ENTREPRENEURSHIP

DEVELOPMENT and MSME

Prof. Vimal Mathur

DBS Global University
• What do you aspire to be after graduating from
DGU?
• A Businessman OR a Senior Executive in the
Corporate?
• Why not a Businessman?
• Risk?
• Is a job safe from risk?
• Who gets an out-of-turn/early promotion in an
organisation?
• Hard worker? ……. NO
• An Intrapreneur
DEFINITION
 DEFINITION
• CREATIVITY
• INNOVATION
• To do something NEW,
• Does things in a DIFFERENT WAY
• Find & Fill A GAP
• RISK TAKING
• To bring a CHANGE
• For IMPROVEMENT
• For more PRODUCTIVITY
• For EFFICIENCY
• To take the LEAD
• For PROFITABILITY …….?
• For OBJECTIVES
 DEFINITION
Pronunciation:
AWN-TRUH-PRUH-NYOH
ON-TRU-PRU-NIO/NUR

French Word meaning “To Undertake”

Authors:
• Adam Smith
• Peter Drucker
• J. B. Say
• Joseph Shumpeter
• John Kaso and Howard Stavenson
• Richard Cantillon
• ..
• ..
 Need for Entrepreneurship
• Yardstick of development of a nation
• Lifeline of a nation
• Employment opportunities
• Growth indicator
• Profitability
• Individual’s development
• Vent/outlet to creativity
• Creative entrepreneurs are agents of progress
 CONCEPTS
• Entrepreneur
• Intrapreneur
– Manager
– Worker
• Entrepreneurship
• Enterprise

- Entrepreneur - a PERSON / INDIVIDUAL who starts a

business enterprise. - Actor
- Entrepreneurship - PROCESS of creation of enterprise - Act
- Enterprise – OUTCOME of the actor and act. – a business
organization that is formed.
Entrepreneur vs Intrapreneur

• Status – owner, employee

• Capital / investment
• Freedom to work
• Risk taking apetite
• Responsibility/ guarantee
• Rules regulations
 Entrepreneur vs Manager
• Venture creation
• Innovation
• Risk taking
• Status
• Reward
• Response to change
 Qualities of an Entrepreneur
• Innovative / creative
• Thinks out-of-the-box
• Risk taker
• Resourceful
• Decision-maker
• Promoter
• Leadership qualities
• Business minded
 FUNCTIONS of an ENTREPRENEUR
• Scouting for Opportunities
• Generation of Business Idea
• Converting the Idea into Reality
• Arranging Resources
• Supply of Capital
• Establishment of Enterprise
• Managing the Enterprise
• Growth and Development
 Types of Entrepreneurships
• Innovative entrepreneurs
• Adoptive / imitative entrepreneurs
• Fabian entrepreneurs
• Drone entrepreneurs

• Individual entrepreneurs – sole proprietors

• Institutional entrepreneurs – Partnerships
• Corporate entrepreneurs
• Entrepreneurs by Inheritance – Second generation
• Trading entrepreneurs - Traders
• Industrial entrepreneurs - Manufacturers
• Agricultural entrepreneurs
• Technical entrepreneurs
• Non-technical entrepreneurs
• Professional entrepreneurs - BOT
• First Generation entrepreneurs
• Women entrepreneurs
• Social entrepreneurs
 Theories
• Max Weber’s theory of social change
• Hoselitz Sociological Theory
• Trait Theory
• Economic Theory
• Schumpter’s Innovation Theory
• McClelland’s Psycological Theory
• Theory of Social Behaviour
• X – Efficiency Theory
Factors favouring Entrepreneurship
• Independent way of life
• Achievement orientation
• Implementation of ideas
• Insecurity of job
• Family business
• Risk taking
• Govt. economic policy
• Life path circumstances
• Environmental factors
 Social factors in india
• Family background
• Social status
• Caste and religion
• Social mobility
 ECONOMIC FACTORS
• Government’s policy
• Institutional Finance
• Industrial Estates
• Availability of raw materials
• Availability of machinery
• Marketing facilities
Reasons for failure of entrepreneurship
• Premature Start
• Lack of Capital
• Flawed business plan
• Weak Marketing
• Poor audience development
• Ineffective team
• Competition
• Failure to adapt to market
• Sole Founder
 WOMEN ENTREPRENEURS
Definition:
• Women entrepreneurs are those entrepreneurswho have taken initiative
in promoting and runningan enterprise by having a controlling interest in
that particular enterprise.
• An enterprise owned and administered by awoman entrepreneur with a
minimum financial interest of 51% in the share capital and giving atleat
50% employment to women would be treated as women enterprise……
Central Govt. 1988 (employment criterion was dispensed with in 1991)
• A small scale industrial unit / industry or service related service or
business enterprise managed by one or more women entrepreneurs in
proprietory concerns in which she/they individually or jointly have of
share of capital of not less than 51 percent as
partners/shareholders/directors of pvt ltd companies/members of
cooperative societies…… current def.
EMERGENCE OF WOMEN ENTREPRENEURS

