EM Sem IV

Entrepreneurship Management MMS-Sem IV
Course Content
(A) Entrepreneurial Perspective: Concept of Entrepreneur, Entrepreneurship and Enterprise ; advantages Entrepreneur 1) Nature and Development of Entrepreneurship; Gender Issues in Entrepreneurship. 2) The dynamic role of Small Business Industry in Economic Development 3) Personality of an Entrepreneur! 4) Innovation and Entrepreneurship (B) The Entrepreneurial Environment: 1) Policy Perspectives in India to promote Entrepreneurship 2) Analysis of Business Opportunities in different sectors of economy at National & Global levels. 3) Quick Start Routes to establish an Enterprise (Franchising, Ancilliarising & Acquisitioning) 4) Support Organizations for an Entrepreneur and their Role 5) Legal framework for starting a Business industry in India. (C) The Enterprise Launching : Product/Project Identification , Develop a Project Report/ Business Plan, Business Financing including venture Capital Finance Managing early growth of a Business, Incubation Program, New Venture expansion strategies and issues
Prof Purshottam Patil 2
Reference Text
1. Beyond Entrepreneurship By James C. Collins, William C. Lazier 2. Entrepreneurship Management By P. N. Singh, By J. C. Saboo 3.Dynamics of Entrepreneurship By Vasant Desai 4. Entrepreneurship Development in India By Biswanath Ghosh 5. Literature Published by Support Institutions, Viz i) SIICOM ii) SIDBI iii) MSSIDC iv) NSIC
Prof Purshottam Patil
(A) Entrepreneurial Perspective
Common Themes in Definitions of Entrepreneurship

Process Uniqueness Innovation
Growth
Defining Entrepreneurship
Organization Creation
Profit or Nonprofit Creating Value
Concept : Entrepreneur
Entrepreneur One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.
An entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation, simultaneously creating new products and business models largely responsible for the dynamism of industries and long-run economic growth. Joseph A. Schumpeter, Schumpeter School of Business and Economics, Bergische Universitt, Wuppertal
Most of what you hear about entrepreneurship is all wrong. Its not magic; its not mysterious; and it has nothing to do with genes. Its a discipline and, like any discipline, it can be learned. Peter F. Drucker
Advantages : Entrepreneur
High degree of independencefreedom from constraints oGet to use a variety of skills and talents oFreedom to make decisions oAccountable to only yourself oOpportunity to tackle challenges oFeeling of achievement and pride oPotential for greater financial rewards
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Challenges of Being an Entrepreneur

Must be comfortable with change and uncertainty oMust make a number of decisions oMay face tough economic choices oMust be comfortable with taking risks oNeed many different skills and talents oMust be comfortable with the potential for failure
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Nature and Development of Entrepreneurship

Trends & Reasons for Entrepreneurial Development Entrepreneurs as heroes Entrepreneurial education Demographic and economic factors Shift to a service economy Technological advancements Independent lifestyles E-Commerce and the World Wide Web International opportunities
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The Diversity of Entrepreneurship

Young entrepreneurs Women Minority-owned enterprises Immigrant entrepreneurs Part-time entrepreneurs Home-based businesses Family businesses Corporate dropouts
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Gender Issues: Women Entrepreneurship.
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Women enterprise..
An enterprise owned and controlled by a women having a minimum financial interest of 51% of capital and giving at least 51% of the employment generated by the enterprise to women. -Government of India
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Do you think women entrepreneurship is important for the country ? -Why?
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India & Women Entrepreneurship

National Interest:
When women move forward, the family moves, the village moves and the Nation moves. -Pandit Jawaharlal Nehru
Importance of Women Entrepreneurship

50% of the population traditionally outside the domain of economic activities They must be made part of the economic development, not only to ensure the economic & social development of the women but to provide more resources to strengthen the economy of the country. The economic status of women is now accepted as an indicator of a societys stage of development.
Factors influencing women entrepreneurs

Economic independence Establishing their own creativity Establishing their own identity Achievement of excellence Developing risk-taking ability Equal status in society Greater freedom and mobility
Status of Women Entrepreneurship

