B i

Business Entrepreneurship
E t hi

Academic Session 2016 – 17
Paper Code: BAS 420

Dr V K Arora

Indira Gandhi Delhi Technical University for Women 
Kashmere Gate, Delhi
,

1
 Please Note (Important)

These slides of Business Entrepreneurship may not 
cover the entire syllabus.

You are required to refer all the class notes, examples 
and case studies (covered in the classroom) along with
and case studies (covered in the classroom) along with 
these slides for complete coverage and in view of 
examination.
 Unit 1

The entrepreneur, definition, characteristics; leadership, 
risk taking, decision making and business planning, role of 
entrepreneur, entrepreneurship and an entrepreneurial 
perspective, significance of entrepreneurship

Innovation and entrepreneur, entrepreneurial behavior
and psycho‐theories, social responsibility
 Entrepreneur

Derived from/ as French word

Entreprendre

which means to initiate or undertake

The word entrepreneur is approx. 190 years old, 
having come into English from French in 1828

4
 Who is Entrepreneur?

At least a Person

Who is a Person

Any Human Being

(but human are unique and critical)

Has own

i)) thinking,
g,
ii) working style and
iii) reaction after receiving

(may be right or wrong in one’s view)

5
Entrepreneur is a ‘Person’, who is IPS

I - Ability to initiate and Innovate

P - Can generate Profit and

S - Total work is dedicated to Society

Businessman Politician

Robber Employee

Di t
Director of any Institute
f I tit t

You

Detailed discussion in the classroom
6
 What is Entrepreneurial Development?

It’s a development by which a

Person

can be converted to an
Entrepreneur

Ma be b
May by their ‘o
‘own’
n’ b
by ‘others’ or ‘both’

Most complex phenomenon (Not a set of rules) 

with many factors like 

i)) p
psychological, ii) family imbibes, 
y g ) y
iii) qualification, iv) parental occupation, 
v) his standing etc.

It reflects; how to work?
7
 What is Entrepreneurship?
What is Entrepreneurship?

Socio‐economical
Socio economical activities; 
activities;
how an entrepreneur takes things (qualities & characteristics) in his 
nature, team and organization i.e. enterprise. 

It is a process; how he works?

That means it is in between an ‘Entrepreneur’ and ‘Enterprise’

and if we combine all,,,

8
Any Human Being
(but human are
unique and critical)
Has own thinking, Person
working style and Most complex
reaction after phenomenon (Not a
receiving. set of rules) with
Entrepreneurial  many factors like
Development psychological, family
Ability to initiate imbibes, qualification,
and innovate for parental occupation.
p p
profit concern with It reflects; how to
optimism, work?
Entrepreneur
hardwork, analysis
and administration. Socio-economical
Work is dedicated activities; how an
to the society. entrepreneur takes
Entrepreneurship
things in his nature,
team and
An object, to be organization. It is a
achieved by a team process;; how he
p
(f the
(for th growthth off
Enterprise works?
all) in Growth,
Development and
Support phases.
Led by Entrepreneur
with Clear and
S bl Vision.
Stable i i

9
Traditional Definition of Entrepreneurship
Traditional Definition of Entrepreneurship

• Risk Taker
• Founder
• Innovator
• Capitalist
• Scoundrel
• Born not Learned
 Some Views of Entrepreneurship
Francis A. Walker (1876) ‐
i lk ( ) the new captains of industry as the 
h f d h
principals agents of production and industrial process.
Joseph Schumpter
Joseph Schumpter (1934) 
(1934) ‐ the entrepreneur is the man who gets 
the entrepreneur is the man who gets
new things done.
Peter F. Drucker (1964) ‐ ’maximization of opportunities’ is a 
meaningful indeed a precise definition of the entrepreneurial job
meaningful, indeed a precise, definition of the entrepreneurial job.  
It implies that effectiveness rather than efficiency is essential in 
business.  The pertinent question is not how to do things right but 
how to find the right things to do, and to concentrate resources and 
efforts on them.
William Baumol (1968) ‐ he is the individual who exercises what in 
the business literature is called ‘leadership’.
the business literature is called  leadership .
Albert Shapero (1975) ‐ a kind of behavior that includes: 1) initiative 
taking, 2) the organizing or reorganizing of social / economic 
mechanisms to turn resources and situations to practical account 3)
mechanisms to turn resources and situations to practical account, 3) 
the acceptance of risk of failure. A major resource utilized by the 
entrepreneur is himself.
Qualities of Entrepreneur

What do YOU think!!!

Remember At-least THREE

Which All NEXT

12
 Qualities All Together

Creative
C eat e Flexible
e be Proactive
oact e
Clear Vision Good Memory Leadership
Analytical Ability to diverse
Ability to diverse Stable
Hardworking Realistic Optimistic
Decision Maker Public Relation
Public Relation Risk Taking
Risk Taking
Well Informed Competitiveness Ability to take work
Determinant Love for success
Love for success Administrative Ability
Administrative Ability

13
Learning Organization

Entrepreneurial Culture

Discussion in the classroom
 Leader Vs. Entrepreneur
Leadership Vs. Entrepreneurship
p p p

Phenomenon difference

Leader: socio‐political
Entrepreneur: socio‐economical

Detailed discussion in the classroom
 Leadership

Why entrepreneur should have leadership quality

Important to handle his team
What is Charismatic Leadership? Max Weber, a sociologist, was the first scholar 
to discuss charismatic leadership More than a century ago he defined charisma
to discuss charismatic leadership. More than a century ago, he defined charisma 
(from the Greek for “gift”) as “a certain quality of an individual personality, by 
virtue of which one is set apart from ordinary people.

These are not accessible to the ordinary person, but are regarded as of divine 
origin or as exemplary, an on the basis of them the individual concerned is 
treated as a leader.” Weber argued that charismatic leadership was one of several 
ideal types of authority
ideal types of authority.

Key Characteristics of Charismatic Leaders

Vision and articulation. Has a vision‐ expressed as an idealized goal‐ that 

proposes a future better than the status quo; and is able to clarify the 
importance of the vision in terms that are understandable to others.
Personal risk. Willing to take on high personal risk, incur high costs are engage in 
Personal risk. Willing to take on high personal risk, incur high costs are engage in
self‐sacrifice to achieve the vision.
Sensitivity to follower needs. Perceptive of others’ ability and responsive to their 
needs and feelings.
U
Unconventional behavior.
ti l b h i Engages in behaviors that are perceived as novel and 
E i b h i th t i d l d
counter to norms.
 Leadership from last 100 years
p y
1900’s the great man  it’s an innate ability; who is born to lead?
theories
1930’s
930 s ggroup theory 
oup t eo y how leadership emerges and develops in small 
o eade s p e e ges a d de e ops s a
groups.
1940’s‐50’s trait theory  what universal traits (qualities/ characteristics/ 
personalities) are common to all leaders.
1950’s‐ 60’s behavior theory  what key behavioral patterns result in leadership.
1960’s‐70’s contingency/ establish which leadership behaviors succeeded in 
situational specific situations.
p
1978 MacGregor Burns introduced the concept of Transformational 
leadership in his book Leadership, during his study of political 
leadership; later the same term used in organizational psychology as 
well.
1980’s  excellence what interaction of traits, behaviors, key 
onward situations, and group facilitation allows people to 
l d
lead organizations to excellence? 
i ti t ll ?
From “Leadership” Burns (1978)
“ d hi ” ( 9 8)

• Transactional leadership: occurs when one person takes the initiative in making 
contact with others for the purpose of an exchange of valued things.
p p g g
In other words it motivate followers by appealing to their own self‐interest. 
Transactional leaders use conventional reward and punishment to gain compliance 
from their followers.

