying to choose between the two, it’s essential to
understand the key differences and evaluate the potential benefits and challenges of each.
Entrepreneurship refers to the process of starting and running a new business venture,
typically with the goal of generating profit and growth. Entrepreneurs are individuals who
identify a need in the market and take the risk of starting a business to meet that need. They are
responsible for the success or failure of their businesses and often work long hours to make
their ventures successful.
Employment, on the other hand, refers to a relationship between an employee and an
employer, where the employee is hired to perform specific tasks and responsibilities in
exchange for a salary or wage. In employment, the employee typically receives benefits such
as a steady income, job security, and opportunities for advancement, but they also have less
control over the business and its direction.
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Difference Entrepreneurship and Employment
1. Risk vs. Security
Entrepreneurship involves taking on a high level of risk as the entrepreneur is
responsible for the success or failure of their business. In employment, the risk is largely
borne by the employer, and employees have a greater degree of job security.
2. Control vs. Structure
Entrepreneurs have complete control over their businesses and can make
decisions about the direction, strategy, and operations. In employment, employees have
less control and must operate within the structure and policies set by their employers.
3. Income Potential
The income potential in entrepreneurship is usually higher than in employment,
but it is also more uncertain and can be impacted by the success of the business. In
employment, the income is usually more stable, but there is a limit to the potential for
earning.
4. Schedule
Entrepreneurs often have more control over their schedule, as they are their own
bosses. However, they may also have to work longer hours and sacrifice personal time
to build their business. In employment, employees have a set schedule and may have a
better work-life balance, but they also have less control over their work hours.
5. Job Satisfaction
Entrepreneurship can provide a high level of job satisfaction as entrepreneurs
have the opportunity to create something of their own and see the direct impact of their
work. Employment-quo employment may not provide the same level of satisfaction for
everyone, but it can provide stability and a sense of accomplishment for some.
Conclusion
These are just a few of the key differences between entrepreneurship and
employment, and the right choice for an individual will depend on their personal goals,
skills, and preferences.
5. Innovation
Innovation is a process that questions that status quo, locates new solutions, and solves
problems for people in a unique way that adds value to their experience. As defined by idea
scale, “innovation is the process of creating or improving products, services and processes.

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Definition of Innovation

Innovation is the process of creating, developing and implementing new

ideas, methods or products that lead to significant positive change. It is about
recognizing and overcoming unmet needs or challenges by thinking creatively
and deviating from established practices. Innovation can occur in various fields,
such as technology, business, science and the arts, and it often leads to improved
efficiency, productivity or value creation. Key aspects of innovation include
originality, practicality and impact, and it requires a willingness to take risks and
embrace change. Successful innovation not only solves existing problems, but
often anticipates future needs and trends, drives progress and fosters growth in a
rapidly evolving world.

Unit – II Design Thinking

Idea Generation – Identification of Business Opportunities – Design Thinking
Process – Creativity – Invention – Innovation – Differences – Value Addition –
Concept and Types – Tools and Techniques of Generating an idea – Turning Idea into
Business Opportunity.
Idea Generation
Idea generation is the pivotal process of cultivating creative concepts and
solutions. It employs methods like brainstorming and SWOT analysis to foster
diverse thinking, stimulating innovation in problem-solving and project
development.

Idea generation is the creative process of developing new concepts, solutions,

or innovations. Whether you’re brainstorming for a school project, business
venture, or artistic endeavour, this process involves exploring different
perspectives, combining seemingly unrelated ideas, and breaking through mental
barriers.

Meaning of Idea Generation

This is the first and most important step in product development. It involves
collecting ideas from various sources. These sources include individuals, groups or

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communities willing to provide their ideas. Ideas are generated using various
techniques.

Importance of Idea Generation in Innovation and Problem-Solving

Idea generation is pivotal in innovation and problem-solving, the initial spark
driving progress. Take Apple Inc. as an example. Their relentless commitment to
idea generation has led to groundbreaking innovations like the iPhone. Apple has
revolutionized communication, work, and entertainment by continuously
generating and refining ideas. In problem-solving, idea generation helps identify
novel solutions. When Apple faced declining sales in the early 2000s, Steve Jobs’
idea to create sleek, user-friendly products and innovative marketing revitalized the
company. Thus, idea generation fuels innovation by spawning fresh concepts and
problem-solving by offering creative approaches to challenges, leading to
remarkable advancements and successful business strategies.

Techniques of Idea Generation

1. Brainstorming,
2. Mind Mapping,
3. SWOT Analysis and
4. SCAMPER Technique

1. Brainstorming

Brainstorming is a collaborative and creative technique to create a wide

range of ideas for a specific problem or task. It typically involves a group of
individuals but can also be done individually. The key principles of brainstorming
are:

Quantity Over Quality: The goal is to initially produce as many ideas as possible
without judgment or criticism. The more ideas, the better.

Free Expression: Participants should feel free to express any idea, no matter how
unconventional or seemingly impractical it may be.

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Build on Others’ Ideas: Encourage participants to expand on or combine ideas put
forth by others, fostering a collaborative atmosphere.

Example: In a brainstorming session for a new restaurant concept, team

members might suggest ideas like a themed menu based on classic movies, an
interactive dining experience, or a sustainable farm-to-table approach.

2. Mind Mapping

Visual brainstorming techniques like mind mapping help organize ideas in a

structured and interconnected manner. It starts with a central idea or concept and
branches into related subtopics or ideas. Key elements of mind mapping include:

Central Idea: Begin with a central topic or concept and write it down at the centre
of a page.

Branching: Create branches extending from the central idea, each representing a
subtopic or related concept.

Hierarchy: Subtopics can have further sub-branches, creating a hierarchical

structure that captures the relationships between ideas.

Keywords and Visuals: Use keywords and visual elements like icons or colours to
enhance understanding and memory.

Example: When planning a marketing strategy, you can create a mind map
with the central idea “Marketing Plan” branching into subtopics like “Target
Audience,” “Advertising Channels,” “Budget Allocation,” and “Key Performance
Indicators (KPIs).”

3. SWOT Analysis

SWOT Analysis is a strategic planning tool to assess a business or project’s

internal strengths and weaknesses and external opportunities and threats in the
market or environment. It involves the following components:

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Strengths: Identify the internal attributes and resources that provide a competitive
advantage. These could be skilled employees, cutting-edge technology, or strong
brand recognition.

Weaknesses: Recognize the internal limitations or areas where improvement is

needed, such as lack of funds, outdated infrastructure, or poor management.

Opportunities: Examine external factors that benefit the organization, like

emerging markets, changing consumer preferences, or new technologies.

Threats: Identify external factors that could harm the organization, such as
increased competition, economic downturns, or regulatory changes.

Example: In a SWOT Analysis for a small retail business, strengths might include
a loyal customer base, while weaknesses could involve limited financial resources.
Opportunities could include expanding into e-commerce, while threats might
include a downturn in the local economy.

4. SCAMPER Technique

The SCAMPER technique is a creative thinking tool offering seven ways to

manipulate existing ideas, products, or processes to generate new and innovative
solutions. Each letter in SCAMPER represents a specific action:

Substitute: Identify elements that can be substituted with something else. For
example, replacing traditional fuel in vehicles with electric power.

Combine: Merge different concepts, features, or ideas to create something new. An

example is combining a smartphone with a fitness tracker to create a health-
monitoring device.

Adapt: Modify an existing idea or concept to suit a new context or purpose.

Adapting a restaurant’s menu to cater to vegan or gluten-free diets is an adaptation.

Modify: Alter specific attributes or characteristics of an idea, such as changing the

size, shape, or colour. An example is modifying a backpack’s design to include solar
panels for charging devices.

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Put to Another Use: Find alternative uses for an existing product or concept.
Repurposing shipping containers into housing units is putting them to another use.

Eliminate: Identify elements, features, or steps that can be removed without

compromising the overall concept or function. Eliminating physical buttons on a
smartphone in favour of touchscreen technology is an elimination.

Reverse (or Rearrange): Change the order or sequence of elements in a concept.

Reversing the order of a recipe’s steps can lead to a new dish.

Example: Applying the SCAMPER technique to the concept of a traditional

bicycle, you might “Combine” it with an electric motor to create an electric bicycle
or “Reverse” the handlebars and pedals to create a recumbent bicycle.

TIPS FOR EFFECTIVE IDEA GENERATION

Creating a Conducive Environment: To enhance idea generation, provide an

atmosphere encouraging creativity. Offer a comfortable physical space, free from
distractions, where individuals can focus on brainstorming. For example,
companies like Google create innovation hubs with playful décor and relaxation
areas, like the Googleplex, to foster creativity and inspiration.

Encouraging Diversity of Thought: Embrace diverse perspectives and

backgrounds within your team. Different viewpoints bring a variety of ideas to the
table. For instance, Pixar Animation Studios credits its success to its diverse team
of storytellers, artists, and technologists, each contributing unique ideas that lead to
groundbreaking animated films.