Traditionally Women had insignificant role According to official stats 50% of population own & operate less then 5% of economic activity. Their participation is 60% in SSI, 15% in large and rest, 25% in cottage & micro segment. They work primarily in sectors such as trade & services to tailoring, beauty parlors, and printing. Their participation in manufacturing is minimal. However, their contribution is much greater then shown in stats because much of it is in informal sector & household.
Challenges in the path of Women Entrepreneurship The essence of Entrepreneurship requires- the existence of economic opportunity, sympathetic cultural forces, supportive Government action and strong personal values & traits.
It is relatively easier for Women from upper strata to face above challenges. But it is a real challenge to bring the vast majority of disadvantaged into the mainstream of economic activity. Basically it is the familial & social conditioning that reduces the confidence, independence & mobility of women; and Insensitivity to the gender issues that result into problems in the way of Women Entrepreneurs.
Strategies for the development of Women Entrepreneurship

Overcoming family resistance Shouldering dual responsibility & Time Management Education, skills Financial assistance Effective & efficient use of IT Marketing Support Group entrepreneurship Programs and policies taking in to consideration special needs and concerns of Women Mentorship support
Institutions supporting Women Entrepreneurship in India

Consortium of WE in India Federation of Indian women entrepreneurs Federation of Ladies Organization (FLO) Women India Trust Special Schemes by Banks: Cent Kalyani NABARD State Governments Scheme for Development of Women and Children in rural areas SIDBI Self-Employed Womens Association (SEWA)
Some Eminent Women Entrepreneurship

Vidya chabria (ranks 95 on The 100 Most Powerful Women 2006) (Chairperson of Shaw Wallace and other group companies.) Anu aga (Anu Aga (born 1942) is an Indian businesswoman and social worker,
who led Thermax Ltd., figured among the eight richest Indian women, and in 2007 was part of 40 richest Indians by net worth, according to Forbes magazine).
Ritu kumar : Ritu Kumar (born November 11, 1944) is an Indian fashion designer, based in Delhi. Kumar has opened a new flagship store in
North America in The Mall at Oak Tree in Edison, New Jersey.
Priya Paul (Chairperson of Appeejay The Park Hotels chain of boutique hotels) Anuradha Desai: Chairperson, Venkateshwara Hatcheries
Women Organizations Supporting Women Entrepreneurs

Mahila Bunkar Sahakari Samitiu, UP SABAL: Crafting Exports of Indian Handicrafts; www.sabalaindia.com www.indiatogether.org Shri Mahila Griha Udyog Lijjat Papad; www.lijjat.com
The dynamic role of Small Businesses Industry in Economic Development
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The Small Scale Sector

The Small Scale Sector is the natural habitat of entrepreneurs. Most entrepreneurs start small and then nurture their units into large industries. The SSI Sector provides an opportunity for them to hone their skills and talents, to experiment, to innovate and transform their ideas into goods and services needed by the society. Mostly this sector exhibited positive growth trends even during periods when other sectors of the economy experienced either negative or nominal growth.
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Profile of SSI Sector in India

95% of Industrial Units in the Country 39.92% of Value Added in the Manufacturing Sector 34.29% of National Exports 6.86% of Gross Domestic Product Employment To 193 Lakh Persons Production of Over 7500 Items in the Industrial Sector 298 Items Reserved for Exclusive Manufacture 358 Items for Exclusive Purchase from This Sector For every Rs.0.1million of investment, the small-scale sector provides jobs to 26 people as compared to 4 jobs created in the large-scale sector.
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Small Scale Industry

In India the Small Scale Industry evokes different meanings for different agencies and the financial institutions. For example for the purpose of Excise and Sales Tax Exemption, the turnover alone is the determining criterion. THE SMALL SCALE INDUSTRIAL UNDERTAKING An industrial undertaking in which the investment in plant and machinery, whether held on ownership terms or on lease/hire-purchase basis, does not exceed Rs. 10 million (Rs. 1 crore) is regarded as a small-scale undertaking. These include manufacturing and service units
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ANCILLARY INDUSTRIAL UNDERTAKING ,