• Do as I say and you will get a raise.
• Meet this quota or you will get fired.

• Transformational leadership: occurs when one or more persons engage with 
others in such a way that leaders and followers raise one another to higher levels 
of motivation and morality.”

In Maslow’s hierarchy of Needs, Transformational Leadership would fit into
the higher levels, as it requires a high level of authenticity, self esteem and self 
actualization to successfully be a Transformational Leader.
Transactional Leader

Contingent Reward: Contracts exchange of rewards for effort, promises rewards for 
good performance, recognizes accomplishments.
Management by Exception (active): Watches and searches for deviations from rules
Management by Exception (active): Watches and searches for deviations from rules 
and standards, takes correct action.
Management by Exception (Passive): Intervenes only if standards are not met.
Laissez‐Faire: Abdicates responsibilities, avoids making decisions.

Transformational Leader

Idealized Influence: Provides vision and sense of mission, instills (gradually but 
Idealized Influence: Provides vision and sense of mission instills (gradually but
firmly establish) pride, gains respect and trust.
Inspirational Motivation: Communication high expectations, uses symbols to focus 
efforts, expresses important purposes in  simple ways.
I ll
Intellectual Stimulations: Promotes intelligence, rationality, and careful problem 
lS i l i P i lli i li d f l bl
solving.
Individualized Consideration: Gives personal attention, treats each employee 
individually, coaches, advises.
y, ,
How do leaders develop the bonds necessary to make TF leadership possible?

Bernard Bass has four interrelated components (4 I) that he views as essential for 
B dB h f i l d (4 I) h h i i lf
leaders to move followers into the transformational style.

First is idealized influence. Genuine trust must be build between leaders and followers. 
“If the leadership is truly transformational, its charisma or idealized influence is 
characterized by high moral and ethical standards.”

The second component is
The second component is inspirational motivation. 
inspirational motivation “Its
Its inspirational motivation
inspirational motivation
provides followers with challenges and meaning for engaging in shared goals for all to 
move forward.

Next, is intellectual stimulation, It  helps followers to question assumptions and to 
generate more creative solutions to problems. The leader’s vision provides the 
framework for followers to see how they connect to the leader, the organization, each 
other and the goal
other, and the goal.

Lastly, is individual consideration, Individual consideration treats each follower as an 
individual and provides coaching, mentoring and growth opportunities. This approach 
not only educates the next generation of leaders, but also fulfills the individuals need 
for self‐actualization, self‐fulfillment, and self‐worth.
 Management through leadership
Management through leadership

Idealized Influence Moral & Ethics

Inspirational Motivation Vision & Motivation
Transformational
Leadership
p
Creative Problem Solving & 
Intellectual Stimulation
Emotional Intelligence

Individual Consideration Training & Growth
 Note 1

PEST
(Political‐Economical‐Social‐Technological)
Analysis
 Note 2

SWOT
(Strength‐Weakness‐Opportunities‐Threats)
Analysis
Entrepreneurial Behavior and Psycho‐theories
 Psychometric and behavior
Psychometric and behavior

a) Acumen tests b) Personality tests

Behavior

Detailed discussion in the classroom

26
 Entrepreneurship in YOU

Involves Psychometric and SWOT tests/ analysis

a) Memory tests a) Norms tests
b) Observation tests
Observation tests b) Values tests
b) Values tests
c) MI tests c) Beliefs tests
d) SI tests d) Physical fitness tests
e)) Aptitude tests
p e) Motivation tests
)
f) Competency tests f) Ethical tests
g) Acumen tests g) Personality tests

Detailed discussion in the classroom

27
Ethics and Social Responsibility
 Ethics involves the study of moral issues and choices

– A set of principles prescribing a behavioral code that 
explains what is good and right or bad and wrong; 
ethics may outline moral duty and obligations.
thi tli ld t d bli ti

– Provide the basic rules or parameters for conducting 
any activity in an “acceptable” manner.
Ethics

A set of values that describe what is right or wrong, good or

bad.
bad
Ethics Definition adapted from UNESCO/ IUBS/ Eubios Bioethics Dictionary:

A system of moral principles or standards governing conduct.

1. A system of principles by which human actions and proposals may be judged

good or bad,
bad right or wrong;
2. A set of rules or a standard governing the conduct of a particular class of human
action or profession;
3. Any set of moral principles or values recognized by a particular religion, belief or
philosophy;
4. The principles of right conduct of an individual. Ethical behavior requires the
ability to reason, to understand the consequences and to make choices about
one’ss actions. [Latin ethicus or Greek ethikos pertaining to "ethos"
one ethos or character].
 Understand the terminology related with ethics

1. Ethical System (system of ethics) being a broad range

of cases; should be generalizable.
generalizable Although
generalizable, conflicts will always arise between
ethical principles.
2. Ethical problems are linked with ethical and unethical
issues.
3. Ethical Principles are the theories to solve ethical
problem.
4 Ethical Theories are the application part of the ethics
4.
Areas of Responsibility

A) General Public
B) Customer
C) Employee
D) Investors
Responsibility to General Public
• Public Health Issues. What to do about inherently dangerous products 
such as alcohol, tobacco, vaccines, and steroids.
• Protecting the Environment. Using resources efficiently, minimizing 
pollution.
• Recycling. Reprocessing used materials for reuse. 
• Developing
Developing the Quality of the Workforce.
the Quality of the Workforce. Enhancing quality of the 
Enhancing quality of the
overall workforce through education and diversity initiatives.
• Corporate Philanthropy. Charity, Cash contributions, donations of 
equipment and products, and supporting the volunteer efforts of 
i t d d t d ti th l t ff t f
company employees.
Responsibility to Customers
• The
The Right to Be Safe.
Right to Be Safe Safe operation of products, avoiding product 
Safe operation of products avoiding product
liability.
• The Right to Be Informed. Avoiding false or misleading advertising 
and providing effective customer service.
d idi ff ti t i
• The Right to Choose. Ability of consumers to choose the products 
and services they want.
• The Right to Be Heard. Ability of consumers to 
express legitimate complaints to the appropriate parties.
R
Responsibility to Employees
ibilit t E l
• Workplace Safety. Monitored by Occupational Safety and Health 
Administration.
• Quality‐of‐Life Issues. Balancing work and family through flexible 
work schedules, subsidized child care, and regulation such as the 
Family and Medical Leave Act of 1993.
y
• Ensuring Equal Opportunity on the Job. Providing equal 
opportunities to all employees without discrimination; many 
aspects regulated by law
aspects regulated by law.
• Age Discrimination. Age Discrimination in Employment Act of 
1968 protects workers age 40 or older. 
• Harassment and Sexism. Avoiding unwelcome actions of a sexual 
nature; equal pay for equal work without regard to gender.
Responsibility to Investors

• Obligation to make profits for shareholders.
Obligation to make profits for shareholders.