Overcoming Creative Blocks: Teach techniques to overcome mental barriers.

Tools like meditation, brainstorming exercises, or time management strategies can
help. An example is author J.K. Rowling, who overcame writer’s block while
creating the Harry Potter series by changing her writing environment and routine,
allowing her ideas to flow more freely.

Conclusion

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 Idea generation is the lifeblood of innovation, problem-solving, and
creativity in all aspects of life and industry. It’s a dynamic process that thrives on
diversity of thought, conducive environments, and the ability to overcome creative
blocks. Individuals and organizations can tap into their creative potential with the
right techniques and mindset. It continuously produces fresh, valuable ideas that
drive progress and transformation. In an ever-evolving world, the power of idea
generation remains a vital force for shaping the future.

Stages of Successful Idea generation

The following is a brief summary of what happens from the idea generation
to the implementation stage.

Generation

The first stage is the generation of ideas, and we will be elaborating more on
this in the further sections. For this, the company would need to identify the needs.
After this, they'd still have to see to the core competencies and consumer insights
before going ahead. Core competencies in this context means making use of the
company's strengths to work on an idea. Consumer insights means checking if the
consumers would be open to it. Existing surveys and other such data can help with
understanding the consumer mindset. Competitor performance would also have to
be checked.

Selection

This is where ideas are evaluated by the team or the important stakeholders.
You'd first have to decide a proper evaluation criterion and then check how your
idea fits into it. They figure out a way to prioritize ideas. After this, the team selects
the best ideas from the set and moves them to the implementation stage.

Implementation

To successfully implement ideas, your organization would need to have

proper workflows. A great team in which people take responsibility for the project
is also needed. Also, to guarantee the success of the implementation, the idea would

14
have to be good. You can say that the success of the implementation depends on the
ability to choose the top ideas and take action as needed. Of course, after
implementation, there would also be distribution, sales, etc.

Steps Involved in Idea generation

Thomas Edison proposed a streamlined set of steps for the idea generation
process. This is often used by product building and marketing teams. Here is a
summary of the steps he proposed.

➢ Enable - This means searching for the field you want to develop an
innovation in.
➢ Define - In this stage, you'd be defining search queries and paths.
➢ Inspire - Here, you'd be looking at other areas and try finding inspiration on
how to go about with things.
➢ Select - This is where you'd be picking one idea from the various ones in
mind.
➢ Optimize - Take the initial idea and make it better by working on it and
finalizing the concept.
➢ Nurture - This is when you implement the idea in various ways to eventually
sell it.

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Unit – III Setting Up an Enterprise
Process of Setting Up an Enterprise – Forms of an Enterprise – Sole
Proprietorship – Partnership – Limited Liability Partnership Firm – Joint Stock
Company – One Man partnership – Choice of Form of an Enterprise – Feasibility
Study – Marketing, Technical, Financial, Commercial and Economical.
SETTING UP AN ENTERPRISE
Introduction
An enterprise is an industrial undertaking or a business concern or any other
establishment which is engaged in production or procurement of goods or services to
fulfil the demand of the customer. Setting up an enterprise is the whole process of
converting an innovative business idea into a realistic project to be able to reap profits
in the long run. Setting up an enterprise may not be as easy it looks. It involves a lot
of commitment, patience, proper planning and a regressive process to convert what is
there in your mind into a realistic entity.
A determined entrepreneur is the most crucial aspect of every successful business
project. In order to set up an enterprise, a suitable project has to be chosen. It involves
a systematic feasibility study, preparation of project profile. strategic planning,
deciding upon the constitution of the entity, preparation project report, obtaining
registration and clearance from related departments, resource mobilization, obtaining
funds and final implementation of the project. Based on the selection of product/service
to be offered, a project feasibility study has to be conducted and a brief product profile
is made on that basis. Depending upon the type of project, details like a suitable form
of enterprise, location, investment involved are decided. To set up an enterprise, an
entrepreneur has to decide upon the constitution of the enterprise at the initial stage of
the project. There are various forms of an enterprise which can be chosen by the
entrepreneur based on the selection of the intended project. Selection of a most
conducive form of enterprise is important for the successful execution of the project.
Forms of an Enterprise
1. Sole Proprietorship
2. Partnership Firm
3. Limited Liability Partnership Firm

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 4. Joint Stock Company
a. Private Company b. Public Company
1. Sole Proprietorship
A Sole proprietorship can be explained as a kind of business or an organization
that is owned, controlled and operated by a single individual who is the sole beneficiary
of all profits or loss, and responsible for all risks. It is a popular kind of business,
especially suitable for small business at least for its initial years of operation. This type
of businesses is usually a specialized service such as hair salons, beauty parlours, or
small retail shops.

Features of Sole Proprietorship

1. Single Ownership.

A sole trading concern is owned by one individual. It is run entirely at his risk of
loss. The sole trader provides both capital and management to the business.

2. Personal Organization or Common Identity.

A sole tradership concern has no separate legal entity independent of the owner.
The owner and the business concern are one and the same. The owner owns everything
the business owns and he owes everything the business owns.

3. Capital.

In sole tradership, the capital is employed by the owner himself from him
personal resources. He may also borrow money form his friends and relatives if he
cannot depend solely on his personal resources.

4. Unlimited Liability.

The liability of the proprietor for the debts of the business is unlimited. The
creditors have the right to recover their dues even from the personal property of the
proprietor in case the business assets are not sufficient to pay their debts.

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Advantages of Sole Proprietorship

1. Quick decision making– A sole proprietor has the freedom to make any decision.
Therefore, the decision would be prompt as they don’t have to take the
permission of others.
2. Confidentiality of information- Being only the owner of the business, it allows
him/her to keep all the business information to be private and confidential.
3. Direct incentive- A sole proprietor directly has the right to have all the profit or
benefits of a company.
4. Sense of accomplishment- He/she can have the personal satisfaction associated
with working without any guidance or alone.
5. Ease of formation and closure- A single proprietor can enter the business with
minimum legal formalities.

Advantages of Sole Proprietorship

One of the biggest limitations of a sole proprietorship is the unlimited personal

liability of the owner. If the business fails it can wipe out the personal wealth of the
owner as well as affect his future business prospects too

Another problem is that a sole proprietor has access to limited capital. The
money he can borrow from his own personal savings may not be enough to expand the
business. Moreover, banks and financial institutions are also wary of lending to
proprietorships.

The life cycle of a sole proprietorship is undecided and attached to its owner. An
incapacitated owner may have a negative effect on the business, and it may even lead
to the closure of the business. A sole proprietorship cannot carry on without its
proprietor.

A sole proprietor also has limited managerial ability. He cannot be an expert in

all the fields of the business. Furthermore, limited resources may mean that he cannot
hire competent people to help him out. As a result, the business may suffer from
mismanagement and poor decisions.

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PARTNERSHIP

A partnership is a kind of business where a formal agreement between two or

more people is made who agree to be the co-owners, distribute responsibilities for
running an organization and share the income or losses that the business generates.

In India, all the aspects and functions of the partnership are administered under
‘The Indian Partnership Act 1932’. This specific law explains that partnership is an
association between two or more individuals or parties who have accepted to share the
profits generated from the business under the supervision of all the members or behalf
of other members.

Features of Partnership

1. Agreement between Partners:

It is an association of two or more individuals, and a partnership arises from an

agreement or a contract. The agreement (accord) becomes the basis of the association
between the partners. Such an agreement is in the written form. An oral agreement is
evenhandedly legitimate. In order to avoid controversies, it is always good, if the
partners have a copy of the written agreement.
2. Two or More Persons:

In order to manifest a partnership, there should be at least two (2) persons

possessing a common goal. To put it in other words, the minimal number of partners in
an enterprise can be two (2). However, there is a constraint on their maximum number
of people.

3. Sharing of Profit:

Another significant component of the partnership is, the accord between partners
has to share gains and losses of a trading concern. However, the definition held in the
Partnership Act elucidates – partnership as an association between people who have
consented to share the gains of a business, the sharing of loss is implicit.

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4.Business Motive

It is important for a firm to carry some kind of business and should have a
profit gaining motive.
5. Mutual Business

The partners are the owners as well as the agent of their firm. Any act performed
by one partner can affect other partners and the firm. It can be concluded that this point
acts as a test of partnership for all the partners.

Advantages of Partnership

1. Easy Formation

An agreement can be made oral or printed as an agreement to enter as a partner

and establish a firm.

2. Large Resources

Unlike sole proprietor where every contribution is made by one person, in

partnership, partners of the firm can contribute more capital and other resources as
required.

3. Flexibility

The partners can initiate any changes if they think it is required to meet the
desired result or change circumstances.

4. Sharing Risk

All loss incurred by the firm is equally distributed amongst each partner.

5. Combination of different skills

The partnership firm has the advantage of knowledge, skill, experience and
talents of different partners.

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Disadvantages of Partnership

1. Unlimited Liability

A partnership firm is not a separate legal entity from its partners. This means that
all partners are personally liable for losses of the firm. Even if one partner causes the
loss, all the other partners become personally liable.