ANCILLARY INDUSTRIAL UNDERTAKING An industrial undertaking which is engaged or is proposed to manufacture or producing of parts, components, sub-assemblies, tooling / intermediates/ the rendering of services is termed as an ancillary undertaking. Its is required to supply or render or propose to supply not less than 50 % of its production or services or more to other industrial undertakings. The investment in plant and machinery, whether held on ownership basis or on lease or on hire purchase,should not exceed Rs. 10 million
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TINY ENTERPRISE
TINY ENTERPRISE A unit is treated as a tiny enterprise where the investment in plant and machinery does not exceed Rs. 2.5 million (Rs. 25 Lakhs) irrespective of the location of the unit. Many shops, schools, parlours, Photostat and STD booths in your vicinity are all examples of tiny units.
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SMALL SCALE SERVICE AND BUSINESS ENTERPRISE [SSSBES]

An industry related service/business enterprise with investment up to Re.0.5 million (5 Lakhs) in fixed assets, excluding land and building, is treated as an SSSBE. E.g. advertising agencies, Marketing consultancy, Auto repair, services and garages, Tailoring, Desktop printing etc. The service sector has emerged as the major segment of the economy.
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EXPORT ORIENTED UNIT [EOU]

A unit with an obligation to export at least 30 percent of its annual production bythe end of the third year of commencement of production and having an investment ceiling up to Rs. 10 million (Rs. 1 crore) in plant and machinery is termed as an export oriented SSI unit.
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salient characteristics of smallscale businesses

1. Personal Character: owners themselves are managers and so they can operate independently. They can give customized service to their clients, which in many cases is their USP. Labour Intensive: Small businesses actually create more jobs than big businesses. This feature of a small-scale unit is of great significance in a country like India.
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salient characteristics of smallscale businesses

Local Area of Operation: Small businesses are largely local in operation; however the market for its products may be local, regional or even international. Short Gestation Period: The capital investment in the small sector is generally low and the time taken for production to commence is also less. As a result of short gestation period the units give quick returns and consequently the pace of economic development quickens.
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Challenges for SSI

1. Paucity of Finance: The small entrepreneurs possess a weak financial structure and find it extremely difficult to obtain credit because of lack of collateral security. Poor availability of power and other infrastructure: Though infrastructural bottlenecks are problems for big businesses too, yet they can overcome these problems to some extent because of their financial strength e.g. generating their own power, or even influencing the government in framing its policies sometimes. The small entrepreneur on the other hand has to battle with them.
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Challenges for SSI

Obsolete Technology: Most small businesses use old technologies because they cannot afford better. As a result the quality of their goods is inferior and the cost of production is higher than in case of other big ventures. Marketing Problems: The small entrepreneur cannot supply standardized goods of high quality and as a result cannot compete with products of large companies or MNCs.
Challenges for SSI

Poor Managerial and Organizational Skills: usually the entrepreneur has to perform a multitude of diverse functions invariably with out having any exposure to professional education or formal training. High Incidence of Sickness 7 out of 10 small businesses usually fall sick and die within 3to5 years. Main causes for this are a wrong choice of product, poor managerial skills, lack of experience, poor quality of products because of the use of old technologies,
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Entrepreneur Personality
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Entrepreneurs are moderate risk takers. They enjoy he excitement of a challenge, but they do not gamble. Risk situation occurs when an entrepreneur is required to make a choice between two or more alternatives whose potential outcomes are not known and must be evaluated in advance, with limited information. A risk situation involves potential gain and potential loss. As the size of the business expands the problems and opportunities become more numerous and complex. Business growth and development require an entrepreneur not to be afraid of taking decisions and certain risks. An entrepreneur always takes a calculated risk and is not afraid of failure.
Entrepreneur Personality: Risk Taking
Entrepreneur Personality:
Need for Independence
: - The need for independence is the prime characteristic that has driven the entrepreneurs to start their own business. Entrepreneurs do not like to be controlled by others. They do not wait for direction from others and choose their own course of action. They set their own challenging goals and put efforts to achieve this goal. The independence provides opportunity for trying out new ideas and helps them achieve their goals.
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Entrepreneur Personality: Imaginative