• Expectation of ethical and moral behavior.

• In
Investors protected by regulation by the Securities 
estors protected b reg lation b the Sec rities
and Exchange Commission and state regulations.
 Corporate Social Responsibility

Responsibility of a Corporate towards Society

Why entrepreneurs should go for CSR activities?
 Proceeding of CSR

Responsible Corporate
Responsible Corporate
Why it is required?

Where to do?

How does it help?

What does it impact? Corporate

H i
How it may be done?
b d ?

When to take first step (& Iteration)?
 Nature of Corporate Social Responsibility

Encompasses the Economical, Legal, Ethical and 
Philanthropic (love of the fellow human) expectations 
p ( ) p

placed
placed  on organization

by society at a given point of time.

Why entrepreneurs should go for CSR activities?
 Philanthropic Responsibility
Desired

Ethical Responsibility
Expected

Economic & Legal Responsibility
Required

By Society

Why entrepreneurs should go for CSR activities?
 Unit 2

Promotion of a Venture: Opportunities analysis; external 
environmental analysis, economic, social and 
technological, competitive factors
g , p

Fundamentals of feasibility plan

Forms of business enterprises, Sole proprietorship, 
partnership and corporations

Legal requirements of establishment of a new unit.
An opportunity is a situation in which something can 
b
be created and/ or improved, usually when value
d d/ d ll h l
can be created and/or improved for a constituency 
and captured
p by the creator.
y
 Opportunity Recognition to Growth

Experience and “Fit” Marshal

related knowledge analysis resources

Opportunity
Opportunity Opportunity Growth and
recognition
evaluation exploitation profit
or creation

Creativity Market valuation Logistics

Analysis of External Factors
Analysis of Societal Environment

Economical

Technological

Political – Legal

Socio‐Cultural

Global
1. Economical

Economic Development Climate GDP & GDP Trend

Unemployment Level Per‐capita Monitory Policy
Currency convertibility Wage levels Fiscal Policy
Regional Economic Association and Nature of Competition

2. Technological

Regulations on technology transfer Energy Availability
Energy cost Natural Gas Availability Transportation Network
Automation Skills & Workforce Patent‐Trade Mark Protection
ISO IT/ Internet/ Tele‐fax Infrastructure
3. Political – Legal

Form of Govt. Political Ideology Tax Law

Stability of Govt. Govt. attitude towards foreign/ particular company
MFN Regulation for foreign companies/ particular companies
Regulation for foreign companies/ particular companies 
Foreign Policy Terrorist Activity Legal System

4. Socio‐Cultural

Demographics Customs Norms/ Values Language

Life expectations Life Style Social Institutions Human Rights
Literacy Level
y Attitude towards foreigners
g Ethics

5. Global

Characteristics of Global Market
Characteristics of Global Market Characteristics of Regional Market
Characteristics of Regional Market
International Political event US/ Japan/ European Economy
Threats from BRICK WTO/ WHO
International Logistics BOT/ BOP
Export/ Manufacturing Clusters War/ Conflicts
Porter’s Industry Analysis

Five forces Model
Porter’s Industry Analysis

Other Stack
Other Stack‐holders
holders
(Relative power of 
Stack holders)
Government, Union, 
Share Holders
 Competitors Analysis
C tit A l i
(No set rule)

1. Competitors Strengths and Weaknesses
2. Competitors Assumptions/ Values
3. Competitors Current Strategies
p g
4. Competitors future objectives/ Plans

Compare with Yourself

Plan Accordingly
 Idea Generation
Idea Generation

Feasibility Study
Feasibility Study

Business Plan
Business Plan

Final Project Report(s)
 What is a Feasibility Study?

• A feasibility study is an analysis of the viability of an IDEA through a disciplined and 
documented process of thinking through the idea from its logical beginning to its 
logical end.

• A feasibility study provides an INVESTIGATING function that helps answer “Should 
we proceed with the proposed project idea? Is it a viable business venture?”
we proceed with the proposed project idea? Is it a viable business venture?

• A feasibility study should be conducted to determine   the viability of an idea 
BEFORE proceeding with the development of a business.
d h h d l f b
 What is a Business Plan?

• A Business Plan summarizes the PLAN OF ACTION
A B i Pl i th PLAN OF ACTION after a course of action 
ft f ti
has been determined through the ‘Feasibility Study’
• A Business Plan provides a Planning function
• A Business Plan outlines the actions needed to take the proposal from 
“idea” to “reality” 
• y
A Business Plan tells How your business will be created and Why it will be 
y
successful
• A Business Plan provides a road map for strategic planning
 Why do a Feasibility Study?

• Provide a thorough examination of all issues and assessment of probability of 
b i
business success
• Give focus to the project and outline alternatives
• Narrow business alternatives
• Surface new opportunities through the investigative process
f h h h
• Identify reasons NOT to proceed
• Enhance the probability of success by addressing and mitigating factors early on 
th t
that could affect the project
ld ff t th j t
• Provide quality information for decision making
• Help to increase investment in the company
• Provide documentation that the business venture was thoroughly investigated
• Help in securing funding from lending institutions and other monetary sources
 What is included in a Feasibility Study Report?

A feasibility study report should be completed in all respective manners, 
containing detailed analysis of all best possible factors on date.
– Operational Feasibility
• “Will it work?” how?
– Technical Feasibility
Technical Feasibility
• “Can it be built?” how?
– Marketing Feasibility
• “Can
Can we market the product?
we market the product?” how?
how?
– Economic Feasibility
• Will it make economic sense if it works and is built?” how?
• “ Will it generate profits?” how?
– Financial Feasibility
• “How to arrange required fund?
 Feasibility Study Vs. Business Plan

• Feasibility study (after idea generation) answers the bottom line question—Is this 
venture going to make money?
i k ?
• Feasibility study outlines and analyzes several alternatives or methods of achieving 
business success.
• Feasibility study is conducted before a business plan.

• Business plan is prepared only after the venture has been deemed to be feasible.
• Business plan deals with only one alternative or scenario that is determined to be the 
usiness plan deals with only one alternative or scenario that is determined to be the
“best” alternative.
• Business plan considers the management side—goals and objectives of the planned 
business venture.
 What type of organization you need
(Small Business)
(Small Business)

Solo Proprietorship  One Person Company (OPC)

Partnership Limited liability partnership (LLP)

Private Limited Company

Section 8 Company

Public Limited Company

Public Limited Company

Non Government Organization (NGO)

www.mca.gov.in
i

58
 Proprietorship Partnership Private Limited

Registration May or May not May or May not be Must be registered

be Indian Partnership Act Indian Companies Act –
Shop Act 1932; Registrar of firm and 1956/ 2013
(ROC in case chit (Dy Registrar) Registrar of companies
OPC) (ROC in case of LLP)
Proprietor/ 1 2 - 10 (Banking) 2 - 200 (Private Limited)
Directors (OPC, 1 Nominee; 2 - 20 (Others) 7-onwards (Public
Max 15 directors) Limited)
Capital Owned Contributed on mutual Shares with legal
bases formalities

Liability Personal Liability Unlimited Liability Limited liability

(OPC, Liability i.e. Personally liability
Specified) cept LLP
Except
Audit Not necessary if annual Legal necessity
sales doesnot exceeds Rs
60 lacs
Windup Anytime Anytime by any of the It has legal formalities
(OPC, legal partner
formalities) (LLP, legal formalities)
59
Steps to Incorporate a company
Steps to Incorporate a company

1. Obtain Director Identification Number [DIN] (or DPIN) for the proposed director(s). 

2. Obtain Digital Signature Certificate [DSC] for the proposed Director(s). 

3. Select suitable Company Name, and make an application to the Ministry of 
Corporate Office for availability of name.
Corporate Office for availability of name.

