NAME : ARADHANA MISHRA COURSE : BCOMIS SUBJECT NAME : SMALL BUSINESS MANAGEMENT AND ENTREPRENEURSHIP DEVELOPMENT

REGISTERATION NUMBER : 521060975 LC CODE : 3104 SUBJECT CODE : BM0024

QUESTION NO. 1 Write a note on entrepreneurial functions . ANSWER NO.1 Entrepreneurial functions : In social sciences, agreement about the concept of entrepreneurship is lacking .However, two fundamental perspectives can be differentiated one stresses self employment, while other situates innovative behaviour at the center of interest. An entrepreneur performs a series of functions necessary right from the genesis of an idea up to the establishment and effective operations of an enterprise . Entrepreneurial functions is a topic which has created mix-up, many conflict and several contradicting opinions among expert economists. But the classifications formulated by Peter kilby and Arthur H . cole have widely been regarded as acceptable. Peter kelby has classified 12 entrepreneurial functions under four heads. They are as follows:-

1. Exchange relationship
a) b) c) d) Seeking out of market opportunities Mobilisation of rare resources Purchasing of inputs Marketing of products and responding to competition .

2. Administration
a) Dealing with bureaucracy ( for concession, licences and taxes) b) Dealing with human relationship inside the enterprise . c) Dealing with customer and suppliers.

3. Managerial control
a) Managing finance b) Managing production 4. Techonological skill a) Setting up of factory b) Industrial engineering c) Introducing new production techniques and products . kilby says that the aforesaid functions tend to change according to the size kind etc. of the enterprise. These functions could gain momentum

through training and education. In the light classifications , we can summarise entrepreneurial functions under three parts :1.Innovation :- The basic function of entrepreneur performs is to innovate new products, services, ideas and informations for the enterprise. Entrepreneurship being a creative activity, we can say that an entrepreneur is one who introduces something new in any branch of economic activity. Innovation may be doing new things or doing an existing deed in a new manner. Innovation may involve the introduction of new products, the creation of new markets, the application of new production process, the finding out of new and better raw materials or the discovery of new and better forms of organization. Innovation is different from research or invention. 2. Risk-taking :- The functions of an entrepreneur as risk bearer is specific in nature. The entrepreneur assumes all possible risks of business which emerges due to possibility of changes in the tastes in consumers, modern techniques of production and new inventions. Business is a gamble of skill. Risk is inborn to business. The success of entrepreneurship depends greatly on the ability of the entrepreneur to minimise risk. 3.Organising and Management :- Alfred Marshal states that organizing and management are the most important of the entrepreneurial functions. The organizing function should be performed in such a way as to minimize losses and to reduce the cost of production to the possible extent. When the enterprise faces its growth phase after its incorporation, the entrepreneur delegates several of his authorities to his subordinates. The main functions of ascertaining that activities of the enterprise are not deviating from the proposed objectives, of formulating the policie of the enterprise and of taking decisions appropriate to the established objectives are vested in entrepreneur himself. QUESTION NO.2 Discuss different phases in Entrepreneurial Development Program. ANSWER NO.2

Different phases in Entrepreneurial Development programme :- Entrepreneurial De primarily design to induce

motivation and competence among young prospective entrepreneur Entrepreneurial development has gained the status of a national movement . Entrepreneurial development has been given a more vital and crucial position in industrial development, than any other economics activity . It has been proved that the facilities for entrepreneurial

development can be woven only through planned efforts. The fact that governmental and non-governmental agencies have dedicated themselves recently to entrepreneurial development spreads a ray of hope on this gloomy field. Whatever be their sponsoring agencies, the entrepreneurial programmes have to follow certain phases. They are under :1.Initial phase or pre-training phase :- During this period necessary preparations for implementing the training programme are being made .the important activities during the phase are listed below:a) Creation of the infrastructural facilities required by the programme. b) preparation of the syllabus for the training. c) preparation of the guest facilities for the trainees. d) Inauguration of the training programme. e) formation of the selection committee. g) Advertising propaganda of the traning programme. i) preparation of the application form for the trainees. g) Review of the training facilities. 2.Training phase of development phase :- During this phase efforts are made to increase the entrepreneurial capabilities of the trainees. The main aims of this phase also include the creation of the willingness and motivation in the minds of the trainees and bringing about the changes in the trainees-change which are favourable to their entrepreneurial trait. a) A trainees aptitudely coincides with his project idea. b) A trainee has the motivation for undertaking entrepreneurial adventure and risk expected of an entrepreneur. c) There are no inverse changes in the entrepreneurial outlook and skills of the trainee. d) The trainee has already acquired the skill to take prompt and creative decisions. 3.Post-training phase or follow-up phase:- This is a phase in which it is to be confirmed that the objectives of the training programme have favourably been realized. In addition to this, the entrepreneurs have been given the required managerial skill, financial assistance and infrastructural facilities. Further, the purpose of the activities during this stage is protecting the enterprise in its infancy from all possible drawbacks and shortcomings.

QUESTION NO. 3
What is project, explain the 3 stages of project life cycle.