- Successful entrepreneurs possess a high degree of imagination and foresightedness. Entrepreneurs have a great vision. Knowing the present and the past the entrepreneur is able to predict the future events the business more accurately than others. It is because of their visionary nature and power of imagination that helps them in anticipating problems and evolving actions strategies for such problems.
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Entrepreneur Personality:
Emotional stability
- The most important personality factors contributing to the success of an entrepreneur are emotional stability, personal relations, consideration and tactfulness. An entrepreneur must maintain good relations with the customers if he wishes to enjoy their continued patronage. He must also maintain good relation with his employees, whom he shall motivate to perform their jobs at a high level of efficiency. An entrepreneur who maintains good human relations with customers, employees, suppliers and the community has a better chance to succeed in his/ her business.
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Entrepreneur Personality: Administrative ability

- A successful entrepreneur is always a good administrator. He knows the art of getting things done by other people without hurting their feelings of self- respect. He has strong motivation towards the achievement of a task and puts in necessary efforts in getting things done by others.
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Entrepreneurship & Innovation

What is the most recent business innovation youve observed in the last 6 months? Which is the latest innovation practice that youve adopted?
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What Are Innovations?

Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society. Innovation differs from invention in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself
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Creativity and Innovation

Creativity the ability to develop new ideas and to discover new ways of looking at problems and opportunities; thinking new things. Innovation the ability to apply creative solutions to problems or opportunities to enhance or to enrich peoples lives; doing new things.
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Questions to Spur the Imagination

Is there a new way to do it? Can you borrow or adapt it? Can you give it a new twist? Do you merely need more of the same? Less of the same? Is there a substitute? Can you rearrange the parts? What if you do just the opposite? Can you combine ideas? Can you put it to other uses?
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Tips for Enhancing Organizational Innovation

Include innovationas a core company value Embrace diversity Expect creativity Expect and tolerate failure Encourage creativity Create a change of scenery periodically View problems as challenges Provide creativity training Provide support Develop a procedure for capturing ideas
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Various Types of Innovators

In the past most innovations were introduced by practitioners. Even now practitioners are important innovators. They identify a way to meet needs. The scientific discoveries of the late 19th century gave rise to science-based innovations (Edison, Bell, Marconi). Major companies (IBM, Sony, Bell, Kodak, GM) built their own research labs. Public sector labs made important agricultural and environmental discoveries. Universities and start-up companies are becoming major sources of new innovations. The ownership of a technology and leadership in its applications move between organizations over time.
(B)The Entrepreneurial Environment
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Policy Perspectives in India to promote Entrepreneurship

The MSME sector is a nursery of entrepreneurship, often driven by individual creativity and innovation. This sector contributes 8 per cent of the countrys GDP, 45 % of the manufactured output and 40 % of its exports. The State-wise distribution of MSMEs show that more than 55% of these enterprises are in 6 States, namely Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh & West Bengal. Further, about 7% of MSMEs are owned by women and more than 94% of the MSMEs are proprietorships or partnerships
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Policy Perspectives to promote Entrepreneurship

The Govt. has focus on giving financial assistance for Entrepreneurship Development Training Programs (EDPs), Skill Development Training Programmes (SDPs), &Entrepreneurship-cum-Skill Development Training Programs (ESDPs). Financial assistance to States/UTs for their efforts to set up Entrepreneurship Development Institutes would be enhanced with more focus on naxalite affected areas, hilly areas of Jammu & Kashmir, Himachal Pradesh and Uttarakhand, North Eastern Region and areas as Andaman & Nicobar group of Islands, Lakshadweep group of Islands, etc.
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Policy Perspectives to promote Entrepreneurship

E-Commerce has emerged as a powerful tool world over for reaching out to buyers in business as well as consumers worldwide For giving better access to MSME sector to the market, Ministry has already promoted a Business-to-Business (B2B) Portal in NSIC. Now the endeavour would be to have a robust and inclusive, best of the breed, Business-to-Consumer (B2C) Portal in addition to the above A policy has been formulated, awaiting Cabinet approval, to ensure that 20% of the procurement by the different Ministries/ PSUs is made from MSME sector mandatorily
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GOI Policy towards entrepreneurship and SME