2. Restriction on the maximum number of partners

According to Rule 10 of the Companies (Miscellaneous) Rules, 2014, a

partnership cannot have more than 50 partners.

3. Lack of leadership

Since all partners are equally responsible for the business of the firm, there is no
single leader. Hence, unless the partners don’t choose a leader among themselves, there
can be differences in opinion due to a lack of leadership.

4. Lack of perpetual existence

If the business is a separate legal entity, then it survives even if the directors retire
or die. However, a partnership firm is not a separate legal entity from its partners.
Therefore, if one out of two partners dies or retires or faces any illness that renders him
incapable to perform his duties, then the firm usually dissolves.

5. Lack of public faith

One of the biggest partnership firm advantages is the fact that you can start it in
no time since it is not mandatory to register the firm. However, this advantage has a flip
side too. The general public lacks faith in an unregistered business.

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LIABILITY OF THE PARTNERSHIP

A traditional form of partnership firm suffers the problem of unlimited liability.

Liability of the partnership firms extends right up to their personal assets. This make
regular partnership firms undesirable for most of the entrepreneurs. To settle up these
issues a new form of organization has been passed in January 2009 by the government
of India, the Limited Liability Partnership to be governed under the Limited Liability
Partnership Act, 2008. Limited Liability Partnership or LLP is a hybrid form of
organization which contains the features of both, the traditional partnership firm and
company. It is an alternative corporate business form which offers benefits of limited
liability to the partners at lower compliances costs.

Advantages of the Limited Liability Partnership

1. No requirement of minimum contribution

There is no minimum capital requirement in LLP. An LLP can be formed with

the least possible capital. Moreover, the contribution of a partner can consist of tangible,
movable or immovable or intangible property or other benefits to the LLP.

2. No limit on owners of the business

An LLP requires a minimum of 2 partners while there is no limit on the maximum

number of partners. This is in contrast to a private limited company wherein there is a
restriction of not having more than 200 members.

3. Lower registration cost

The cost of registering LLP is low as compared to the cost of incorporating a

private limited or a public limited company. However, the difference in the cost of
registering an LLP vs Private Limited Company has come down in recent days.

4. No requirement of compulsory Audit

All companies, whether private or public, irrespective of their share capital, are
required to get their accounts audited. But in case of LLP, there is no such mandatory

22
requirement. This is perceived to be a significant compliance benefit. A Limited
Liability Partnership is required to get the tax audit done only in the case that:-

The contributions of the LLP exceeds Rs. 25 Lakhs, or

The annual turnover of the LLP exceeds Rs. 40 Lakhs

5. Taxation Aspect on LLP

For income tax purpose, LLP is treated on a par with partnership firms. Thus,
LLP is liable for payment of income tax and share of its partners in LLP is not liable to
tax. Thus no dividend distribution tax is payable. Provision of ‘deemed dividend’ under
income tax law, is not applicable to LLP. Section 40(b): Interest to partners, any
payment of salary, bonus, commission or remuneration allowed as deduction.

6. Dividend Distribution Tax (DDT) not applicable

In the case of a company, if the owners to withdraw profits from the company,
additional tax liability in the form of DDT @ 15% (plus surcharge & education cess) is
payable by the company. However, no such tax is payable in the case of LLP and profits
of an LLP can be easily withdrawn by the partners.

Disadvantages of Limited Liability of Partnership

1. Penalty for Non-Compliance

Even if an LLP does not have any activity, it is required to file an income tax
return and MCA annual return each year. In case an LLP fails to file Form 8 or Form
11 (LLP Annual Filing), a penalty of Rs.100 per day, per form is applicable. There is no
cap on the penalty and it could run into lakhs if an LLP has not filed its annual return
for a few years. In case of a proprietorship or partnership firm, there is no requirement
for filing an annual return. Hence, only penalty under the Income Tax Act would be
applicable.

2. Inability to Have Equity Investment

An LLP does not have the concept of equity or shareholding like a company.
Hence, angel investors, HNIs, venture capital and private equity funds cannot invest in

23
an LLP as shareholders. Thus, most LLPs would have to rely on funding from promoters
and debt funding.

3. Higher Income Tax Rate

The income tax rate for a company with a turnover of up to Rs.250 crores is 25%.
(Further reduced in 2019 for new companies involved in manufacturing). However,
LLPs are taxed at a 30% rate irrespective of the turnover.

4. Joint Stock Company

An association of different individuals formed to carry out business activities is

known as a joint stock company. This form of organization has an independent legal
status from its members. Basically, a joint stock company is an artificial individual with
a separate legal entity, common seal and perpetual succession. The Joint Stock
Company form of organization is governed by the Companies Act, 2013. The
shareholders of the company are its owners; however, the Board of Directors is elected
by the shareholders and is the chief managing body of the company. Usually, the
shareholders or the owners of the company have indirect control over its operations.\

1. Limited Liability

The liability of the members of a company is limited to the extent of the share
contributed by them in the company. If a company faces a loss, the shareholders of the
company do not have to sell off their personal property for repayment. This advantage
of a joint stock company attracts people to invest money in the Company Form of
Business.

2. Transfer of Interest:

As the shares of a company are transferrable and can be easily bought and sold
in the market, it brings liquidity of investment in the company. The shareholders can
anytime convert their share investment into cash and can use that amount to buy the
shares of another company.

3. Perpetual Existence:

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 As the company form of business has a separate legal existence from its
members, it enjoys perpetual succession. It means that a company can be formed by
law and can end by law through the process of winding up only, i.e., the death,
insolvency, and incapacity of the members do not have any effect on the company’s
existence.

4. Growth and Expansion

A company has more scope for expansion and growth because it has large financial
resources and high profit rates. It means that if a company has retained profits, it can
easily use that amount for its growth and expansion.

5. Efficient Management

Every business requires specialized people and experts for better performance
and results. As a company has huge funds at its disposal, it can easily hire experts to
perform various business activities, and can efficiently improve its working and
performance.

Disadvantages of Joint Stock Company

1. Complexity in Formation

The process of the formation of a company is quite complicated and lengthy. It

requires the completion of various formalities, and various different documents have to
be prepared and submitted. It also requires obtaining different kinds of permissions. For
all these activities, a company has to hire experts who charge high fees for the same.
Besides, registration fees have to be paid to the registrar of companies.

2. Lack of Secrecy

According to the Companies Act, 1956 every company has to share various
information about it with the registrar of companies, which is made available to the
general public also. This compulsion of sharing information makes it difficult for the
company to maintain secrecy about its operations.

3. Impersonal Work Environment

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 As a company is managed by hired professionals and experts, instead of its
owners, and the professionals get a salary in return, there is no direct relationship
between the efforts and reward of the business activities. In other words, if there is an
increase in the profits of a company, it will not increase the salary of the experts, which
results in a lack of motivation and incentive for efficient performance.

4. Numerous Regulations:

A company has to fulfil a number of formalities at different stages of the

business, and if it fails to meet any of these formalities, it has to bear the penalty. It also
has to file annual reports and return every year with the registrar of the companies,
which involves a huge amount of money and time of the company. Besides, it also
hinders the secrecy of the company as there is regular interference in the operations of
the business.

5. Delay in Decisions

The important decisions in a company are taken after consulting with different
people or discussing in the board meeting, which is a lengthy process. Also, once a
decision is made, communicating the decision to every person at different levels of the
company is also a lengthy process. Therefore, making decisions and implementing them
can delay things in a company.

One Man Company

The Companies Act, 2013 introduced the new concept of One Person
Company (OPC). As the name suggests, an OPC is a company established by a single
person. A single individual establishes and manages the company. An OPC has all the
features of a company, such as perpetual succession, limited liability and a separate
legal entity. Before the enforcement of the Companies Act, 2013, a single person could
not establish a company. If an individual wanted to establish his business, he/she could
opt only for a sole proprietorship as there had to be a minimum of two directors and two
members to establish a company.

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In a Private Company, a minimum of 2 Directors and 2 Members are required whereas
in a Public Company, a minimum of 3 Directors and a minimum of 7 Members. A single
person could not incorporate a Company previously. As per Section 2(62) of the
Company’s Act 2013, a company can be formed with just 1 Director and 1 member. The
director and member can be the same person. It is a form of a company where the
compliance requirements are lesser than that of a private company. Thus, one person
company means one individual who may be a resident or NRI can incorporate his/her
business that has the features of a company and the benefits of a sole proprietorship.

Advantages of One-Man Partnership

1. Legal status

The OPC receives a separate legal entity status from the member. The separate
legal entity of the OPC gives protection to the single individual who has incorporated
it. The liability of the member is limited to his/her shares, and he/she is not personally
liable for the loss of the company. Thus, the creditors can sue the OPC and not the
member or director.

2. Easy to obtain funds

Since OPC is a private company, it is easy to go for fundraising through venture

capitals, angel investors, incubators etc. The Banks and the Financial Institutions prefer
to grant loans to a company rather than a proprietorship firm. Thus, it becomes easy to
obtain funds.