ANSWER NO. 3

Project :- A project in business and science is typically defined as a

collaborative enterprise, frequently involving research or design , that is carefully planned to achieve a particular aim. An entrepreneur implements a project overcoming various hurdles, with a view to get some benefits-mainly monetary rewards. The entrepreneur originates the idea, makes a detailed study of the various aspects of the project to be implemented, estimates the profit that would accure from the project, and finally implements it. PROJECT LIFE CYCLE:- A project has to pass through three stages: 1.The pre-investment stages:- It covers setting of aims and objectives, forecasting of demand, selection of best means or strategies to achieve objectives, evaluation of characteristics of resources or input required, projection of financial plan, cost-benefit analysis and ultimately, the pre-investment appraisal. 2.The construction phases:- It starts after the investment decision is taken. Resources in the form of land and buildings, plant and machinery, transport, communication and other services, control systems, sales and marketing organization, managerial personnel, acquisition of materials and supplies etc., are assembled and all these resources are allocated to develop or create a tangible project which is start to achieve the set objectives. 3.The Normalisation phase:- The allocated resources or assets are utilized or employed to produce the end results, output of goods or services which are required to fulfill the project objectives. The project starts operating, processing inputs and generating outputs.

QUESTION NO. 4
Explain the internal and external sources of finance for an Enterprise.

ANSWER NO. 4 Sources of finance:- An enterprise can raise the required funds
could broadly be classified into two sources.These are : 1.Internal sources :- This source, funds are raised from within the enterprise itself. The internal sources of financing could be owners capital known as equity, deposits and loans given by the owner, the partners, the directors, as the case may be, to the enterprise. One sources of raising funds internally may be personal loan taken by the entrepreneurs on his/her personal assets like provident fund, life insurance policy, buildings, investment etc. In addition to these, in case of a running enterprise, funds could also be raised through the retention of profits or conversion of some assets into funds. The scope for raising funds from internal sources

Particularly in the case of small-scale enterprises remains highly limited. 2.External sources:- In short, funds raised from other than internal sources are external sources. The external sources usually include the following:1. Deposits or borrowings from relatives and friends and others. 2. Borrowings from the banks for working capital purposes. 3. Credits facilities from the commercial banks. 4. Term-loans from financial institutions. 5. Hire-purchase or leasing facility from the National small industries corporation (NSIC) and State small industries corporations(SSICs). 6. Seed/Margin money, subsidies from the government and the financial institutions.

QUESTION NO. 5
Write a note on MODVAT and Small Scale Industries.

ANSWER NO. 5 MODVAT AND SMALL SCALE INDUSTRIES:- In any of

the socio political system, the problem of taxation has been very common touching all the section of the society deeply and thoroughly regarding the tax system in India it is important to note that our system has failed to understand the sensibility behind the taxation out and out. A very disturbing question having cascading effect on our polity as a whole. Consequently the solution to the question was explored by our formal finance minister v.p. singh extending the present on going system to saral and MODVAT like technique. The MODVAT scheme is aimed at Modified Value Added Tax gently and graudly expending its horizons to set of exercise and other related duties paid on various inputs of final product. The basic approach behind MODVAT is to loave towards the extension of on going systems of porforma credit to all commodities set for exercise department and the products like textile, petroleum and taxinated products like tobacco and haxeses they are exempted. Where exempted from MODVAT. This is was planned in a fashed manner so as to maintain and satisfy all the labels of societyIt was introduced to remove all the implication and complications of taxation pattern. Any loss was cleared through the provision inserted in the MODVAT. The intension behind MODVAT

was to irredicate the complication in the Indian public and bridge the gap between the richer and the poorer for this small scale industries were given top provity so that our society good be event and free from taxation. This programme is to be implemented in a phased manner over a period of years mainly considering its implications on revenue account. It is important to mention that neither the MODVAT programme intends to raise maximum revenue nor to give substantial relief on excise.

QUESTION NO. 6
Discuss New Small Enterprise Policy1991.

ANSWER NO.6 New Small Enterprise Policy 1991:- The Government of

India, for the first time, tabled the new small enterprise policy titled Policy Measures for Promoting and Strenthening and Supplementing Small, Tiny and Village Enterprises in the parliament on August 6, 1991. The main thrust of New Small Enterprise Policy is to impart more vitality and growth impetus to the sector to enable it to contribute its mite fully to the economy, particularly in terms of growth of output, employment and exports. The sector has been substantially delicensed. Concerted efforts would be made to deregulate and debureaucratize the sector with a view to remove all fetters on its growth potential, on the one hand, and reposing greater faith in small and new entrepreneurs, on the other. The salient features of this new small enterprise policy are as under: 1. Increase in the investment limit in plant and machinery of tiny enterprises from Rs. 2 lakhs to Rs. 5 lakhs, irrespective of the location of the enterprise. 2. Inclusion of industry-related services and business enterprises, irrespective of their location, as small scale industries. 3. To introduce a limited partnership Act. This would limit the financial liability of the new entrepreneurs to the capital invested. 4. Introduction of a scheme of integrated infrastructural development for small-scale industries. 5. Introduction of factoring services to help solve the problems of delayed payments to small sector.

6. Market promotion of small-scale industries product through cooperative/public sector institutions, other specialized professional/ marketing agencies and the consortium approach. 7. To set up a technology development cell in the small industries development organization. 8. To accord priority to small and tiny sector in the allocation of indigenous raw materials. 9. Setting up of an Export Development Centre in the small industries Development organization (SIDO). 10. To widen the scope of the National Equity Fund (NEF), to enlarge the single window scheme and also to associate commercial banks with provision of composite loans. 11. The new policy is founded on a proper understanding of the fundamental problems of small-scale sector and the measures proposed by it are well directed to mitigate the various handicaps that faces this sector. 12. One important features is the introduction of a new legal form of organization of business, namely, restricted or limited partnership. As per this form, the liability of other partner is limited to their invested capitals. This can be considered as a welcome provision. It will attract equity capital from friends and reletives who were earlier reluctant to advance their funds due to the limited liability of the partners.