(http://indiabudget.nic.in/)
The report of the Task Force on Micro, Small and Medium Enterprises, presented to the Honble PM on 30th January, 2010, provides a roadmap for the development and promotion of MSMEs. The implementation of these policy recommendations is being monitored periodically by the Steering Group constituted under the chairmanship of Principal Secretary to the Prime Minister.
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The National Manufacturing Competitiveness Program (NMCP) is the nodal program of the GOI for developing global competitiveness among Indian MSMEs through improvement in their processes, designs, technology & market access. In line with the overall target set by the Prime Ministers National Council on Skill Development, the Ministry of MSME has taken up skill development as a high priority area. The agencies under the Ministry will conduct skill development programs for about 4.16 lakh trainees during 2010-11. It aims to train 4.78 lakh trainees in the year 2011-12 through its various programs for the development of self-employment opportunities as well as wage employment opportunities in the country.
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Cluster (According to MSECDP) : A group of enterprises located within an identifiable area and producing similar products/services. While 100 members could ideally be the minimum number per cluster, depending on the density of population and other factors, even 200-300 could be a good target group for undertaking Diagnostic Study and the subsequent Soft Interventions in a cluster. As per the guidelines of the MSE CDP, till 2010- 11,12, a total of 471 clusters spread over 28 States and 7 UTs have so far been taken up for diagnostic study, soft interventions and efforts are under way to cover more and more clusters from all the States/UTs.
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Under the Credit Guarantee Fund Scheme for Micro and Small Enterprises, over 1.5 lakh MSE proposals for an amount of Rs 7568 crore have been approved for extending loans without collateral/third party guarantee during the year (up to Nov 2010)thereby registering a growth of over 150 % in terms of number of proposals and over 200 % in terms of credit amount over the corresponding period of last year.
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Under the Credit Linked Capital Subsidy Scheme, 15 % capital subsidy is provided upfront on loans subject to a maximum of ` 15 lakh, for technology up-gradation through adoption of well established & improved technologies approved under the Scheme. During the year (upto November 2010) 1963 MSEs have been assisted and subsidy amounting to ` 117.3 crore has been sanctioned.
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Under the Prime Ministers Employment Generation Program (PMEGP) launched in August 2008, over 2.65 lakh applications have been received up to November 2010, of which 1.13 lakh have been selected by the District Level Task Force concerned for assistance. Financial assistance for 30,881 projects has been sanctioned by banks and loans were disbursed in 23,059 cases which will give employment to about 2.31 lakh persons. It is expected that 6 lakh additional employment opportunities will be generated in 2010-11.
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The Government has tied up financial aid from the Asian Development Bank (ADB) amounting to US$150 million over a period of 3 years for implementing a comprehensive Khadi Reform Program worked out in consultation with the ADB and Khadi and Village Industries Commission (KVIC). Under this reform package, it is proposed to revitalize the khadi sector with enhanced sustainability of khadi, increased incomes & employment for artisans, and artisans welfare and to enable the KVIC to stand on its own with gradually decreasing dependence on Government grants.
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Opportunity Analysis
opportunity analysis\IndiaNewOpportunity.pdf opportunity analysis\ernst n young report doing biz in India.pdf Analysis of AIMA-BCG report for opportunity in India environment Also attached E & Y report on doing businesses in India
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Analysis of business opportunity in different sectors of economy

How should we go about understanding the environment before starting an enterprise ? Environmental scanning Environmental scanning is a concept from business management by which businesses gather information from the environment, to better achieve a sustainable competitive advantage. To sustain competitive advantage the company must also respond to the information gathered from environmental scanning by altering its strategies and plans when the need arises.
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PESTLE Analysis
Recently it was even further extended to STEEPLED, including ethics and demographics.
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PESTLE Analysis
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Quick Start Routes to establish an Enterprise: Franchising, Ancillary & Acquisition

Meaning of franchising? How do you guide a new entrepreneur interested for franchising? Benefits of Franchisor/ee ? Franchising: practice of using another firm's successful business model. For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid the need for investments and liability for a chain. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. For the franchisor, the franchise is an alternative to building chain stores' to distribute goods and avoid the need for investments and liability for a chain.
As practice in retailing, franchising offers franchisees the advantage of starting up business quickly based on a proven trademark, and immediate access to the tooling and infrastructure, as opposed to having to develop them.
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Quick Start Routes to establish an Enterprise: Franchising

In a nutshell, franchising is a business system where under the franchisor grants a license to the franchisee to use the franchisors diverse intellectual property rights, namely, know-how, designs, brands, trade marks, patents, and trade secrets along with the franchisors proven name, reputation and marketing techniques to market the franchisors products or services in return for a sum of money. The franchisor provides training and continuous assistance to the franchisee. Discuss global scenario in franchising ? Leading Franchisors & approximate costs..
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Franchises: World Glimpse