3. Less compliances

The Companies Act, 2013 provides certain exemptions to the OPC with relation
to compliances. The OPC need not prepare the cash flow statement. The company
secretary need not sign the books of accounts and annual returns and be signed only by
the director.

4. Easy incorporation

It is easy to incorporate OPC as only one member and one nominee is required
for its incorporation. The member can be the director also. The minimum authorized

27
capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital
requirement. Thus, it is easy to incorporate as compared to the other forms of company.

Disadvantages of One-Man Partnership

1. Suitable for only small business

OPC is suitable for small business structure. The maximum number of members
the OPC can have is one at all times. More members or shareholders cannot be added
to OPC to raise further capital. Thus, with the expansion and growth of the business,
more members cannot be added.

2. Restriction of business activities

The OPC cannot carry out Non-Banking Financial Investment activities,

including the investments in securities of anybody corporates. It cannot be converted to
a company with charitable objects mentioned under Section 8 of the Companies Act,
2013.

3. Ownership and management

Since the sole member can also be the director of the company, there will not be
a clear distinction between ownership and management. The sole member can take and
approve all decisions. The line between ownership and control is blurred, which might
result in unethical business practices.

Business Model Canvas

Business Model Canvas is a strategic management tool that helps businesses visualize
and analyze their business models. It consists of 9 fundamental building blocks that describe
the core aspects of a company's value proposition, infrastructure, customers, and finances
(more on that later, we promise). By using it, organizations can gain a deeper understanding of
their overall business model, identify areas for improvement, and develop new strategies for
growth. One of the key benefits of the BMC format is that it's very visual.
Background of the Business Model Canvas
The nine BMC building blocks were initially presented in 2005 by Alexander
Osterwalder. They were based on his Ph.D. work on business model ontology, supervised by
Yves Pigneur. Since its release, the authors have developed other related tools, such as the

28
Culture Map and the Value Proposition Canvas, which have helped the BMC tool to evolve and
added value to it. The Business Canvas Model is more sales orientated and usually focuses on
selling products or services, and examples are; Strategy Planning; Business Planning; and
Business Planning

Advantages of Business Model Canvas

➢ A clear and comprehensive business model overview in a single visual format. This
makes it easier to understand, articulate, and communicate;

➢ Strong collaboration and breaking down silos. Using the BMC approach incentives
people to work as one team, as it involves all stakeholders, and enables them to actively
participate in developing, improving, and refining the business model;

➢ A structured and systematic approach to analyzing and designing business models,

which helps identify areas for improvement and innovation;

➢ A flexible approach that enables innovation instead of limiting it. The framework can
be adapted to different types of businesses, industries, and customer groups; and

➢ Colleagues constantly progressing with feedback (to borrow from an ITIL principle).
The BMC approach allows for a fast and efficient testing of different business model
configurations, speeding up the innovation process and reducing the time to market.

29
 Disadvantages of Business Model Canvas

➢ Using the BMC approach effectively can be challenging without prior knowledge of
business modeling concepts and terminology. You will need to put the work in and do
some pre-reading to get the most out of it;

➢ Because it's so visual, it may oversimplify the complexity of a business model, making
it more challenging to articulate some of the aspects of the organization's operations
and performance. This makes it unsuitable for highly-specialized or complex
businesses;

➢ Because it's a framework rather than a prescriptive standard that must be strictly
adhered to, it doesn't provide detailed guidance on implementing or executing the
business model, which can lead to difficulties in translating the canvas into action; and

➢ It can rely on assumptions and hypotheses, which may not always be accurate or
relevant for real-world situations.

Building Blocks of the Business Model

The Nine building blocks of the Business Model Canvas.

Key Partnership Key Activities Value Proposition Customer Customer

The relationships The key activities The unique value Relationships Segments
and collaborations that the business the business The business The
that the business must perform to provides to its relationships with different
has with its deliver its value differentiates itself its customers and groups of
suppliers, vendors proposition and from competitors how it interacts customers
and other external operate with them the business
partners. successfully. Channels targets with
The different its products
Key Resources channels that the or services
The key resources business uses to
the business reach and interact
requires to operate. with customers
including physical
and digital channels

Cost Structure Revenue Streams

The various costs that the business to operate The different sources of revenue
that the business generates from its
customers

30
Business Model Canvas in 14 Steps
1. Define the purpose
The first step is to define the purpose of the Business Model Canvas. Where are
you now, and where do you want to be? What do you hope to achieve? Who is the target
audience? Have you double-checked to ensure what you want to achieve is in line with
the strategic objectives of the rest of the business.

2 Identify the nine building blocks

Identify the nine building blocks of the BMC, review each in relation to your
business, and understand their purpose.

3. Define the Value Proposition

What will add value? Start by defining the unique value that your business offers
to customers. This will be the foundation of your canvas.

4. Identify your Customer Segments

Define the different groups of customers your business targets and their specific
needs and preferences so you can focus and direct your efforts accordingly.

5. Define Customer Relationships

Identify your business' relationships with its customers and how it interacts with
them. You can also use this step to identify your most important relationships so you
can focus more effort on maintaining and improving them.

6. Determine the Channels

Identify your business's channels to reach and interact with its customers,
including physical and digital channels. From a service desk perspective, this could be
offering a tier 0 channel with self-service or AI-enabled support capabilities before
providing tier 1 and level 2 channels which offer a more people-centric user experience.

7. Define Key Partnerships

Identify your business's relationships and collaborations with its suppliers,

vendors, and other external partners. Remember, it's not just relationships with
customers and stakeholders that matter, your suppliers are part of your team, so manage
those relationships appropriately.

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8. Identify Key Activities

Define the key activities that your business must perform to deliver its value
proposition and operate successfully.

9 Determine Key Resources

Identify the key resources that your business requires to operate, including
people, knowledge and wisdom, financial assets, and IT assets.

10 Determine Revenue Streams

Identify the different sources of revenue that your business generates from its
customers. If you have a finance team, work with them to identify current revenue
streams and plan for future ones.

7. Define Key Partnerships

Identify your business's relationships and collaborations with its suppliers,

vendors, and other external partners. Remember, it's not just relationships with
customers and stakeholders that matter, your suppliers are part of your team, so manage
those relationships appropriately.

8. Identify Key Activities

Define the key activities that your business must perform to deliver its value
proposition and operate successfully.

9 Determine Key Resources

Identify the key resources that your business requires to operate, including
people, knowledge and wisdom, financial assets, and IT assets.

10 Determine Revenue Streams

Identify the different sources of revenue that your business generates from its
customers. If you have a finance team, work with them to identify current revenue
streams and plan for future ones.

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PROJECT REPORT

Meaning of the Project Report

A Project Report is a document which provides details on the overall picture of

the proposed business. The project report gives an account of the project proposal to
ascertain the prospects of the proposed plan/activity.

Project Report is a written document relating to any investment. It contains data

on the basis of which the project has been appraised and found feasible. It consists of
information on economic, technical, financial, managerial and production aspects. It
enables the entrepreneur to know the inputs and helps him to obtain loans from banks
or financial Institutions.

The project report contains detailed information about Land and buildings
required, Manufacturing Capacity per annum, Manufacturing Process, Machinery &
equipment along with their prices and specifications, Requirements of raw materials,
Requirements of Power & Water, Manpower needs, Marketing Cost of the project,
production, financial analyses and economic viability of the project.

Contents of Project Report

1. General Information

A project report must provide information about the details of the industry to
which the project belongs to. It must give information about the past experience, present
status, problems and future prospects of the industry. It must give information about the
product to be manufactured and the reasons for selecting the product if the proposed
business is a manufacturing unit. It must spell out the demand for the product in the
local, national and the global market. It should clearly identify the alternatives of
business and should clarify the reasons for starting the business.

2. Executive Summary

A project report must state the objectives of the business and the methods
through which the business can attain success. The overall picture of the business with
regard to capital, operations, methods of functioning and execution of the business must
be stated in the project report. It must mention the assumptions and the risks generally
involved in the business.

33
 3. Organization Summary

The project report should indicate the organization structure and pattern
proposed for the unit. It must state whether the ownership is based on sole
proprietorship, partnership or joint stock company. It must provide information about
the bio data of the promoters including financial soundness. The name, address, age
qualification and experience of the proprietors or promoters of the proposed business
must be stated in the project report.

4. Project Description

A brief description of the project must be stated and must give details about the
following:

Location of the site,

Raw material requirements,
Target of production,
Area required for the work shed,
Power requirements,
Fuel requirements,
Water requirements,
Employment requirements of skilled and unskilled labour,
Technology selected for the project,
Production process,
Projected production volumes, unit prices,
Pollution treatment plants required.
If the business is service oriented, then it must state the type of services rendered
to customers. It should state the method of providing service to customers in detail.

