Entrepreneurship

Management
Schumpeter’s Views on
entrepreneurship
• “Entrepreneurs are individuals who exploit market opportunity
through technical and/or organisational innovation” (Innovation
theory or dynamic theory) 1991

• Key terms- Innovation, disruption, creative destruction, and economic

growth
 Examples
•New Product or Service – Introduction of a new good or service that consumers are not yet familiar with.
Example: Ola Cabs
•New Method of Production – Adoption of a new method of production or process innovation.
Example: Amul
•New Market – Exploring and developing new markets for existing products.
Example: Patanjali Ayurved
•New Source of Supply – Utilization of new sources of raw materials or semi-finished goods.
Example: Reliance Jio
•New Organizational Structure – Establishment of a new business model or industry structure.
Example: Zomato
Characteristics of an entrepreneur
• Curiosity- Elon Musk
• Risk tolerance- Kiran Mazumdar Shaw
• Willingness to experiment- Jeff Bezos
• Adaptability- Mr. Narayan Murthy
• Decisiveness- Reed Hastings
• Self-Awareness- Ratan Tata
• Comfort with failure- Ritesh Agrawal
• Persistence- Steve Jobs
• Innovative thinking- Vineeta Singh
• Long term focus- Dr. K Anji Reddy
Functions of an Entrepreneur
Internal factors affecting
entrepreneurship
• Human Resources
• Organisational Culture
• Operational Processes and Efficiency
• Capital and Financial Resources
• Leadership and Communication style
External factors affecting
entrepreneurship
• Economic Factors
• Technological Factors
• Legal and Political Factors
• Social Factors
• Competitive landscape
• Environmental Factors
Barriers to Entrepreneurship
• Financial Barriers
• Social Barriers
• Personal Barriers- (Motivation, trust, passion, confidence, vision)
• Political Barriers
• Environmental Barriers-(Land, labor, raw material)
• Regulatory Barriers
Entrepreneurial Development Plan
(EDP)
• The Entrepreneurial Development Programme (EDP) is meant to
assist an individual in improving his entrepreneurial motivation and
learning the skills and capabilities required to fulfill his
entrepreneurship role effectively.
• National Institute of Small Industry Extension Training (NISIET),
Hyderabad defined EDP as “An attempt to develop a person as an
entrepreneur through structural training. The main objective of such
an entrepreneurship development program is to increase
achievement motivation and entrepreneurial skills among less
privileged sections of society.”
 Objectives

• Development of small and medium enterprises

• Entrepreneurial qualities development
• Analyze the environment
• Formulate a project.
• The procedure of setting up an enterprise
• Acquire basic management skills.
• Develop an entrepreneurial culture.
• Generate employment
• Networking
Some other objectives
• Accelerate the pace of economic and industrial development
• Transform the Indian Economy
• Develop an entrepreneurial culture in the society
• Develop a sense of social responsibility among prospective
entrepreneurs
Phases of Training
Pre-Training Phase
- Selection of entrepreneurs
- Arrangement of infrastructure
- Tie-up with faculty for training
- Selection of necessary tools and techniques
- Training syllabus
- Publicity and campaigning
Training Phase
Post Training Phase (Review)
SSIDCs
• Small Scale Industries Development Corporation
Promote and support small-scale industries within their respective states
1960- First SSIDC in Kerela called KSIDC