USA : leader in franchising, since the 1930s, when it used the approach for fast-food restaurants, food inns and, slightly later, motels at the time of the Great Depression. 1. Subway (sandwiches and salads) | startup costs $84,300 $258,300, 22,000 partners worldwide in 2004). 2. McDonald's | startup costs in 2010, $995,900 $1,842,700, 37,300 partners in 2010) 3. 7-Eleven Inc. (convenience stores) |startup costs in 2010 $40,500- 775,300, 28,200 partners in 2004) 4. Hampton Inns & Suites (mid-price hotels) |startup costs in 2010 $3,716,000 $15,148,800 5. Great Clips (hair salons) | startup costs in 2010 $109,000 - $203,000
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How do Franchises work best..

Businesses for which franchising work best have one or several of the following characteristics: A good track record of profitability Ease of duplication Detailed systems, processes and procedures A unique or unusual concept Broad geographic appeal Relative ease of operation Relatively inexpensive operation.
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Franchise payments & agreements

2 important payments are made to a franchisor: (a) a royalty for the trademark & (b) reimbursement for the training and advisory services given to the franchisee. These 2 fees may be combined in a single 'management' fee. A fee for "disclosure" is separate & is always a "front-end fee". Agreements typically last from 5 to 30 years, with premature cancellations or terminations of most contracts bearing serious consequences for franchisees. A franchise is merely a temporary business investment involving renting or leasing an opportunity, not the purchase of a business for the purpose of ownership.
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Franchise: India
The franchising of goods and services is foreign to India is in its infancy. The first International Exhibition was only held in 2009. India is, however, one of the biggest franchising markets because of its large middle-class of 300 million. McDonald's is a success story
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ANCILLARY INDUSTRIAL UNDERTAKING

Meaning of ancillary unit? An industrial undertaking which is engaged or is proposed to manufacture or producing of parts, components, subassemblies, tooling / intermediates/ the rendering of services is termed as an ancillary undertaking. Its is required to supply or render or propose to supply not less than 50 % of its production or services or more to other industrial undertakings. The investment in plant and machinery, whether held on ownership basis or on lease or on hire -purchase, should not exceed Rs. 10 million
Ancillarization in India
The ancillary industries in the country are manufacturing a wide range of items to public sector units/MNCs. The ancillary industries have come up to the expectations of large- scale units/MNCs with quality and quantity. Small Industries Development Organization under the Ministry of Small Scale Industries, Govt. of India have launched various programs/schemes to promote ancillarization in the country during last decade.
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Ancillarization in India
Defence production in public sector is since the days of Industrial Policy announced in 1948. As a result a large infrastructure for defence ordnance and equipment consisting of 39 Ordnance Factories, 8 Defence PSUs and 50 R&D laboratories were created in the country. These institutions besides providing direct employment to over 2 lakh persons have also generated large scale indirect employment through ancillaries and SMEs by outsourcing to the later the supply of raw material, semi-finished goods/products parts and components. The combined turnover of the Ordnance Factories and Defence PSUs was Rs. 16.600 crores during 2003-04. These establishments currently outsource their requirements from the private sector to the extent of 20-25% and out of the quantities so outsourced 1/4 is met through the small -scale sector mainly ancillary industries.
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Sub Contracting Exchange (SCX)

A Sub Contracting Exchange (SCX) is a Store house of Data with regard to the capacities of the Small Scale Units in terms of products manufactured/services rendered, idle capacities available on particular processes/machines on the one hand while storing data with regard to the requirements of the buyers which could be product/components/subassemblies/services on the other hand. The Exchange also stores data about the specifications, class of accuracy, quantities, etc. in the above cases. The main objective of storing such a data is to arrange match making between a buyer and a seller, resulting in creased business opportunities.
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Support Organizations for an Entrepreneur and their Role
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Institutions Supporting Small-scale Industries

CENTRAL LEVEL
SSI BOARD KVIC SIDO NSIC NSTEDB NPC NISIET NIESBUD IIE EDI
STATE LEVEL
DIs DICs SFCs SIDCs/SIICs SSIDCs
SSIs
OTHERS
Industry Association Non Governmental Organizations R & D Laboratories
Small-scale Industries Board (SSI Board)