5. Marketing Plan

The project report must clearly state the total expected demand for the product.
It must state the price at which the product can be sold in the market. It must also
mention the strategies to be employed to capture the market. If any, after sale service is
provided that must also be stated in the project. It must describe the mode of distribution
of the product from the production unit to the market. Project report must state the
following:

34
 ▪ Type of customers,
▪ Target markets,
▪ Nature of market,
▪ Market segmentation,
▪ Future prospects of the market,
▪ Sales objectives,
▪ Marketing Cost of the project,
▪ Market share of proposed venture,
▪ Demand for the product in the local, national and the global market,
6. Capital Structure and Operating Cost
The project report must describe the total capital requirements of the project. It
must state the source of finance, it must also indicate the extent of owner’s funds and
borrowed funds. Working capital requirements must be stated and the source of supply
should also be indicated in the project. Estimate of total project cost, must be broken
down into land, construction of buildings and civil works, plant and machinery,
miscellaneous fixed assets, preliminary and preoperative expenses and working capital.
Proposed financial structure of venture must indicate the expected sources and terms of
equity and debt financing. This section must also spell out the operating cost.

KHADI AND VILLAGE INDUSTRIES COMMISSION

Khadi and Village Industries Commission (KVIC) is a statutory body of the Indian
constitution. it comes under the ministry of micro, small and medium enterprises. it was
established by khadi and village industries act, 1956. it has been amended twice, in 1965 and
2006. it is one among the important constitutional, statutory and quasi-judicial bodies of
India.

Objectives of KVIC

The broad objectives of the Khadi Village and Industries Commission encompassing
self-reliance and sustainability are:

1. Social Objectives-To boost employment in the country;

2. Economic Objectives-To promote the promotion and sale of Khadi articles; and

35
 3. Wider Objectives- To cater to the self-reliance doctrine of the country by empowering
underprivileged and rural sections of the society.

Functions of KVIC

1. It plans, promotes, organizes, and implements programmes for the development of

Khadi and Village Industries (KVI);

2. It coordinates with multiple agencies that are engaged in rural development for several
initiatives w.r.t khadi and village industries in rural areas;

3. It maintains a reserve of raw materials that can be further promoted in the supply-chain.

4. It aids in creating common service facilities that help in processing of raw materials.

5. It aids the marketing of KVI products through artisans and other avenues;

6. It creates linkages with multiple marketing agencies for the promotion and sale of KVI
products;

7. It encourages and promotes research and development in the KVI sector;

8. It brings solutions to the problems associated with the KVI products by promoting
research study and enhancing competitive capacity;

9. It also helps in providing financial assistance to the individuals and institutions related
to the khadi and village industries;

10. It enforces guidelines to comply with the product standards to eliminate the production
of ingenuine products; and

11. It is empowered to bring projects, programmes, schemes in relation to khadi and village
industries’ development.

NATIONAL SMALL INDUSTRIES CORPORATION LIMITED (NSIC)

National Small Industries Corporation Limited (NSIC) is a Mini Ratna government

agency established by the Ministry of Micro, Small and Medium Enterprises, Government of
India in 1955. It falls under Ministry of Micro, Small & Medium Enterprises of India. NSIC is
the nodal office for several schemes of Ministry of MSME such as Performance & Credit
Rating, Single Point Registration, MSME Databank, National SC ST Hub, etc.

36
Aim of the NSIC

The main aim of NSIC is to support and help the growth of industries in micro and
small-scale businesses throughout the country while also serving as a powerful force in the
industry. While initially, the corporation was the government agency of India, it was later
changed to a completely owned enterprise of the government.

Mission and Vision of NSIC

• Vision: to establish itself as a stalwart organization that furthers the development of

industries within the MSME category.

• Mission: to promote MSMEs and provide assistance by enabling a range of support

services, including but not limited to marketing, finance, technology and the like.

Organization and Structure of NSIC

The Board of Directors, which consists of a full-time chairman/managing director, two

functional directors, one SIDBI nominee director, two government nominee directors, and six
unofficial part-time directors, sets the policies for the National Small Industries Corporation.
The committed group of experts manages the firm on numerous levels. It employs 123
offices around India and one in South Africa to carry out its operations. The National Small
Industries Corporation is supported by a team of over 500 professionals nationwide through its
nine zonal offices, 33 branch offices, 14 sub-offices, 10 Business Development Extension
Offices, five technical services centres, three extension centres, and two software technology
parks.

Functions of NSIC

1. Facilitating Marketing Support: NSIC provides marketing help to small ventures by

promoting their products and services, arranging trade fairs and exhibitions, and
facilitating participation in domestic and international trade occasions.
2. Credit Support: NSIC offers different credit-related plans to small enterprises,
including giving monetary help through its assets or working with advances from banks
and economic foundations. It likewise assists in the method involved with obtaining
government endowments and motivating forces.

37
 3. Technology Support: NSIC helps small enterprises adopt modern technologies and
update their assembly processes. It offers specialized help, project preparation, and
consultancy services to improve competitiveness and efficiency.
4. Capacity Building: NSIC conducts ability development programs, business venture
improvement programs, and other training initiatives to upgrade the capacities of
small enterprises and their employees.
5. Single Point Registration: NSIC operates the Single Point Registration Plan (SPRS),
which empowers independent ventures to register themselves as soldiers for
government procurement. This registration gives them opportunities to participate in
government tenders and agreements.
6. Export Facilitation: NSIC helps small enterprises investigate and extend their
commodity potential. It also provides direction on sending procedures, documentation,
and market intelligence to assist small-scale enterprises with entering worldwide
business markets.

MICRO, SMALL, AND MEDIUM ENTERPRISES [MSMES]

Introduction
MSMEs are Micro, Small, and Medium Enterprises that are usually involved in the
manufacture and production of goods and commodities. These business enterprises are the
backbone of a country’s development and provide holistic development to the rural and urban
population of the country. The MSME sector in India makes a contribution of around 30% to
the nation’s GDP. Moreover, it contributes about 40% to the total exports of India and provides
more than 110 million job opportunities in the country.

MSME full form is Micro, Small, and Medium Enterprises. The Government of India
introduced the MSME under the Micro, Small, and Medium Enterprises Development
(MSMED) Act of 2006. MSMEs are managed under the Ministry of MSMEs.
MSMEs are businesses with specific turnovers. The objective of MSMEs is to primarily
engage in manufacturing, processing, production, and preservation of goods and commodities.
These business enterprises play an important role in the socioeconomic development of the
country.

MSME Classification
Businesses are classified as micro, small or medium enterprises on the basis of their
turnover and the sector they operate in (manufacturing/services).

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 Category Micro Small Medium

Net Investment in Less than 1 crore Less than 10 crore Less than 50 crore
Plant, Machinery and
Equipment

Net Turnover Less than 5 crore Less than 50 crore Less than 250 crore

Type of MSMEs

According to the Micro, Small and Medium Enterprises Development (MSMED) Act
2006, MSMEs are of 2 types:

1. Manufacturing Enterprises: Business enterprises that are involved in the

manufacturing of goods, as stated under Schedule I of the IDRA 1951, are categorised
as MSMEs. Additionally, all business enterprises that contribute value to the finished
products by making use of plants and machinery also come under MSMEs.
2. Service Enterprises: Business enterprises that provide services and come under the
category of ‘enterprises’ as stated in the MSMED Act are service enterprises and come
under MSMEs. Note that individual service providers do not qualify as service
enterprises.

Features of MSMEs
➢ MSMEs contribute significantly towards improving the lives of their employees and
artisans. They help these workers have a better quality of life by providing them with
an income source, medical benefits, loan facilities, and more.
➢ MSMEs constantly strive to bring innovation, modernisation, and expansion in
technology and infrastructure in the sector they operate in.
➢ These enterprises are equipped to provide banking institutions with credit limits and
financing assistance.
➢ MSMEs set up specialised manpower training centres to upgrade the skills of
individuals and create a motivating and feasible environment for future entrepreneurs.
➢ MSMEs are technologically driven and have quality certifications and advanced testing
facilities to ensure top-notch quality of goods and commodities.

39
 ➢ MSMEs follow the latest global trends and bring innovation in product manufacturing
and packaging to the domestic markets.
Role of MSMEs

➢ Export: MSMEs’ contribution to the exports from India was recorded at 42.67% by
August 2022. Such high volumes of exports facilitate international trade and
contribute to industrial growth within the country.
➢ Employment: As stated before, MSMEs create employment in rural and urban areas of
the country. These business enterprises are the second largest employment sector in
India after agriculture. By setting up units in rural and underdeveloped areas, MSMEs
contribute to the better living standards of people from lower socioeconomic and rural
areas as well.
➢ Innovation: MSMEs bring innovation to various processes in the manufacturing of
goods and commodities. They provide the necessary skills, tools, and technology for
automation and advancement in their sectors. It contributes to the overall
technological upgradation of the country and promotes research and development.
➢ Entrepreneurship: MSMEs promote inclusiveness in the country by facilitating the
entry of aspiring entrepreneurs in various sectors. They promote healthy
competitiveness among entrepreneurs, which fuels industrial growth.
Entrepreneurship Development Institute of India (EDII)

The Entrepreneurship Development Institute of India (EDII), Ahmedabad was set up in

1983 as an autonomous and not-for-profit Institute with support of apex financial institutions -
the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd, State Bank of India (SBI) and Government of
Gujarat. EDII began by conceptualizing Entrepreneurship Development Programmes (EDPs),
and subsequently launched a fine tuned and a tested training model for New Enterprise
Creation, popularly known today as EDII-EDP model. Today, EDII is a National Resource
Institute in the field of education, training, research and institution building. programs.