4. Draft Memorandum of Association and Articles of Association [MOA & AOA].

5 Si
5. Sign and file various documents including MOA & AOA with the Registrar of 
d fil i d t i l di MOA & AOA ith th R i t f
Companies electronically.

6. Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
y q y p p y

7. Scrutiny of documents at Registrar of Companies [ROC].

8 Receipt of Certificate of Registration/Incorporation from ROC.
8. Receipt of Certificate of Registration/Incorporation from ROC

60
Registration fee (ROC + Professional Fees) Approx. OPC

DIRECTOR IDENTIFICATION NUMBER (DIN) (DIR 3) 500
DIGITAL SIGNATURE (DSC) 1250
NAME APPROVAL (INC 1) 1000
MOA, AOA & COMPANY INCORPORATION  4200
(INC 2 INC 22 DIR 12)
(INC 2, INC 22, DIR 12)
STAMP DUTY 1010
PAN & TAN 300

Total ROC Fees
l 8260
Professional Fees (approximately) 3000

Grand Total Approx
pp 11000/‐
/

For LLP Approx 14000/‐

For Pvt. Ltd. Approx  17000/‐

61
 Steps to follow

1. Acquire DSC
1 Acquire DSC
2. Acquire DIN or DPIN
3. Register DSC with ROC/ Company
4. Think about company’s name
5. Check Name Availability (in master data of companies)
6. Apply for Approval of company’s name (Electronically)
7. Download Company’s registration Forms
8. File Electronically
File Electronically
9. Track Status
10. Receive Certificate
11. Company is ready to function

62
 Discussion in the classroom (important)

1 Difference between Proprietorship firm and OPC
1. Difference between Proprietorship firm and OPC

2. Difference between Partnership firm and LLP
 How to Start?

1. Space (address)
1 Space (address)
2. Registration of company (and others; as required)
3. Opening of a bank account (Current Account)
4. Stationary (including visiting cards, letterhead etc.)
5. Furniture (as tables, chairs, almirah etc.)
6. Man Power (as required)
7. Inventory (as required)
8 Workshop (as required)
8. Workshop (as required)
9. Packaging materials (as required)
10. Marketing
11. Logistics (as required)
12. Financials

Fund requirement (any time): May be 1) Owned, 2) Bank loan and/or 3) Venture Capitalist.
Fund requirement (any time): May be 1) Owned, 2) Bank loan and/or 3) Venture Capitalist.

64
Legal requirements of establishment of a new unit

Discussion in the Classroom
 Unit 3

Fi
Financial Resources, rising of funds and documentation required.
i lR i i ff d dd i i d

Project financing: fixed and working capital requirements

securities market, venture capital 

Equity financing, debt financing, banks and financial institutions and 
Equity financing, debt financing, banks and financial institutions and
other non‐bank financial sources

Government programmes, direct loan assistance and subsidies.
p g
 Arrangement of fund

1. Promoters (Equity)

2. VC (Venture Capitalist)

3 Loan
3.

a. MUDRA (Micro Units Development & Refinance Agency Ltd.) 
(www mudra org in) under Pradhan Mantri Mudra Yojana (PMMY)
(www.mudra.org.in) under Pradhan
b. PMEGY (www.kviconline.gov.in/pmegp)
c. Normal Business loan

4. Seed Money
a. Grant
b. Soft loan

67
 Venture Capitalist

VC: Advantages  (Entrepreneur’s point of view)

• No fixed expense of debt servicing
• Financial flexibility
• Sharing of risk
• Value added investing
– Attracting talent
A i l
– Networking with service providers/suppliers
– Accessing markets
• Enhanced credibility with lenders
Enhanced credibility with lenders

VC: Disadvantages (Entrepreneur’s point of view)
g ( p p )

• Dilution of shareholding
• Increased 3rd party governance
p yg
• Increased controls
• Increased commitment to stated strategy 68
 Financial Institutes/ Banks

How banks cover risks?

– Collateral (Security/ Guarantee)
Collateral (Security/ Guarantee)
– Personal guarantees
– Debt covenants (Agreement/ Contract)
– Short maturity debt
Short maturity debt

Managing Banks

– Complete paperwork in time 
– Submit financial statements as scheduled
– Route all transactions through bank
Route all transactions through bank
– Ask for extras – free drafts, alerts, etc
– Exude confidence and well being
– T
Transmit good news
it d
– Be proactive about inspections
69
 Pradhan Mantri Mudra Yojana (PMMY)
(www.mudra.org.in)

Mudra ‐ Micro Units Development & Refinance Agency Ltd.

Shishu
Shi h : covering loans upto
i l t 50,000/‐
50 000/
Kishor : covering loans above 50,000/‐ and upto 5 lakh
Tarun : covering loans above 5 lakh and upto 10 lakh

Note: It would be ensured that at least 60% of the credit flows to Shishu Category Units 
and the balance to Kishor and Tarun Categories.

Under specific schemes

Under specific schemes

1. Sector / activity specific schemes
2. Micro Credit Scheme (MCS)
3. Refinance Scheme for Regional Rural Banks (RRBs) / Scheduled Co‐operative Banks
4. Mahila Uddyami Scheme
5. Business Loan for Traders & Shopkeepers
6
6. Missing Middle Credit Scheme
Missing Middle Credit Scheme
7. Equipment Finance for Micro Units
70
R
Requirements
i t

1. Adhar Card
2. Pan Card
3. Bank account with at‐least six months running
4. EDP Course certificate (minimum 2 weeks)
5. No Project requirement for Shishu
6
6. Margin money is zero with Shishu and 20 % with others
Margin money is zero with Shishu and 20 % with others

Features

1. No Collaterals
2. Less paper work
3. Loan through Government banks
4
4. Task Force – NIESBUD
Task Force 
5. Report may be forwarded through neisbud
6. Interest rate 11 to 12 % (Max. 12 %)
7. Rs. 20000 Cr corpus (total)
8. Rs. 3000Cr allotted by SIDBI

71
MUDRA Card
1. Going forward, MUDRA would look at improving the offerings basket by looking at 
Going forward, MUDRA would look at improving the offerings basket by looking at
innovative ideas like a pre‐loaded MUDRA Card, say with an assessed value.
2. The card offering will help provide pre‐approved credit line to the members by 
providing a card that can be utilized to purchase raw materials and components, 
f
from registered producers on an online platform.
it d d li l tf
3. The card could be linked with Pradhan Mantri Jan Dhan Yojana Savings Account of 
the borrower and the drawals could also be enabled through the Bank’s ATM 
network for meeting the immediate liquidity problems of the micro enterprise.
g q yp p

72
It is
i in
i this
thi backdrop
b kd th t Government
that G t off India
I di (GoI)
(G I) is
i setting
tti up a Micro
Mi U it
Units
Development & Refinance Agency (MUDRA) Bank through a statutory enactment. This
Agency would be responsible for developing and refinancing all Micro‐finance
Institutions ((MFIs)) which are in the business of lendingg to micro / small business
entities engaged in manufacturing, trading and service activities. The Bank would
partner with state level / regional level co‐ordinators to provide finance to Last Mile
Financiers of small / micro business enterprises.