• Awakening of the society

• Awakening of gender equality – birth right
• Increasing level of education among women
• Desire for economic independence
• Urge for self realization
• EDPs organized
• Institutional support to women entrepreneurs
 PROBLEMS / CHALLENGES
• Male dominated society
• Lack of entrepreneurial aptitude
• Financial problems
• Marketing problems
• Family conflicts and mistrust
• Higher cost of production
• Social barriers
• Lack of self confidence
• Lack of exposure / information (rural)
 GOVERNMENT INITIATIVES
• Earlier focus was on improvement in maternal and child health and nutrition services.
• In 1970 focus changed from welfare to development approach.
• In 1980 multi disciplinary approach
8th Five year plan
• Increase employment and income generating activities.
• 80% in rural
• “Women in agriculture” 1993 – training women farmerswith small holdings in agri, animal
husbandry, horticulture, dairying, fisheries, bee keeping…
• Women cooperatives with financial assistance.
• Khadi and Village Industries Commission (KVIC) – employment opportunities..
GOVERNMENT SCHEMES
o PMRY – Prime Minister Rozgar Yojna
o EDP – Entrepreneurial Development Program
o IRDP (SJGSY) – Integrated Rural Development Program
o JRY (JGSY) – jawahar rozgar yojna
o TRYSEM – training of rural youth for self employment
o DWCRA – development of women and children in rural areas
9th Five year plan
Women component plan
o More than 30% funds allocated to women related sectors
o WDC – Women Development Corporations – fwd and backward
linkages provided
o TREAD – (Trade related Entrepreneurship assistance and
development – 1998 – SIDBI
o SGSY – Swarnjayanti Gram Swarozgar Yojna – support to group
activities – SHG (Self Help Group
o MUN – Mahila Udyam Nidhi
o MVN – Mahila Vikas Nidhi
o MSC
o WEDPs
o MDFWE
o Industrial Estates for women entrepreneurs
CONSORTIUM OF WOMEN ENTREPRENEURS OF INDIA
 CWEI is a common platform to help women entrepreneurs find innovative techniques of
production, marketing and finance.
 Includes NGOs, SHGs, Institutions, voluntary organisations
 Acts as a link between Indian and overseas agencies
 MVN – Mahila vikas nidhi – Rs.80.4 million sanctioned under this. Training, facilities, other
infra
 MCS – micro credit scheme –SIDBI sanctioned Rs.810.5 million
 PMRY – loans
 RMK – Rashtriya Mahila Kosh – micro credit to poor women
 STEP – Support for training and Employment program
 NISIET
 SISI
 SFC
 NSIC
 NABARD
District Industries Centres (DIC) – to conduct training lectures seminars in Girls colleges and
institutes
UGC has made this subject compulsory part of curriculum in
higher education
 Women associations
• NAYE (National Alliance of Young Entrepreneurs) –
women entrepreneurs wing
• Indian Council of Women entrepreneurs
• FICCI Ladies Organisation
• National Commission of Self Employed women in
the informal sector
• WAWE – WORLD Association of women
entrepreneurs
• ACWW – Associated country women of the WORLD
BUSINESS PLANNING PROCESS
 BUSINESS PLAN
• To convert an idea into reality
• A roadmap for the project
• A blueprint of actions to be taken
• It’s the process / flow chart of activities to be
undertaken
• Measurement of progress
 ELEMENTS
• GENERAL INTRODUCTION
• BUSINESS VENTURE / PROJECT
• ORGANISATIONAL PLAN
• PRODUCTION PLAN
• HUMAN RESOURCE PLAN
• MARKETING PLAN
• FINANCIAL PLAN
• MISCELLANEOUS
– MARKET RESEARCH REPORT
– CONTRACTS
– CONTINGENCY PLAN
 PROJECT FEASIBILITY PLAN
• Executive Summary
• Objectives
• Product / Service
• Market survey and analysis
– Market characteristics
– Customer’s needs
– Viability
– Quality
– Turnover
• Human Resource and Management
• Financial profile
– Costs of production
– Revenue to be obtained
– Profits and losses
– Inventory
• Raw Material
• Semi finished goods
• Finished goods
• Debt – loans
• Equity