Key Facts of EDII

• EDII works with the Central Government and various State Governments in a
collaborative frame. The Institute plays a major role in creating and sharpening the
entrepreneurial culture in the country..

40
 • The institute launched the first-of-its-kind structured educational post graduate
programme in entrepreneurship to train students in New Enterprise Creation, Family
Business Management and Social Entrepreneurship.

• EDII has introduced several development models under the Departments of

Entrepreneurship Education; Policy Advocacy, Knowledge and Research Projects;
Business Development Services & National Outreach and Developing Economy
Engagement.

• EDII has hosted the Technology Business Incubator, CrAdLE which is catalyzed and
supported by DST, Govt. of India..

• The Institute has earned regional, national and international recognition for boosting
entrepreneurship and startups. across segments and sectors through innovative models
and by intermediating cravenly among stakeholders such as; new age potential
entrepreneurs, existing entrepreneurs, incubation centres, and venture capitalists.

Vision and Mission of EDII

To empower and nurture technology start-ups in achieving innovative, scalable and

sustainable growth with the aim of positive, creative and constructive value-addition to the
community.

Mission

➢ To nurture an incubates passion and business idea, and impart a conducive support
system to ensure sustainability and scalability of the start-ups.
➢ Augment supply of new entrepreneurs.
➢ Enterprise creation and employment generation.
➢ Increase competitiveness of Indian SMEs.
➢ Act as repository of knowledge in the area of women entrepreneurship.
➢ Create a group of trained social entrepreneurs.

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Objectives of EDII

✓ Nurturing them at an early-stage and helping them overcome teething troubles;

✓ Mentoring and providing all-equipped business environment for operation;
✓ Extending value-added services viz. legal, financial, technical, IPR and mentoring
to incubates;
✓ Strengthening business skills/knowledge of incubates;
✓ Providing a platform for speedy commercialization of technologies developed in
academic and R&D institutions of the country; and
✓ Facilitating business networking for better and faster enterprise growth.

Functions of EDII

1. Creating a multiplier effect on opportunities for self-employment;

2. Augmenting the supply of competent entrepreneurs through training;
3. Augmenting the supply of entrepreneur trainer motivators;
4. Participating in institution buildings efforts;
5. Inculcating the spirit of ‘Entrepreneurship’ in youth;
6. Promoting micro enterprises at rural level;
7. Developing new knowledge and insights in entrepreneurial theory and practice through
research;
8. Facilitating corporate excellence through creating intrapreneurs;
9. Improving managerial capabilities of small-scale industries;
10. Sensitizing the support system to facilitate entrepreneurs establish and manage their
enterprises; and
11. Collaborating with organization to accomplish the above objectives.

PROJECT FORMULATION

The entrepreneur faces number of problems while establishing new project. These
problems may be in relation to the formalities and procedures to be completed, technical
requirements or even financial constraints also. There is a need to set the boundaries or the
limit of the work intended to be performed under the proposed project. In fact, the project is
required to be given the precise meaning. It definitely prevents the confusion, conflict or

42
duplication of various aspects related with the project. The very first stage in life cycle of
project is project formulation.

Concept of Project Formulation

Project formulation is a step-by-step investigation and development of the project

where each step is for further development of project idea. It is a control mechanism which
provides for restricting expenditure on project development. So, it enables to control the
expenditure and if at any step there are signs of anything going wrong or if weakness is
observed in the project at any stage of investigation, the project may even be called off. Project
formulation is the systematic development of a project idea for the eventual objective of
arriving at an investment decision. It has the built-in mechanism of ringing the danger bell at
the earliest possible stage of resource utilization
Elements of Project Formulation
In order to take the most effective project decision, project formulation is required. This
exercise of project formulation usually contains the following elements:
1. Feasibility analysis
2. Techno-economic analysis
3. Project Design and Network analysis
4. Input analysis Financial analysis
5. Social Cost-benefit analysis
6. Project appraisal
1 Feasibility Analysis
Feasibility analysis is a process undertaken to determine whether the project idea is
worth proceeding with or not. It evaluates the future of the project idea within the limitations
imposed by the environment upon it and also the constraints of the implementing body.
Generally, the outcome of the study can give a positive result under which the decision to
proceed with the project is taken otherwise the project can be abandoned. Sometimes, the data
is not sufficient to arrive at any decision and in that case further information is collected till a
decision can be reached. The feasibility analysis consists of three stages. These are pre-
feasibility study, feasibility study and Project report.
2 Techno-Economic Analysis
It is concerned with finding out the demand potential of the project and the right
technology required attaining the objective of the project. It is important to analyse whether
the economy will absorb the output. The technology would mean the project design, the

43
methodology and the process required. Thus it is to be understood in a broader sense. This
analysis consists of two important segments. The first segment is related with ascertainment of
maximum project output whereas the purpose of second segment is the selection of optimal
strategy to achieve the output.
3. Project Design and Network Analysis
It is related with the flow of various individual activities and their inter-relationship in
order to complete the project. It identifies activities which can be started and also the activities
which can be taken up simultaneously. It is generally depicted in the form of a network diagram.
4. Input Analysis
After all the analysis the next step is to find out all the resources that are required to
complete the project. These resources form the inputs of the project. It also identifies all the
different phases where the resources are required.
5. Social-Cost Benefit Analysis

The concept of social cost–benefit analysis (SCBA) has been introduced by the French
economist Jules Dupuit. Social Cost benefit Analysis is a systematic evaluation technique for
long-term decision making in capital projects appraisal. It is an analytical tool in decision
making which enables a systematic comparison to be made between the social costs and related
social benefits with due emphasis on technical and other feasibility studies but focusing more
on social impact.

6. Project appraisal
The term project appraisal refers to the process of assessing whether to proceed with
the project or nor in a systematic manner. It is related with calculating the feasibility and
viability of the project. While appraising a project economic, technical, marketing and financial
feasibility is generally checked. A feasibility report is then prepared based on which the
decision is taken whether to proceed with the project or not.
The types of appraisals can be
➢ Technical
➢ Commercial
➢ Financial
➢ Economic
➢ Management

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Prime Minister Employment Generation Programme

The scheme was launched in 2008. It is a central sector scheme. Ministry of Micro,
Small and Medium Enterprises (MSME) administers the programme. The programme is being
implemented by the Khadi and Village Industries Commission (KVIC) at the national level. It
is the single nodal agency for the implementation of the programme. The Scheme is being
implemented through banks, District Industries Centres (DICs), State KVIC Directorates and
State Khadi and Village Industries Boards (KVIBs) at the state level. Individuals above the age
of 18 years, Self Help Groups (SHGs), Cooperative Societies involved in the production, and
institutions that are registered under the Societies Registration Act of 1860 are eligible for
benefits under this programme. There is no income ceiling while setting up the project.
Assistance is provided under the scheme only to the new units, units that have availed
government subsidies under either the state or the central government schemes; existing units
are not eligible for subsidy under PMEGP. In order to achieve inclusive growth across the
country, a minimum of 75 projects will be awarded to each district. Physically disabled, OBC,
SC/STs, women, northeastern region (NER) applicants in rural areas are eligible for a higher
rate of subsidy.

Objectives of PMEGP

1. Generation of sustainable and continuous employment opportunities in both rural as

well as urban areas in the country.

2. Provision of sustainable and continuous employment to a wide segment of prospective

and traditional artisans, unemployed youth in rural and urban areas by establishing
micro-enterprises for employment generation.

3. Smooth flow of credit to the micro sector by facilitating the participation of financial
institutions.

The Cabinet Committee on Economic Affairs (CCEA) has given approval for the
continuation of PMEGP for 3 years beyond the 12th Plan from FY 2017-18 to 2019-20.

Features of PMEGP

1. Any industry including coir-based projects (excluding those mentioned in the negative
list) can take advantage of this scheme;

45
 2. The per capita investment under the scheme should not exceed Rs 1 lakh in plain areas
and Rs 1.5 lakh in hilly areas. Assistance under the PMEGP is only available to new
units that are to be established;
3. There is no income ceiling for setting up projects;
4. Existing units or units that are already availing any government subsidy (State or
Central) are ineligible; and
5. Any industry including coir based projects (excluding those mentioned in the negative
list) can take advantage of this scheme;
PMEGP Challenges

The Scheme is crippled by structural issues and a high rate of Non-Performing Assets
(NPAs). From 2015-2016 to 2019-2020, assistance of Rs. 10,169 crore was provided. Out of
this, Rs. 1,537 crore has turned out to be NPA. A deficiency in skills, lack of market study, low
demand and stiff competition are believed to be the key reasons for such a large number of
NPAs. While normally all central schemes are given definite annual targets, this scheme is not
driven by any such target. As both the states and the banks work without the aim of completing
the annual target of disbursement of loans, the programme may lose its drive. Know in detail
about various Government Schemes on the given link.