Constituted in 1954 facilitates the coordination and inter-institutional linkages for the development of SSI sector The Board is an apex advisory body constituted to render advice to the government on all issues pertaining to the SSI sector The office of the Development Commissioner (Small-Scale Industry) serves as the secretariat for the board The Board operates broadly in the following areas: - Policies & programs - Development of industries in specific region like Northeast Ancillary development, quality improvement, mktg. assistance - Credit facilities, taxation and modernization - Industrial sickness
Khadi and Village Industries Commission (KVIC)

Statutory body created by an act of Parliament Charged with planning, promotion, organization and implementation of the program for the development of Khadi and other village industries in the rural areas in coordination with other agencies engaged in rural development KVICs functions also comprise building up a reserve of raw materials and implements for supply to producers, creation of common service facilities for processing of raw materials and provision of marketing of KVIC products KVIC is entrusted with the task of providing financial assistance to institutions or persons engaged in the development and operation of Khadi and village industries and guide them through supply of designs, prototypes and other technical information
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Small Industries Development Organization (SIDO)

Established in 1954 on recommendation of Ford Foundation Over the years, it had seen its role evolve into an agency for advocacy, handholding and facilitation for the small industries sector SIDO provides facilities for testing, tool mending, training for entrepreneurship development, preparation of project and product profiles, technical and managerial consultancy, assistance for export, pollution and energy audits, and so on SIDO provides economic information services and advises the government in policy formulation for the promotion and development of SSIs
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National Small Industries Corporation Ltd. (NSIC)

Established in 1955 by GOI with the main objectives to promote, aid and foster the growth of SSIs in the country Over four decades of transition and growth in the SSI sector, NSIC has provided strength through a progressive attitude of modernization, up-gradation of technology, quality consciousness, strengthening linkages with large and medium-scale enterprise and boosting exports of products from small enterprises Main services provided by NSIC are: Machinery and Equipment (Hire Purchase / Lease scheme) Financial Assistance Scheme Assistance for Procurement of Raw Material Government Store Purchase Program Technology Transfer Centre (TTC) Marketing Assistance
National Science and Technology Entrepreneurship Development Board (NSTEDB)

Established in 1982 by GOI, is an institutional mechanism to help promote knowledge-driven and technology-intensive enterprises Major objectives are: promote and develop high-end entrepreneurship for S&T manpower as well as self-employment by utilizing S&T infrastructure and by using S&T methods - facilitate and conduct various informational services relating to promotion of entrepreneurship network agencies of support system, academic institutions and R&D organizations to foster self-employment using S&T with special focus on backward areas act as a policy advisory body with regard to entrepreneurship
National Productivity Council (NPC)

Autonomous institution functioning under the overall supervision of the Ministry of Industry, GOI Primary objective is to act as a catalyst in enhancing the productivity of all sectors of the economy, including industry and agriculture Administered by a tripartite Governing Council (GC) which has equal representation from the government, industry and trade unions Active in the field of consultancy and training and has a number of specialized divisions to provide tailormade solutions to agriculture and industry. These divisions, manned by trained consultants, deal with issues related to industrial engineering, plant engineering, energy management, HRD, informal sector, agriculture and so on NPC is a member of the Asian Productivity Organization (APO), Tokyo, an umbrella body of all productivity councils in Asian region To channelise expertise of NPC to small-scale and informal sector, SIDBI has tied-up with NPC for enhancing technology in small units
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National Institute for Small Industry Extension and Training (NISIET)

Set up in early 1950s, NISIET acts an important resource and information centre for small units and undertakes research and consultancy for small industry development An autonomous arm of the Ministry of Small Scale Industries, the institute achieves its objectives through training, consultancy, research and education, to extension and information services In 1984, UNIDO has recognized NISIET as an institute of meritorious performance under its Centre of Excellence Scheme to extend aid
National Institute for Entrepreneurship and Small Business Development (NIESBUD)