Benefits-
Customized financial solutions
Technical and managerial assistance
Export promotion
Women’s entrepreneurial support assistance
Small and Medium Enterprises
• Defined by the Ministry of Micro, Small, and Medium Enterprises
• Governed by - MSME (Micro, Small and Medium
Enterprises) Act in 2006
Types (w.e.f. 01-07-2020)
Classification Micro Small Medium
Investment in Not more than 1 Not more than 10 Not more than 50
Plant, Machinery, crore crore crore
and Equipment
Turnover Not more than 5 Not more than 50 Not more than 250
crore crore crore
Types
• Manufacturing
• Ancillary
• Service
• Export units
• Cottage units- of part of organised sector
Characteristics
• Ownership- Usually single + Management
• Employment Generation (labour-intensive units)
• Forward linkages- Backward linkages
• Contribute to industrialisation
• Low gestation period
• Low level of capital
• Utilisation of local resources
• Better industrial relation
Challenges
• Financial and regulatory issues- tax compliance and labor law
challenges
• Low productivity and lack of innovation
• Competition
• Lack of professionalism
• Productivity issues
• Marketing issues
Growth prospects
• Growth rate 7%
• Contributes more than 30% of India’s GDP
• Jobs to more than 110 million people
• Projected to grow to $1 trillion by 2028
Role of SMEs in India
• Major source of employment
• Best examples of Make in India
• Seedbed for large-scale industries
• Help in development of backward regions as well as regional
development
• Contribution to employment generation
• Leads to social development
Incentives and subsidies by
government of India
• Mudra Loans- Shishu, Kishore, Tarun
• SIDBI branches in MSME clusters
• E-Commerce Export Hubs
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)- Banks and financial institutions
provide collateral-free credit, and the trust covers up to 85% of the default amount.
• Prime Minister’s Employment Generation Programme (PMEGP)- A subsidy of 15-35% of the project cost
is offered, depending on the location and beneficiary profile.
• Lean Manufacturing Competitiveness Scheme- The government covers up to 80% of the cost for MSMEs
adopting lean manufacturing techniques.
• Market Development Assistance (MDA) Scheme
• Zero Defect Zero Effect (ZED)
Setting up a small business
enterprise
Identifying the business opportunity
• Market trends
• Market survey
• Address a need or solve a problem
• Look for gaps in the local market
• Explore industry-specific options
• Consider Technology Driven opportunities
• Use tools for Idea generation- Brainstorming and mind mapping
Importance of creativity
• It fuels innovative problem-solving
• Gives a competitive edge
• Provides adaptability and flexibility
• Efficient use of resources
• Customer is engaged
• Problem anticipation and risk management
• Business expansion
Stages of setting a small scale
enterprise
• Identifying the opportunity and conduct research
• Making a product choice
• Process selection
• Arranging the finance
• Filing of Entrepreneur’s Memorandum- Section 8 of the Micro, Small and
Medium Enterprises Development (MSMED) Act, 2006
• Construction of building/ Hiring of a place of business
• Getting utility connections
• Getting 3M’s right- Men, Machinery, and Materials
• Exemption from compulsory license
Preparation of a business plan
• Executive Summary- brief description of the company’s history
• Mission and vision statement,
• Describe the company- Name+Address+Names of key people involved
• State the goals- Objective Statement
• Product and Service offerings- Describe your products and services
• Market analysis- Who are the competitors?
• Marketing and sales strategy
• Perform a business financial analysis
• Social Impact Goals (If any)
• Make a financial projection
• Summarize
Elevator Pitch
• Concise, persuasive summary to be delivered in 30-60 seconds
• Primary goal- to catch attention and pique interest in a short amount
of time
• The name elevator pitch comes from the idea that a speech should be
short enough to be delivered during the time it takes to ride an
elevator
Importance
• Making a strong first impression
• Highlighting your skills and value proposition
• Seizing Opportunities
• Demonstrating professionalism
• Building credibility
• Networking and lead generation
Project
Defining a project
• A project is a temporary endeavor that involves a series of tasks,
activities, and deliverables to achieve a specific outcome
• It is a carefully planned undertaking to create a unique product,
service, or result
• In the context of Logistics, a project refers to activities aimed at
improving or developing logistics operations, supply chain processes,
or infrastructure, which are critical to enhancing efficiency, reducing
costs, or meeting customer demands
Types of Project
• Capital Project
• Operational Projects
• IT Projects
• Automation projects
• Sustainability Projects
• Digitization Project
Types of opportunities