Since the enactment is likely to take some time, it is proposed to initiate MUDRA as a
unit of SIDBI to benefit from SIDBI’s initiatives and expertise.

National Toll free numbers

1800 180 1111 
1800 11 0001

73
Project Report Preparation
Contents of a Project Report

Covering Page
g g
Contents

• PROJECT AT A GLANCE, PROJECT COST AND MEANS OF FINANCING 
• NATURE OF PROJECT
NATURE OF PROJECT 
• PAST EXPERIENCE AND BACKGROUND OF THE PROMOTER 
• QUALITY STANDARDS 
• MARKET PROSPECTS AND TIE UPS 
• RAW MATERIALS, MANPOWER AND UTILITIES 
• DETAILS OF LAND COST 
• DETAILS OF BUILDING COVERING AREA AND ITS COST 
• DETAILS OF EXISTING AND PROPOSED MACHINERY
DETAILS OF EXISTING AND PROPOSED MACHINERY 
• MANUFACTURING PROCESS 
• PROCESS FLOW CHART 
• IMPLEMENTATION SCHEDULE 
• BREAK EVEN POINT
• PROFITABILITY STATEMENTS 
• STATEMENT OF IMMOVABLE AND MOVABLE PROPERTIES OF 
PROMOTERS 
PROMOTERS

Notes
75
1. PROJECT AT A GLANCE, PROJECT COST AND MEANS OF FINANCING

1. Name of the Promoter : You
2. Qualification of the Promoter :  B.E./ MBA or any program
3. Name of Proposed Unit : XYZ Electronics Private Limited
4 Corresponding Address
4. Corresponding Address : : ******** Greater Noida
Greater Noida
5. Telephone Numbers : (0120) *******
6. Constitution : Proposed Private Limited
7. Products to be manufactured  :  Electronic Educational Kits
Research‐based Electronics Goods
Power Sensing and Controlling Equipments
8. Capital Cost of Project : (in Lacs)

Land : 9.00
Building : 8.50
Machinery : 4 00
4.00
Other Fixed Assets : 1.50
Capital Cost : 23.00
Working Capital Reqd.: 2.80

Total Cost of Project : 25.80
76
9. Means of Financing (in lacs)

Promoter’s Capital
P ’ C i l : 09.80
09 80
Long term Loan : 14.00
Short term Loan : 02.00

D b E i R i
Debt Equity Ratio : 1 63 1
1.63:1

Total amount : 25.80

10. Details of Working Capital Reqd.

P ti l
Particulars P i d (i d )
Period (in days) A
Amount (in Rs.)
t (i R )

Raw Materials & Consumable  60 2,04,000.00
Monthly Wages and Salaries 30 46,000.00
P
Power and Fuel (Power Bill)
d F l (P Bill) 30 5150 00
5150.00
Monthly Repairs & Maintenance 30 3000.00
Monthly Administrative Exps 30 10,000.00
Other Misc. Expenses 30 10,500.00
T t l
Total amount:
t 2 78 650 00
2,78,650.00

Say Rs. 2.80 lacs.
77
2. NATURE OF PROJECT

Electronic Educational Kits

(write‐up)

Research‐based Electronics Goods

(write‐up)

Power Sensing and Controlling Equipments

(write‐up)

78
3. PAST EXPERIENCE AND BACKGROUND OF THE PROMOTER
(
(details of all the promoters)
p )

Name of the Promoter :
Aadhaar Card Number :
Father’s Name : 
Residential Address : 
Telephone Numbers : 
Fax Number : 
Email ID : 
Qualification :
Institution Membership :
p
Experience :
Future Plans :
79
4. QUALITY STANDARDS

5. MARKET PROSPECTS AND TIE UPS

5. MARKET PROSPECTS AND TIE UPS

6. RAW MATERIALS, MANPOWER AND UTILITIES

6.1 Raw Materials

The basic materials required in manufacturing these electronics items are as follows,

Various ICs
Diodes, Transistors, MOSFETs, SCRs
Passive components like resister, capacitor and inductors.
Coke coils wires buses
Coke, coils, wires, buses
Display driver, screen and units
Relays, Division multipliers, Slope and Slab detectors
Heat sinks, temperature, pressure controllers
, p ,p
Soldering tin and flux
Amplifiers, speakers, paper walls and timers
Piezo, Quartzes, vibrator and oscillators
Metallic and Wooden Cabinet

All these items are generally readily available in the market. 80
6.2 Manpower Requirements

Duties Admin. (Nos) Technical Total monthly Annual Salary/

(Nos) Salary (Rs) Wages (Rs)
Managerial 01 -- 8000 96,000
S
Supervisory
i -- 02 4500 1 08 000
1,08,000
Skilled 01 03 2500 1,20,000
Semi Skilled 01 01 2200 52,800
Unskilled 02 -- 1600 38 400
38,400
Total Rs. 4,15,200
Add benefits @ 33% of Total Rs. 1,37,016
Grand Total for Salary
y & Wages
g (with benefits)
( ) in Rs. 5,52,216
, ,

6.3 Utilities

Power

The firm shall be running a power load of 6 kW (7.5 HP) through U.P.P.C.L. 
The firm shall purchase a Generator set as a stand by arrangement.
Water

Drinking water is required only for day to day consumption. 
Keeping in view of the employment on an average 5‐6 Kl water on monthly basis would be required.
81
7. DETAILS OF LAND COST

Financial aspects for 200 Sq. meters.

Financial aspects for 200 Sq. meters.

Particulars Total Area of PlotRate Amount (Rs.)

( )

200 Sq.m. 200 4000 8,00,000.00

Add registration charges @12.5 % 1,00,000.00

Add th
Add other charges
h 2000 00
2000.00

Total 9,02,000.00

Say 9.0 lacs.
82
 8. DETAILS OF BUILDING COVERING AREA AND ITS COST

Particulars Nature of Total Covered Rate (per

p Amount
construction Area (60%) sq.mtr) (in Rs.)
Ground Floor (120 Sq.mtr.)
Working hall First Class brick work 90.00 3000.00 2,70,000.00
with cement, mortar,
Raw Material RCC roofing,
roofing Column,
Column 15 00
15.00 3000 00
3000.00 45 000 00
45,000.00
Store Plain roofing wall
plaster, Iron doors and
Finished Goods Windows 15.00 3000.00 45,000.00
Store
First Floor (100 Sq.mtrs)
Administrative Same as Ground Floor 50.00 2800.00 1,40,000.00
Office
Packing 50.00 2800.00 1,40,000.00
Department
Second Floor (50 Sq.mtrs)
Tool Room Second Class 15.00 2200.00 33,000.00
Construction
Toilet 10.00 2200.00 22,000.00
G
Guard
d Room 30 00
30.00 2200 00
2200.00 44,000.00
000 00
Total 7,39,000.00

Boundary Wall Simple Construction

1,00,000.00
Main Gate Iron fabricated 10,000.00
Grand Total 8,49,000.00
83
Depreciation @10 % = Rs. 85,000.00
9. DETAILS OF EXISTING AND PROPOSED MACHINERY

9.1 Proposed Machinery

Particulars Qty. Rate Amount (in Rs.)