• Future projection
• Operational plan
• Marketing Strategies - Planning for all ‘Ps” of marketing
FEASIBILITY STUDY
 FEASIBILITY STUDY
• It provides a basis for investment decision
• Project:
– A project of a defined capacity at a selected location, using a particular
technology in relation to defined materials and inputs at………
• The purpose of feasibility study is to examine the viability of the
project.
• Contains an analysis of following aspects:
• Technical
• Commercial
• Financial
• Socio-economic
 TECHNICAL ASPECT
• Location
– Proximity to the market
– Proximity to the supply base
– Labour availability
– Logistics issues
• Plant capacity
• Plant and equipment
• Infrastructure
• Effluent treatment and discharge
• Foreign collaboration
 COMMERCIAL ASPECT
• Recession
• Seasonal nature
• Technological changes
• Competition
• Industrial sickness
 FINANCIAL ASPECT
• Estimated cost of the project
– Fixed capital
– Working capital
• Capital structure
• Promoter’s contribution
• Debt equity ratio
• Availability of the anticipated resources
• Applicant’s existing commitments in other projects
• Projection of future profitability
• Projection of cash flows – gestation and after
• IRR
• Debt service coverage
• Domestic resources cost
• Import substitution – including govt. incentives
 SOCIO ECONOMIC FEASIBILITY
• Contribution to the following:
• Employment generation
• Income distribution
• Forex earnings
• Self reliance
• Development of backward regions
• Development of small scale industries
• Development of infrastructure
• Development of technology
• Improvement of quality of life of general public
LEGAL FORMS OF OWNERSHIP
 TYPES OF OWNERSHIPS
• SOLE PROPRIETORSHIP
• PARTNERSHIP
• LLP (LIMITED LIABILITY PARTNERSHIP)
• HUF
• JOINT STOCK COMPANY
• PUBLIC and PRIVATE COMPANIES
• COOPERATIVE ORGANISATIONS
 PROCEDURE OF FORMATION OF A JS
COMPANY
• PROMOTION
• INCORPORATION
• CAPITAL SUBSCRIPTION
• COMMENCEMENT OF BUSINESS
FINANCIAL INSTITUTIONS
 SOURCES OF FINANCE
• OWNER’S FUNDS
– Equity shares
– Preference shares
– Retained earnings
• BORROWED FUNDS
– Debentures
– Bank loan
– Financial institutions
– Public deposits
– Lease financing
– Commercial papers
• VENTURE CAPITAL
• LEASE INANCE
FINANCIAL INSTITUTIONS IN INDIA
• IFCI
• SIDBI
• NSIC
• SFC
• SIDCs
• IDBI
• ICICI
• IIBI
 OBJECTIVES & FUNCTIONS OF FINANCIAL
INSTITUTIONS
• IFCI
• SIDBI
• NSIC
• SFC
• SIDCs
• IDBI
• ICICI
• IIBI
GOVERNMENT POLICY
and
SUPPORT
 GOVT. POLICY - MSME
Government’s industrial policy
• PROTECTIVE MEASURES
– Reservation of items under SSI
– Concessions
– Purchase preference
• PROMOTIONAL MEASURES
– Supply of scarce raw material
– Reasonable prices
– Setting up raw material depots
– Setting up of clusters
– Common testing facilities
– SSSIDC in securing govt. orders
– Preference in land allocation
– Power connection
– Power at concessional rates
– Setting up industrial estates and sheds
– Technical assistance by CSIO
– Concessional finance through institutions
• INSTITUTIONAL MEASURES
– training by small scale industry development organization
(SSIDO)
– Machinery on hire purchase by NSIC
– DIC for coordination
– Collective marketing by KVIC
– Silk, Coffee, Tea BOARDS formed for marketing
– Financial assistance (fixed and working capital) by SIDBI and
SIDF
– Industrial Parks for infrastructure
SMALL INDUSTRY POLICY STATEMENT 1991

• Adequate Finance
• Recognition of tiny and service units
• Improvements in loan procedure
• Technological advancements
• Export development centre
• marketing
 RECENT POLICY MEASURES
• Raising of investment limit
• Enhancing excise exemption limits
• Collateral security issues
• Technology upgradation
• MDA scheme
• Credit extension
 MSME

Current Revised Current Revised

Enterprise
Investment Investment Turnover Turnover
Category
Limit Limit Limit Limit

Micro
₹1 crore ₹2.5 crore ₹5 crore ₹10 crore
Enterprise

Small
₹10 crore ₹25 crore ₹50 crore ₹100 crore
Enterprise

Medium
₹50 crore ₹125 crore ₹250 crore ₹500 crore
Enterprise
• Higher Ceilings = Greater Flexibility: Enterprises no longer need to worry about crossing older thresholds
too quickly. They can invest in machinery, technology, and manpower to enhance competitiveness.
• Holistic Assessment (Investment + Turnover): By considering turnover, the government ensures that the
classification reflects a business’s actual market presence, not just its capital expenditure.
• Reduced Compliance Burden: With standardised and unified definitions across manufacturing and
services, documentation and compliance requirements are more straightforward.
• Inclusive Economic Growth: By expanding the range of MSMEs, more companies can benefit from
government schemes such as credit guarantees, subsidies, and easier loan availability.
• Benefits of the New MSME Classification
• The new msme classification provides tangible advantages for businesses:
• Access to Collateral-Free Loans: Many public and private sector banks offer specialised loan products at
lower interest rates for MSMEs, reducing financial barriers to growth.
• Easier Government Tender Participation: Certain public contracts are reserved for MSMEs, helping smaller
players get a fair chance in high-value projects.
• Tax and Duty Concessions: MSMEs may enjoy duty exemptions and other fiscal benefits, making their
operations more profitable and sustainable.
• Encouragement for R&D and Technology Upgrades: Through various government support schemes,
MSMEs can modernise processes, invest in research, and adopt cutting-edge technology without straining
their finances.