Way Forward

Besides providing financial support, the government needs to conduct an intensive

training programme to help potential entrepreneurs focus on the right market and right
products. The scheme can prove beneficial at the time when the economy needs to recover from
the effects of the Covid-19 pandemic. Timely disbursal of funds is crucial for execution of
projects and creating employment in the country

State Finance Corporation

The State Finance Corporations (SFCs) are a vital component of a country’s

institutional finance architecture. The SEC promotes small and medium-sized
enterprises in the states, whereas SFC assists in promoting balanced regional
development, increased investment, more employment generation, and broad industry
ownership. At present, there are 18 state finance corporations in India (out of which 17
are SFCs, according to the SFC Act 1951). Tamil Nadu Industrial Investment

46
Corporation Ltd. is a state finance corporation incorporated under the Company Act,
1949.

Organization and Management

The State Finance Corporations are run by a Board of ten directors, which are
appointed by the state government. In general, the managing director is chosen in
consultation with the RBI and named by three other directors by the state government.
Three directors are elected by all types of insurance companies, scheduled banks,
investment trusts, cooperative banks, and other financial organisations. As a result, the
state government and quasi-government bodies select the vast majority of directors.

Functions of SFC

• The SFCs finance fixed assets, such as land, construction, equipment, and
machinery.

• The SFCs assist industrial companies that have paid-up capital and reserves of
less than Rs. 3 crore (or such a higher limit as may be determined by the central
government).

• The SFCs guarantee new industrial units’ stock, shares, debentures, and other
instruments.

• The SFCs offer guarantee loans to scheduled banks, industrial enterprises, and
state cooperative banks that have raised funds on the capital market. The loans
are payable in 20 years and guaranteed by the SFCs.

• The SFCs also refinance term loans of up to Rs. 20 lakh from other financial
institutions.

• The SFCs help small and medium enterprises by providing loans for the purchase
of plant and machinery, equipment, tools, etc.

• The SFCs also offer venture capital funding to small and medium enterprises.

• The SFCs provide term loans to sick units for rehabilitation purposes.

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 • The SFCs also undertake developmental activities such as establishing industrial
estates, providing infrastructure facilities, etc.

Problems of SFC

• The SFCs have been plagued by several problems in recent years, which have
led to their declining role in the Indian economy. Some major problems faced by
SFCs are:

• The SFCs have a high proportion of non-performing assets (NPAs), which has
eroded their capital.

• The SFCs are highly dependent on the state government for capital infusion,
which is often not forthcoming promptly.

• The SFCs have been hit hard by the recent economic downturn, as many of their
borrowers are small businesses and farmers who have been adversely affected
by the slowdown.

• The SFCs are also facing competition from newer players such as NBFCs and
microfinance institutions, which are better equipped to serve the needs of small
businesses and farmers.

• As a result of this, most SFCs in India are connected to the World Bank and WTO
rules. These organizations’ choices are thus influenced by the World Bank and
WTO policies as a result of their agreements. The World Bank has a lot of power
over India since it is the largest development financier in the world. It can easily
push for its ideas to be implemented. It may also have a detrimental impact on
India’s small-scale industry.

Conclusion

The role of State Financial Corporations has been very important in the
development of small businesses and industries in India. However, these organisations
have been facing several problems in recent years, which have led to their declining role
in the Indian economy.

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 DISTRICT INDUSTRIES CENTRES

District Industries Centres program was launched on 1st May 1978. The main
thrust of the program is an effective promotion of cottage and small industries widely
dispersed in rural areas and small towns. Under the single roof of the DIC, all the
services and support required by small and village entrepreneurs are provided. Thus,
DICs were established to cater to the needs of MSMEs. They are envisaged as a single
window interacting agency with the entrepreneur at the district level. They are the ones
who put into action the plans and programs of the Central and State Governments.
Every district has a DIC located at its main office. The main responsibility
of DIC is to act as the chief coordinator or multifunctional agency in respect of various
Government departments, and other agencies. The prospective small entrepreneur
would get all assistance from DIC for setting up and running the industry in rural
areas. Up to 1991 about 422 DICS (covering 431 districts) have been set up throughout
the country. These DICS have assisted more than 1.5 lakh units generating employment
for more than 10.3 lakh persons. The four metropolitan cities of Mumbai, Kolkata,
Chennai, and New Delhi are outside the purview of the DIC.

Functions of SFC
1. DIC identifies and develops new entrepreneurs to set up industries by conducting
entrepreneurial motivation programs throughout the district.
2. It gives helpful tips to new business owners on how to choose the right projects
for them.
3. Once the projects are chosen, it provides temporary SSI registration, which is
necessary for getting help from banks.
4. It supports loan applications to SIDCO and Nationalised Banks so that
entrepreneurs can buy land and buildings.
5. Under the Rural Industries Project Loan Scheme, the DIC is sanctioning margin
money payable to other financial agencies for the purchase of plant and
machinery.
6. It takes the initiative to get clearances from other departments and takes follow.

49
 7. It makes necessary recommendations to the concerned raw material suppliers
and issues the required certificates for the import of raw materials and machinery
wherever necessary.
8. It arranges for financial assistance to Village Artisans and Handicrafts with the
lead bank of the respective area.
9. It assists SSI units and rural artisans to get subsidies such as power subsidies,
interest subsidies for engineers, subsidies under IRDP, etc.
10. It gives training to rural entrepreneurs and also assists other units in giving
training to small entrepreneurs.
Conclusion
The District Industries Centre plays a crucial role in promoting and supporting
industrial development at the district level. Its main functions encompass providing
financial assistance, technical guidance, and infrastructure support to entrepreneurs and
small-scale industries. By facilitating the establishment and growth of industries,
the District Industries Centre contributes to job creation, economic growth, and overall
development of the district. Additionally, it acts as a bridge between the government
and the industrial sector, ensuring the effective implementation of policies and schemes.
Through its various initiatives, the District Industries Centre aims to foster
entrepreneurship, enhance competitiveness, and promote sustainable industrial growth
in the district.

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WOMEN ENTREPRENEURSHIP AND EMPOWERMENT

Women entrepreneurship and empowerment are crucial components of

sustainable economic development and social progress. Empowering women to start
and grow their own businesses not only contributes to economic growth but also
promotes gender equality, reduces poverty, and fosters innovation.

Key Aspects of Women Entrepreneurship and Empowerment

Economic Growth and Development

Women entrepreneurs create jobs and stimulate economic activity. They bring
diverse perspectives and innovative solutions to the marketplace. Women-owned
businesses contribute significantly to GDP in many countries.

Gender Equality

Entrepreneurship provides women with financial independence and decision-

making power. It challenges traditional gender roles and promotes equal opportunities.
Empowering women economically can lead to broader social changes and improved
gender dynamics.

Reduction of Poverty

Women entrepreneurs often reinvest a significant portion of their income back

into their families and communities, improving education, health, and overall well-
being. Supporting women in business can help break the cycle of poverty, particularly
in developing regions.

Innovation and Diversity

Women bring unique insights and approaches to problem-solving. Gender-

diverse leadership teams are often more creative and better at addressing a wide range
of customer needs.

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Social Impact

Women entrepreneurs often focus on businesses that address social issues, such
as education, healthcare, and environmental sustainability. They tend to have a strong
sense of community responsibility and are likely to support social causes.

Challenges Faced by Women Entrepreneurs

Access to Finance

Women often face difficulties in obtaining financing due to a lack of collateral,

discriminatory lending practices, and limited access to credit networks.

Training and Education

Limited access to business training and education can hinder the growth of
women-owned businesses. Providing mentorship and skills development is essential
for empowering women entrepreneurs.

Cultural and Social Barriers

Societal norms and gender biases can discourage women from pursuing
entrepreneurship. Balancing business responsibilities with traditional roles in family
and society can be challenging.

Networking Opportunities

Women may have less access to business networks and mentors, which are
crucial for business growth and opportunities.

Legal and Regulatory Hurdles

In some regions, legal barriers and discriminatory regulations can impede

women’s ability to start and run businesses.

Strategies for Empowering Women Entrepreneurs

Access to Finance

Develop financial products tailored to the needs of women entrepreneurs.

Encourage banks and financial institutions to adopt gender-sensitive lending practices.
52
Education and Training

Provide targeted business training programs and mentorship opportunities.

Promote STEM education and technical skills development for women.

Policy and Legal Support

Advocate for policies that support women entrepreneurs, such as equal property
rights, access to credit, and business-friendly regulations. Implement measures to
combat gender discrimination in the business environment.