NIESBUD is an autonomous body under the administrative control of the Office of the DC(SSI) NIESBUD established in 1983 by the Ministry of Industry, GOI, as an apex body for coordinating and overseeing the activities of various institutions/agencies engaged in Entrepreneurship Development particularly in the area of small industry and business The policy, direction and guidance to the institute is provided by its Governing Council whose chairman is the Minister of SSI. Besides conducting national and international training programs, the institute undertakes research studies, consultancy assignments, development of training aids, etc.
State Level Institutions DIs and DICs

Directorate of Industries (DIs) At the State level, the Commissioner/ Director of Industries implements policies for the promotion and development of small-scale, cottage, medium and large scale industries. The Central policies for the SSI sector serve as guidelines but each State evolves its own policy and package of incentives. The Commissioner/ Director of Industries in all the States/UTs, oversee the activities of field offices, that is, the District Industries Centers (DICs) at the district level
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State Level Institutions DIs and DICs

District Industries Centers (DICs) In order to extend promotion of small-scale and cottage industries beyond big cities and state capitals to district headquarters, DIC program was initiated in May, 1978, as a centrally sponsored scheme. DIC was established with the aim of generating greater employment opportunities especially in rural and backward areas in the country. At present DICs operate under respective Sate budgetary provisions. DICs extend services of the following nature (i) economic investigation of local resources (ii) supply of machinery and equipment (iii) provision of raw materials (iv) arrangement of credit facilities (v) marketing (vi) 85 Prof Purshottam Patil
State Level Institutions - SFCs

State Financial Corporations (SFCs) Main objectives are to finance and promote small and medium enterprises in their respective states for achieving balanced regional growth, catalyze investment, generate employment and widen ownership base of industry. Financial assistance is provided by way of term loans, direct subscription to equity/debentures, guarantees, discounting of bills of exchange and seed capital assistance. SFCs operate a number of schemes of refinance of IDBI and SIDBI and also extend equity type assistance. SFCs have tailor-made schemes for artisans and special target groups such as SC/ST, women, exservicemen, physically challenged and also provide financial assistance for small road transport operators, hotels, tourismrelated activities, hospitals and so on. Under Single Window Scheme of SIDBI, SFCs have also been extending working capital along with term loans to mitigate the difficulties faced by SSIs in Patil Prof Purshottam obtaining working capital limits on 86
State Level Institutions SIDC / SIIC and SSIDC
State Industrial Development / Investment Corporation (SIDC/SIIC) Set up under the Companies Act, 1956, as wholly owned undertakings of the State governments, act as catalysts in respective states. SIDC helps in developing land providing developed plots together with facilities like roads, power, water supply, drainage and other amenities. They also extend assistance to small-scale sector by way of term loans, subscription to equity and promotional services. 11 out of 28 SIDCs in the country also function as SFCs and are termed as Twin-function IDCs State Small Industrial Development Corporations (SSIDC) Established under Companies Act, 1956, as State government undertaking, caters to small, tiny and village industries in respective states. Being operationally flexible undertakes the activities like (i) procure and distribution of scarce raw materials, (ii) supply of machinery to SSI units on hire-purchase basis, (iii) product marketing assistance, (iv) construction of industrial estates, allied infrastructure facilities and their maintenance (v) extending seed capital assistance on behalf of State government and (vi) providing management assistance to production units
Other State-level agencies Extending Facilities for SSI Promotion

State Infrastructure Development Corporations State Cooperative Banks Regional Rural Banks State Export Corporations Agro Industries Corporations Handloom and Handicrafts Corporations
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Other Agencies
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Legal framework for starting a Business industry in India.

Forms of Enterprises : Sole Proprietorship Partnership Limited Liability Partnerships ( LLPs)
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Sole Proprietorship
Oldest & most common forms of business One man organization, single person owns, manages & controls whole business, has features below: 1. ease of formation, no elaborate legal formalities required, also no registration required, however license from local administration is required profit & loss from business solely borne by the owner No legal existence required, separately from the business. The liability of the proprietor is unlimited, i.e. its extends beyond the capital invested legal framework\e&y_doing_business_india.pdf Page no.110 to 118
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Partnership
Easy to form & no much legal formalities required-registration also not essential. However, if firm is not registered its deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms. The minimum number of partners must be 2, the maximum can be 10 in case of banking & 20 for any other businesses. The firm has no separate legal existence of its own, i.e. the firm & the partners are one in the eyes of law.
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