(in Nos.)

p
Computer (
(for DTP)
) 01 15,000
, 15,000
,

Computer (for Designing) 02 25,000 50,000

PLC unit 01 90,000 90,000
Software for designing
g g((CADD)
) 01 1,60000
, 1,60000
,
CRO, dual trace (for Waveform) 01 17,000 17,000
Frequency Generator 02 5,000 10,000
Sinusoidal, Square, Triangular

Transformer winding machine 01 12,000 12,000

and complete unit

PCB Unit, UV machine, dryer, 01 40,000 40,000

etcher, driller
Soldering,
Solde ing pasting and testing as required
eq i ed 5 000
5,000 5 000
5,000
equipments
Boxes and other necessities as required 5,000 5,000
Total 4,04,000

Depreciation @ 15 % = Rs. 60,000.00

84
9.2 Other Assets

Particulars Amount (in Rs.)

Fire Fighting System 20,000
F
Furniture
it and
d Fixtures
Fi t 50 000
50,000
Electric Fitting 30,000
Generator 50,000
Total 1,50,000

Depreciation @ 10 % = Rs. 15,000.00

10. MANUFACTURING PROCESS

85
11. PROCESS FLOW CHART

Technical feasibility test of the required product, Preparation of desired

equipment over computer and finding the result on computer screen

D i d
Desired 
Results are 
No found
Yes

Required parameters, Negative of required PCB, components list and its

specifications be generated through computer

Preparation of desired designed Transformer, Control Panel, Printed Circuit

boards

Arranging and then mounting the above items and other required
components at respective places of board and supports

Soldering, Wiring and Pasting

System testing, along with load, line voltage, current regulation etc

Packing with Care, Labeling and Storing

86
 12. IMPLEMENTATION SCHEDULE

Activity Start Finish

Possession of Land after execution
of legal documents 0th Week 3rd Week

Commencement & Completion of
Building construction
Building construction 7th Week
7th Week 40th Week
40th Week

Plant & Machinery and its Delivery
(New) 38th Week 40th Week

Commencement of trail to commercial
Commencement of trail to commercial
Production 41st Week 44th Week
87
 13. Break Even Point

Installed Capacity: is the Maximum capacity of the Plant (Units of production)
Installed Capacity: is the Maximum capacity of the Plant (Units of production)
Capacity Utilized i.e. Utilized capacity: actually produced in particular time frame.

Note:
a) If Installed capacity is 100 %  (say), utilized capacity is x % (varying each month)
b) Utilized capacity depends upon BEP
c) BEP is shown in percentage of capacity utilized
d) High BEP means high risk
High BEP means high risk
e) Ideal BEP is between 20 to 30 percentage
A general perception I II III IV V
C
Capacity
i Installed
I ll d 50000 50000 50000 50000 50000
Capacity Utilized 65 % 70 % 80 % 85 % 90 %
Profit 3.0 % 3.5 % 4.5 % 5.0 % 5.5 %

Important Note:
a) If Profit is in negative, business is in loss.
b)) If Profit is ZERO, Capacity Utilization in known as BEP
p y
c) Entrepreneur and banker both want to get BEP at earliest utilization therefore
d) If BEP (as explained above) is less, business is less risky.
88
14. PROFITABILITY STATEMENTS
Amount (in Lacs)

Annual Sales 36 00
36.00
(of various kits, equipments and units)
An avg. of Rs. 3 lacs per month.

Less: Cost of production

Raw Materials 12.24
12 24
Power 00.62
Wages 05.53
Repairs & Maintenance 00.36
Other Administrative Exps. 01.20
Oth Mi
Other Misc. Exps.
E 01 25
01.25

Total cost of production 21.20

Gross Profit: 14.80

L
Less: Administrative,
Ad i i t ti Selling
S lli & Fi
Financial
i l Exps
E
Interest on term loans (75%) 01.40
Interest on W.C. loan 00.25
Total: 01.65
Less: Depreciation
F t
Factory Building
B ildi (10%) 00.85
00 85
Plant & Machinery (15%) 00.60
Other Assets (10%) 00.15
Total 01.60
Profit Before Taxation 10.75
Provision for Taxation 04.25
Profit after tax 06.50
Drawing 02.00
Retained Profits 04.50 89
15. STATEMENT OF IMMOVABLE AND MOVABLE PROPERTIES OF PROMOTERS

(Your Net Worth,

Worth Promoter (s) of the unit)

Market Value
(in Lacs)
Immovable Assets

1. Properties

Movable Assets

1. Bank
k Balance
l and
d FDRs

2. Personal Assets

3. Vehicles (Cars)

Loans

If any

Net Worth
90
Other Projects included in the Project Report
Other Projects included in the Project Report

1. Working Capital

2. Fund Flow Statement

3 Balance Sheet
3. Balance Sheet

4. Ratios

91
 Working Capital

01/04/16 10/04/16 10/05/16

Manufacturing Start Material Dispatched Money Received

40 days
First 10 days Within 40 days
a)) Raw material
R
b) Transport
t i l
+ a)) Wages
W
b) Electricity/ water bills
c) Daily expenses etc. c) Interest etc.

Now, say working capital required is Rs.  5 lacs (0.50 equity  + 4.50 debt)
Rs. 4.5 lacs is taken from bank with 14 % interest rate
Amount is deposited with CC (Cash Credit account), cash credit limit 4.5 lacs

When the amount will be deposited and if amount is higher than 4.5 lacs, extra 
account will be transferred to the current account.

CC Limit may be increased or decrease depending upon the performance.
92
 Cash flow statement (Previously fund flow statement)

Fund flow may include non‐cash items, whereas, cash flow only has 
cash items.
Cash flow includes cash inflows and outflows 
Cash flow includes cash inflows and outflows – cash receipts and 
cash receipts and
cash payments during a period.
A cash flow statement is a statement which portrays the changes in 
cash position between two accounting periods
cash position between two accounting periods.
It helps in taking short term financial decisions and also in the 
preparation of cash budget for the next year.

Just about inflow, outflow and net surplus.

93
Fixed and Working Capital
 Capital—Fixed, Working

Fixed Working Capital

Plot Raw Materials & Consumable

Plant Monthly wages and salaries

Building Power and Fuel

Machinery Monthly Repairs and Maintenance

Fixed Assets Monthly Administrative Expenses

Other Misc. Other Misc. Expenses
h i
 Working Capital

01/04/16 10/04/16 10/05/16

Manufacturing Start Material Dispatched Money Received

40 days
First 10 days Within 40 days
a)) Raw material
R
b) Transport
t i l
+ a)) Wages
W
b) Electricity/ water bills
c) Daily expenses etc. c) Interest etc.