Networking and Mentorship

Create platforms for women entrepreneurs to network, share experiences, and

collaborate. Establish mentorship programs connecting aspiring women entrepreneurs
with successful business leaders.

Awareness and Advocacy

Raise awareness about the benefits of women entrepreneurship and the

challenges faced. Promote positive role models and success stories of women
entrepreneurs.

Work-Life Balance

Support initiatives that help women balance entrepreneurial activities with

family responsibilities, such as flexible working hours and affordable childcare
services.

Conclusion

Empowering women entrepreneurs is not just a matter of economic efficiency

but also of social justice. By creating an enabling environment where women can thrive
as entrepreneurs, societies can harness the full potential of half their population, leading
to more inclusive and sustainable development.

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WOMEN ENTREPRENEURSHIP IN INDIA

Women entrepreneurship in India has been gaining momentum, driven by

increasing awareness, government initiatives, and societal changes. Despite significant
challenges, many women are breaking barriers and making substantial contributions to
the economy.

Current Landscape of Women Entrepreneurship in India

1. Economic Contribution

Women-owned businesses in India contribute to various sectors, including

textiles, retail, education, health, and technology. According to recent reports, women
entrepreneurs constitute about 20% of the total number of entrepreneurs in India, a
figure that is steadily rising.

2. Sectoral Presence

Women are particularly prominent in the informal sector and micro, small, and
medium enterprises (MSMEs). There is a growing presence of women in tech startups,
e-commerce, and social enterprises.

Key Challenges Faced by Women Entrepreneurs in India

1. Access to Finance

Women often struggle to secure funding due to a lack of collateral, limited credit
history, and gender biases in lending practices. Financial literacy and awareness about
funding options are often lower among women.

2. Societal and Cultural Barriers

Traditional gender roles and societal expectations can limit women's ability to
pursue entrepreneurship. Balancing family responsibilities with business activities
remains a significant challenge.

54
3. Education and Skill Development

Many women lack access to formal business education and entrepreneurial

training. Skill development programs tailored for women are often limited in reach and
effectiveness.

4. Networking and Mentorship

Women have less access to professional networks and mentorship opportunities,

which are crucial for business growth. Gender biases in business communities can limit
opportunities for networking and collaboration.

5. Legal and Regulatory Hurdles

Complex and cumbersome regulatory processes can deter women from starting
businesses. Inadequate legal support and awareness about women’s rights in business
contexts are common issues.

Government and Institutional Support

1. Government Initiatives

The Government of India has launched several schemes to support women

entrepreneurs, such as the Mahila E-Haat, Mudra Yojana, and the Stand-Up India
Scheme. The Startup India initiative includes provisions to support women-led startups
through mentorship, funding, and incubation services.

2. Educational and Training Programs

Institutions like the National Institute for Entrepreneurship and Small Business
Development (NIESBUD) and various NGOs provide training and skill development
programs. Online platforms and e-learning modules are becoming increasingly popular
for delivering entrepreneurial education to women.

55
3. Financial Support

Various banks and financial institutions offer special loan schemes for women
entrepreneurs, such as the Stree Shakti Package for Women Entrepreneurs and
Annapurna Scheme. Venture capital funds and angel investors are increasingly focusing
on women-led startups.

4. Networking Platforms

Organizations like the Federation of Indian Women Entrepreneurs (FIWE) and

Women Entrepreneurs India offer networking, mentorship, and advocacy services.
Events, workshops, and conferences aimed at women entrepreneurs are being organized
more frequently.

Success Stories and Role Models

1. Kiran Mazumdar-Shaw

Founder of Biocon, she is one of India's leading biotech entrepreneurs and a

prominent figure in the industry.

2. Falguni Nayar

Founder of Nykaa, a successful online beauty and wellness retail platform that
has become a major player in the e-commerce sector.

3. Richa Kar

Co-founder of Zivame, a leading online lingerie retailer that has revolutionized

the industry in India.

4. Vani Kola

Managing Director at Kalaari Capital, she is a key venture capitalist supporting

women entrepreneurs and startups in India.

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Strategies for Promoting Women Entrepreneurship in India

1. Enhanced Access to Finance

Simplify the loan process and provide collateral-free loans. Increase awareness
about financial products tailored for women entrepreneurs.

2. Education and Skill Development

Expand access to entrepreneurial education and skill development programs.

Encourage STEM education and technical training for women from an early age.

3. Supportive Policies and Legal Frameworks

Streamline regulatory processes and provide legal assistance to women

entrepreneurs. Implement and enforce policies that promote gender equality in the
business environment.

4. Mentorship and Networking Opportunities

Develop more platforms for women to network, share experiences, and find
mentors. Promote women’s participation in business associations and trade networks.

5. Awareness and Advocacy

Raise awareness about the importance of women entrepreneurship through

media, campaigns, and success stories. Advocate for changes in societal attitudes
towards women in business.

Conclusion

Promoting women entrepreneurship in India requires a multifaceted approach

that addresses financial, educational, social, and regulatory challenges. By creating a
supportive environment, India can harness the potential of its women entrepreneurs to
drive economic growth and social progress.

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 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
NABARD

The National Bank for Agriculture and Rural Development (NABARD) is an

apex development financial institution in India, primarily focusing on the development
of agriculture, small-scale industries, cottage and village industries, handicrafts, and
other rural crafts. It plays a vital role in supporting rural development and ensuring
sustainable economic growth in rural areas.

Overview of NABARD

Established: 1982

Headquarters: Mumbai, Maharashtra, India

Mission: Promoting sustainable and equitable agriculture and rural development

through participative financial and non-financial interventions, innovations, technology,
and institutional development.

Functions of NABARD

1. Credit Provision

NABARD provides refinancing to lending institutions in rural areas, which

include cooperative banks, regional rural banks (RRBs), and scheduled commercial
banks. It ensures the flow of credit to agriculture, small-scale industries, and rural
enterprises.

2. Developmental Functions

It supports the development of agriculture and rural sectors through various

initiatives, including the promotion of sustainable practices, infrastructure
development, and capacity building. NABARD conducts research and provides training
to improve agricultural productivity and rural livelihoods.

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3. Supervisory Functions

NABARD supervises cooperative banks and regional rural banks to ensure their
financial health and operational efficiency. It offers guidelines and support to these
institutions to enhance their functioning and compliance with regulations.

Key Schemes and Initiatives

1. Rural Infrastructure Development Fund (RIDF)

Established to finance ongoing rural infrastructure projects that could not be

completed due to financial constraints. Focuses on improving infrastructure in
agriculture, irrigation, rural connectivity, and social sectors.

2. Pradhan Mantri Awas Yojana – Gramin (PMAY-G)

NABARD supports the government’s initiative to provide housing for all in rural
areas. It provides financial assistance to build affordable and durable houses.

3. Self-Help Groups (SHGs) and Microfinance

NABARD promotes the Self-Help Group-Bank Linkage Programme (SHG-

BLP), which is the largest microfinance program in the world. It aims to empower rural
women by facilitating access to financial services and encouraging savings and
entrepreneurship.

4. Watershed Development Programme

Focuses on the conservation and management of natural resources, particularly

soil and water. Promotes sustainable agriculture through watershed management, which
improves water availability and agricultural productivity.

5. Farmers' Producers Organizations (FPOs)

NABARD supports the formation and strengthening of FPOs to enhance farmers'

collective bargaining power. Provides training, capacity building, and financial
assistance to these organizations.

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6. Tribal Development Programme

Aims to improve the livelihoods of tribal communities through sustainable

agriculture, horticulture, and other income-generating activities. Focuses on capacity
building, infrastructure development, and access to markets.

Role in Women Entrepreneurship and Empowerment

1. Women Self-Help Groups (WSHGs)

NABARD has been instrumental in promoting WSHGs, which help women in

rural areas access credit, savings, and skill development opportunities. These groups
empower women to start and manage their own enterprises, contributing to their
financial independence and social status.

2. Micro-Enterprise Development Programmes (MEDPs)

NABARD organizes training programs to equip women with skills to start and
run micro-enterprises. Provides necessary financial support and mentoring to ensure
the success of these ventures.

3. Capacity Building

Conducts workshops and training sessions focused on leadership, management,

and technical skills specifically designed for women entrepreneurs. Encourages
participation in various rural development projects to enhance their business acumen.

4. Impact and Achievements

NABARD has significantly contributed to rural development and poverty

alleviation in India through its financial and developmental interventions. It has
facilitated the formation of millions of SHGs, impacting the lives of rural women and
their families. The institution has played a crucial role in building rural infrastructure,
enhancing agricultural productivity, and promoting sustainable development practices.

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Conclusion
NABARD's comprehensive approach, combining financial support, capacity
building, and policy advocacy, continues to drive substantial improvements in India's
rural economy and livelihoods. Its focus on inclusive growth ensures that the benefits
of development reach the most marginalized and vulnerable sections of society.

61