Additive Complementary Break-through

Opportunity Opportunity opportunity
• Better utilize the • Introduction of • Involves
existing resources new ideas and as fundamental
without involving such lead to change both in
a change in the changes in the nature and
character of the existing structure character of the
business up to some extent business
• Least risky • Risky • Risky
Project Identification
• Identification of a suitable project is very crucial
decision as the ultimate success of an entrepreneur
depends upon the right selection of the right project.
• It is concerned with finding out business opportunities
which are feasible and promising
Sources of Idea generation
• Study the performance of existing industries
• Export/Import agencies
• Availability of raw material and skilled labor
• Government policies and rules regulation
• Study of economic, social, and price trends
• Draw clues from consumption patterns abroad
• Identify unfilled psychological needs
Selection of an Idea
• Process of selecting a promising project idea from a list of various project
ideas based on certain conditions that are set by the entrepreneur
• It is the second step after project identification in the project planning cycle
• After gathering a large number of project profiles, the entrepreneur should
consider the following criteria for selecting a particular project:
• 1. Investment size
• 2. Location
• 3. Technology
• 4. Equipment
• 5. Marketing
Feasibility studies
• Technical feasibility
• Economic feasibility
• Legal Feasibility
• Operational feasibility
• Scheduling Feasibility
Appraisal
• Assessment of a project in terms of its economic (cb analysis, market
demand), technical (technology and site assessment), financial
(funding sources and stakeholder engagement), and social viability
(community impact and stakeholder engagement)
• Scan the project
Implementation
• Time frames
• Deliverables
• Tasks and deadlines
• Resource allocation information
• Risk management plan
Evaluation
Control
• Schedule management
• Cost management
• Risk management
• Performance management
• Communication management
Outline of a project report
• Project Overview
• Executive Summary
• Feasibility Analysis
• Business plan and Model
• Capital structure and Financial Plan
• Market analysis- Marketing and sales strategy
• Operational Plan
• Legal and Regulatory Compliance
• SWOT Analysis- Risk analysis and contingency plan
• Sustainability and impact assessment
• Timeline- Implementation Plan
 Types of
Entrepreneurship
Family Entrepreneurship
• Owned, managed, and passed down within a family.
• Started by one or more members of a family and involves multiple
generations over time
• Decisions and ownership are often controlled by the family
Advantages
• Strong trust and commitment
• Long term vision
• Quick decision making
• Cost savings
• Strong values and culture
• Stability
Disadvantages
• Conflicts and Emotions- Family disputes spilling over into business
• Lack of professionalism
• Resistance to change
• Succession issues
• Limited Talent pool
• Blurred boundaries
Women Entrepreneurship
• Women initiate, organise, manage, and operate a business venture
• A woman entrepreneur is a woman who plays a significant role in
managing and controlling a business enterprise, showing creativity,
innovation, and risk-taking abilities in the entrepreneurial process.
Advantages
• Economic Empowerment
• Social Change agents
• Diversity
• Better work-life balance models
• Role models
• Utilization of untapped potential
Challenges faced by women
entreprenrus
• Social and cultural barriers
• Lack of funding access
• Balancing Personal and professional life
• Limited Networking opportunities
• Lack of training and mentorship
• Security issues
International Entrepreneurship
• International Entrepreneurship is the process of identifying,
establishing, and managing business opportunities in foreign markets
by using innovative strategies, often from the early stages of a firm's
development
Advantages
• Access to larger markets
• Diversification of risk
• Competitive advantage
• Utilisation of global talent and resources
• Learning and innovation
• Brand globalisation
Disadvantages
• Cultural differences
• Regulatory and Legal Barriers
• Political and economic risks
• High initial costs
• Logistical challenges
• Language barriers
Social Entrepreneurship
• Social Entrepreneurship is the process of developing and managing
ventures that are mission-driven to address social issues, such as
poverty, education, health, environment, or inequality, using
entrepreneurial principles.
Advantages
• Positive Social impact
• Sustainability
• Attracts purpose-driven talent
• Community empowerment
• Reputation and goodwill
Disadvantages
• Balancing social mission and profit
• Limited funding options
• Scalability issues
• High dependency on grants issues
• Lack of skilled manpower
• Measurement of impact
Agripreneurship
• It involves identifying opportunities, innovating, and managing agri-
based businesses
• Adds value to agricultural products or services, improve farming
practices, and make agriculture more profitable and sustainable.
Advantage
• Rural employment generation
• Food security and sustainability
• Income diversification
• Innovation and technology use
• Government support
• Market linkages
Disadvantages
• Access to capital
• Lack of awareness and Training
• Infrastructure problems
• Climate dependency
• Market fluctuations
• Resistance to change