Now, say working capital required is Rs.  5 lacs (0.50 equity  + 4.50 debt)
Rs. 4.5 lacs is taken from bank with 14 % interest rate
Amount is deposited with CC (Cash Credit account), cash credit limit 4.5 lacs

When the amount will be deposited and if amount is higher than 4.5 lacs, extra 
account will be transferred to the current account.

CC Limit may be increased or decrease depending upon the performance.
96
 Unit 4

Managing Growth and Transition: the organization life cycle; The 
M i G h dT ii h i i lif l Th
entrepreneurs perspective, changing roles. 

Entrepreneurial Development Programmes (EDP): EDP, their role, 
Entrepreneurial Development Programmes (EDP): EDP their role
relevance and achievements

Role of government in organizing EDP’ss critical evaluation

Role of government in organizing EDP critical evaluation
 Product Life Cycle (PLC)

Commercialization stage PLC

Commercialization stage PLC
Revenue/ Profit

Time/ Qty
Introduction Growth Maturity Decline

98
 Organization Life Cycle

1. Old Organization Design Vs New Organization Design
1 Old Organization Design Vs New Organization Design
2. Organizational Life Cycle
3. Other linked life cycles
 St t
Structure Characteristics of Modern Corporation
Ch t i ti fM d C ti

(Note that these are also dependent upon type of industries/ product)

S. No. Old Organization Design New Organization Design

1 O l
One large Corporation
C i M l i Business Corporation
Multi B i C i
2 Vertical Communication Horizontal Communication
3 Centralized Decision Making Decentralized
4 Vertical Communication Out Sourcing
5 Work Quality Team Autonomous Work Team
6 Functional Work Team
Work Team Cross Functional
Cross Functional
7 Minimal Training Extensive Training
8 Individual Focused Value Chain Focused
 Organizational Life Cycle
Structure

Stage Stage Stage Stage Stage

I II III IV V

Time
 Organizational Life Cycle

Birth Growth Maturity Decline Death

Niche Horizontal Concentric & Profit Liquidation

& Vertical Conglomerate
Entrepreneur
p Functional Entrepreneur
p Structure Dismemberment
Dominated Management Dominated Surgery of Structure
 Challenges and Success
g

Concept of 

Sense | Scanning | Positioning | Analyzing
| | |
(Ability/Time/Chance)
 Entrepreneurship Development Agencies (EDA) in India

Entrepreneurship Development Institute of India (EDII)
www.ediindia.org

National Small Industries Corporation
www.nsic.co.in

National Institute For Entrepreneurship and Small Business Development
www.niesbud.nic.in

Indian Institute of Entrepreneurship
www.iie.nic.in

National Institute of MSME
www.nimsme.org

The National Science & Technology Entrepreneurship Development Board

www.nstedb.com
 Other Government Agencies (at state level) engaged in ‘entrepreneurship development’

a. IInstitute of Entrepreneurship Development (UP) A 1 & 2 Sarojini
tit t f E t hi D l t (UP) A 1 & 2 S ji i Nagar, Industrial Area, Kanpur 
N I d t i lA K
Road, Lucknow‐226008 (UP)
b. Centre for Entrepreneurship Development of Karnataka, "West View" UB Hills, Near D.C. office, 
Dharward‐580007
c. Maharashtra Centre for Entrepreneurship Development A‐38, MIDC near Railway Station 
Aurangabad‐431005
d. Centre for Entrepreneurship Development, 60 Jail Road, Jahangirabad, Bhopal‐462008
e. Institute of Entrepreneurship Development, IEDO, Plot No. 123, Sector‐A, Zone‐A, Mancheswar
p p p , , , , ,
Industrial Estate (near Postal Printing Press) Bhubneswar‐751010 Orissa
f. Kerala Industrial & Technical Consultancy organisation Ltd., P.B. No. 1820, Ravipuram, M.G. 
Road, Cochin‐682016
g H.P.C.E.D., Udyog
g. H P C E D Udyog Bhawan, Bemloe, Shimla
Bhawan Bemloe Shimla‐171001 171001
h. Centre for Entrepreneurs Development, CED SIPPO Campus No. 4, T.B. Road, Madurai‐625010
i. Haryana Institute of Public Administration, 76, HIPA Complex, Sector‐18 Gurgaon‐122001
j. Entrepreneurship and Management Laboratory Building, 22 Godown, Industrial Area‐1 Jaipur‐
302019
k. CED an undertaking of Association Andhra Pradesh, 3‐5‐1091/15 Narayanaguda, Hyderabad‐
500029
l. J&K Entrepreneurship Development Institute (J&K, EDI) O/o Directorate of Industries & 
Commerce, Exhibition Ground, Residency Road, J & K Govt. Jammu/ Srinagar
/
m. IED Bihar, B.S.F.C. Building, 5th floor, Fraser Road, P.B. No. 114, PATNA‐800 001
Source: http://www.dcmsme.gov.in/schemes/list_edi.htm
Government: Incentives, Subsidies, 
Grants EOU Fiscal and Tax
Grants, EOU, Fiscal and Tax 
Concessions

Role of Start‐up India initiative
www.startupindia.gov.in

Discussion in the classroom

Discussion in the classroom
 Start up INDIA

Prime Minister Narendra
P i Mi i t N d Modi
M di with Commerce and Industry Minister Nirmala
ith C d I d t Mi i t Ni l Sitharaman
Sith
launching the “Startup India” action plan at Vigyan Bhawan in New Delhi on January 16, 2016. 
107
Prime Minister Narendra Modi has kicked off the ambitious Startup India 
Movement. The government programme aims to fill gaps in the economy for 
the growth and development of startups and will aim to boost digital 
g p p g
entrepreneurship at the grassroots. The government is expected to earmark 
around Rs 2,000 crore for the initiative.

On January 16, Prime Minister Narendra
O J 16 P i Mi i t N d Modi
M di unveiled a 17‐point action plan 
il d 17 i t ti l
for start‐up enterprises in India. He also announced a self‐certification scheme 
related to nine labour and environment laws. He also said that there would be 
no inspection of the enterprises during the first three years of the launch.

Modi has announced an all‐inclusive action plan to boost such ventures that 
would boost employment generation and wealth creation.

17 plans has for start‐ups

108
1. Self certification
To reduce the regulatory burden for startups, the government will allow startups to 
self‐certify compliance on nine labour and environment laws through the startup 
mobile app. No inspections will be conducted in case of the labour laws for a 
period of three years. 

2. Start‐up India hub
An all‐India hub will be created as a single contact point for start‐up foundations in 
India, which will help the entrepreneurs to exchange knowledge and access 
fi
financial aid.
i l id

3. A single point of registration for startups (Register through apps)
An online portal, in the shape of a mobile application, will be launched to help 
p , p pp , p
start‐up founders to easily register. The app is scheduled to be launched on April 1 
2016.

109
4. Legal support including patent protection

A panel of facilitators will provide legal support and assistance in submitting patent 
applications and other official documents
applications and other official documents.
Launched on a pilot basis for a year, the Central Government shall bear the cost of 
patents, trademarks and designs for a startup, with an 80 percent rebate to 
encourage the creation and protection of its intellectual property. The system will 
promote awareness and adoption of the Intellectual Property Rights (IPRs) by the 
f ( )
start‐up foundations.

5. Rs 10,000 crore
5. Rs 0,000 crore fund

The government will develop a fund with an initial corpus of Rs 2,500 crore and a 
total corpus of Rs 10,000 crore over four years, to support upcoming start‐up 
enterprises. The Life Insurance Corporation of India will play a major role in 
t i Th Lif I C ti f I di ill l j l i
developing this corpus. A committee of private professionals selected from the 
start‐up industry will manage the fund.

110
6. National Credit Guarantee Trust Company
A National Credit Guarantee Trust Company (NCGTC) with SIDBI is being 
conceptualized with a budget of Rs 500 crore per year for the next four 
years to support the flow of funds to start‐ups.

7. No Capital Gains Tax
At present investments by venture capital funds are exempt from the
At present, investments by venture capital funds are exempt from the 
Capital Gains Tax. The same policy is being implemented on primary‐level 
investments in start‐ups.

8. No Income Tax for three years
f h
Start‐ups would not pay Income Tax for three years. This policy would 
revolutionize the pace with which start‐ups would grow in the future.

9. Tax exemption for investments of higher value
In case of an investment of higher value than the market price, it will be 
exempt from paying tax

111
10. Atal Innovation Mission
The Atal Innovation Mission will be launched to boost innovation and encourage 
talented youths.

11. Building entrepreneurs
Innovation‐related study plans for students in over 5 lakh schools. Besides, there 
will also be an annual incubator grand challenge to develop world class 
incubators.

12. Dedicated programmes in schools
The government will introduce innovation related programems for students in 
The government will introduce innovation‐related programems for students in
over 5 lakh schools.

13. Setting up incubators
A private‐public partnership model is being considered for 35 new incubators 
and 31 innovation centres at national institutes.

112
14. Research parks
The government plans to set up seven new research parks, including six in the 
g p p p , g
Indian Institute of Technology campuses and one in the Indian Institute of Science 
campus, with an investment of Rs 100 crore each.

15. Entrepreneurship in biotechnology
15 Entrepreneurship in biotechnology
The government will further establish five new biotech clusters, 50 new bio 
incubators, 150 technology transfer offices and 20 bio‐connect offices in the 
country.

16. Easy rules
Norms of public procurement and rules of trading have been simplified for the 
start‐ups.
start‐ups

17. Faster exit
If a start‐up fails, the government will also assist the entrepreneurs to find suitable 
solutions for their problems. If they fail again, the government will provide an easy 
way out. Startups may be wound up within a period of 90 days from making of an 
application for winding up on a fast track basis, as per the recently tabled 
Insolvency and Bankruptcy Bill 2015, which has provisions for voluntary closure of
Insolvency and Bankruptcy Bill 2015, which has provisions for voluntary closure of 
businesses. This process will respect the concept of limited liability.
113
 What is EDP?

Why EDP?

EDP: Entrepreneurship Development Program

114
 Methodology and Strategies

1. Selection of the trainees
2.. Understanding their level
Understanding their level
3. Designing of EDP(s)
4. VMO Values Strategies Policies and Plan
5
5. Hand holding support
Hand holding support
6. Workshop on functional modules
7. Regular discussion (may be through e‐cell, BI or vBI)

115
 Designing EDP (Entrepreneurship Development Program)

Depends upon attendees

In General up to Five days

In General up to Five days

Contents

Who are Entrepreneur, What is Entrepreneurship
How to develop business Idea
Incorporation of a Company or Enterprise
Business Plan and/or Project Report Preparation
Time, Network and Stress Management
Operational and Supply Chain Management
Marketing, Human Resource, Finance Management
Government Policies
Role of Banks and Venture Capitalist

Mainly all those topics which help an entrepreneur to Work
 Designing a two days EDP (Example)

1. Introduction
2 Purpose of the Workshop
2. Purpose of the Workshop
3. Objectives
4. Contents of first day
5. Activities in the first day
6. Contents of second day
7. Activities of second day
8. Requirement to conduct workshop
9 Post workshop benefits
9. Post workshop benefits
10. Details of previous workshops conducted
11. Resource Persons
12. Contact details

Discussion in the classroom (refer next two slides for point 4, 5, 6 and 7)
 Title/ Activity Session Timings Description
Session 1
Session 1 10:15 – 11:30
10:15  Why to go for entrepreneurship/start
entrepreneurship/start‐up,
up, Concept of
Entrepreneurship entrepreneur, entrepreneurship, Team of an
entrepreneur, Qualities and Characteristics at different
levels, Motivation, Thinking Process of an
Entrepreneur. Focused and Entrepreneurial Thinking,
1 (First Half)

Creativity, Innovation, Development of Business Idea.

11:30 – 11:45 Questions and Answers round
Session 2
Session 2 12:00 – 01:15
12:00 – SMART Goals,
Goals VMO and Strategies,
Strategies Seven points
Day 1

How to begin I viability, Fundamental keys of business success, New

Product Development with business cycle.
Entrepreneurial Opportunity recognition. Requirement
for EOR (Network‐Time‐Stress Management).
01:15 – 01:30 Questions and Answers round
02:15 – 03:15 Discussion on Start‐up India and Make in India in
Day 1 (Second halff)

Session 3
Session 3
details.
Brain Storming I
(Discussion within the session)
Activity 1 03:15 – 03:30 Explanation of the Activity
Achievement
Achievement  03:30 – 04:00
03:30  Demonstration of the activity with 15 to 25 volunteer
Planning/  participants.
Discussion OR Discussion on participants business ideas
 Title/ Activity Session  Description
Timings
SSession 4
i 4 10 00 11:30
10:00 – 11 30 Wh
Whatt kind
ki d off organization
i ti you need,
d Formalities
F liti for
f
How to begin II registration, Legal requirements, Various functions of a
start‐up venture. How to Start? Loans and Venture
Daay 2 (First Haalf)

capitalist, Loan benefits from the Government (MUDRA,

PMEGP, SIDBI).
11:30 – 11:45 Questions and Answers round
Session 5 12:00 – 01:15 Preparation of Business Plan. Explanation of all its
B i
Business Plan
Pl contents.
t t P
Presentation
t ti preparation.
ti P j t Report
Project R t
Preparation for a) Land acquisition and b) Business loan.
(Explaining all the headings of the Business Plan)
01:15 – 01:30 Questions and Answers round
01:15
Session 6 02:15 – 03:15 Discussion of participants inquiry after session 1 to 5
Brain Storming II
d half)

Activity 2 03:15 – 03:30 Explanation of the Activity

Daay 2 (Second

Entrepreneurship  03:30 – 04:00 Activity to be done among all the participants.

Status in YOU! (Entrepreneurship skills and status in YOU! is a test
involving many factors, which evaluates – how much
ready you are? As a budding entrepreneur for a new
start‐up venture.)
And winding‐up of the workshop
 Thanks A lot
h k l

Slides prepared and presented by

Dr. V K Arora
Resource Person/ Consultant
Resource Person/ Consultant
Strategic Management, Entrepreneurship and Business Development

Email:  vkarora@manasso.com
Contact Number:  + 91 98 11 59 30 59

120