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Ques 1:- Define entrepreneur and entrepreneurship. Explain Characteristics & types of entpreneur.
Ans:- Introduction- The word Entrepreneur has been taken from the French language where it cradled &
originally meant to designate an organizer of musical or other entertainments.
Definition:- Entrepreneur, A person who creates some new events, organizes factors of production,
undertakes risk & handles economic uncertainty involved in new enterprise/ venture.
Entrepreneurship:- A set of attributes that an entrepreneur possesses & practices to establish & run the
enterprise.
Characteristics/ Qualities:-
1. Hard work:- Willingness to work hard distinguishes a successful entrepreneur from unsuccessful
one, The entrepreneur with his tedious, sweat filled hours & persevnance revive their business even
from on verge of failure.
2. Desire for High Achievement:- The entrepreneurs have a strong desire to achieve high goals in
business.
3. Highly optimistic:- The successful entrepreneurs are not distributed by the present problems faced
by them. They are Optimistic for future that the situations will become favorable to business in future.
4. Independence:- One of the common characteristics of the successful entrepreneurs has been that
do not like to be guided by others and to follow their routine.
5. Foresight:- The entrepreneurs have a good foresight to know about future business environment.
6. Good Organizer:- Different resources required for production are dive reed from each other. It is the
ability of the entrepreneurs that brings together all resources required for starting up an enterprise &
then to produce goods.
7. Innovative:- Entrepreneur create ideas into useful applications by combining resources in new of us
usual ways to provide value to society for new or improved products, technology or services.
8. Time Management:- A successful entrepreneur maintain a perfect time Management in each & every
step.
9. Others:-
- Effective Communication
- Analytical Ability
- Perseverance
- Independence
Types of Enterprenurers:-
1. Innovation Entrepreneurs:- Innovating Entrepreneurs is who introduces new goods, inaugurates
method of production, discover new market and re-organizes the enterprise.
2. Imitative Entrepreneurs:- These are characterized by readiness to adopt successful innovations
inaugurated by innovating enterprises. Imitative entrepreneurs do not innovate the changes
themselves they only imitate techniques & technology involved by others.
3. Fabian Entrepreneurs:- are characterized by very great caution & skepticism in experimenting any
change in their enterprises. They imitative only when it become perfectly clear that failure to do so
would result in a loss of the relative position in the enterprise.
4. Drone Entrepreneurs:- They are characterized by a refusal to adopt opportunities to make changes
in production formulas even at the cost of severely reduced returns relative to others like producers.
Such entrepreneurs may even suffer from losses but they are not ready to make changes in their
existing production methods.
According to Behavioral Scientists Some other types of Entrepreneurs:-
1. Salo Operators:- Salo Operators who extent ally work alone & if needed at all employ a few
employees.
2. Active Partners:- are those entrepreneurs who start/ carry on an enterprise as a joint venture.
3. Inventors:- Such entrepreneurs with their competence & inventive invent new products. Their basic
interest lies in research & innovate activities.
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4. Challenges:- These are the entrepreneurs who plunge into industry because of the challenges it
present. When one challenge seems to be met, they begin to look for new changes.
5. Buyers:- These are those entrepreneurs who do not like to bear much risk. Here in order to reduce
risk in valued in setting up a new enterprise, they like to buy the on going one.
6. Life timers:- These entrepreneurs take business as an integral part to their life.
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(f) Reducing unrest and social A tension amongst Youth: - Many problems associated with youth
unrest and social tension are rightly considered to be due to youth not being to be engaged in
productive work.
In the changing environment where we are faced with the problem of recession in wage employment.
Opportunities, alternative to wage career is the only viably option. The country is required to divert the
youth with latent entrepreneurial traits from wages career to self-employment career.
(g) Innovation in Enterprise: - Business enterprises need to be innovative for their survival and better
performance.
(h) Improvement in living standards: - Entrepreneurs set up industries, which remove scarcity of
essential commodities and introduce new products.
(i) Economic Independence: - Entrepreneurship is essential for national self-reliance.
The economists View: - According to economists entrepreneurship and economic growth will take
place in those situations where particular economic conditions are most favorable.
Sociologists view:- Sociologists argue that entrepreneurship is most like to emerge under a specific
social culture. According to them social, sanctions are responsible for the emergence of
entrepreneurship.
Psychologists View: - According to psychologists view main characteristics are:-
- The capacity to with stand social opposition.
- Energy of will and mind to overcome fixed habits of thought.
- An institutional capacity of see things in a way, which after wards proves correct.
Important:- Theory of Entrepreneurship:-
(i) Entrepreneurship: A function of Innovative:- Joseph A. Schumpeter (1934). Under this theory
developed five types of events: -
- Introduction of a new product in the market.
- New production technology
- It may arise on account of a new market
- New Sources.
- New organization of any industry.
(ii) Entrepreneurship: A function of group level pattern:- Frank W. Young was reluctant to accept the
entrepreneurial characteristics at the individual level.
(iii) Entrepreneurship: A function of Management Skills & Leadership:- Bert F. Hoselitz (1952) maintain
a managerial ability and more Important he must have ability to lead.
(iv) Entrepreneurship: An Organization Building Function:- Frederick Harbison (1960)
(v) Entrepreneurship: A function of High Achievement:- McClelland (1961)
(vi) Entrepreneurship: Input Templating shap filling function (1968) Liebenstein.
(vii) Entrepreneurship: A function of Status withdrawal:- Eeverlt Hagen (1962)
(viii) Entrepreneurship: A function of Social, Political and Economic Structure: - Kunkul (1970)
(ix) Entrepreneurship: A function of Religion beliefs:- Max Weber (1972)
(C ) Model of Entrepreneurship:-
(a) According to Kao:- A conceptual Model of Entrepreneurship:-
(b)
The Person
The Environment
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Percepting Factors
Identification
Development
Promotion
Follow up
(iv) According to M M Pakhari (1977)
Stimulatory
Support
Sustaining Activities
Ques 4:- Define entrepreneurship Development Programme. Discuss various needs, Content,
Importance, Phases and Problems of EDPs in India?
Ans:- EDP become a matter of great concern in all developed and developing countries all over the world.
Need/ Objectives of EDP: -
(i) Develop and Strengthen their entrepreneurship Development Programmes are achievement.
(ii) Analyze environmental set up relating to small industry & small industry & small business.
(iii) Select Product.
(iv) Formulate project for the product.
(v) Understand the process & procedure unvalued insetting up a small enterprise.
(vi) Know the sources of help & support available for starting a SSI.
(vii) Know the pros & cons on becoming an entrepreneur.
(viiii) Appreciate the needed entrepreneurial discipline.
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- Achievement Orientation
- Expansion Orientation
- Management Orientation
Problems faced by EDPs: -
1. Trainer:- motivations are not found up to the mark on motivating the trainees to start their own enterprises.
2. EDP organizations lack in commitment & sincerity in conducting the EDPs.
3. The authentic attitude of the supporting agencies like banks and financial institutions.
5. Selection of wrong trainees also leads to low success rates of EDPs.
6. Non-conductive environment & constraints make the trainer-motivators roll
(D) Working capital Financing/ Working Capital requirements/ The need for and significance of
adequate working capital in the successful functioning of SS enterprise.
Ans:- Introduction:- Working Capital is the life blood of a business. Its adequate planning and proper
management is necessary for the successful operations & continued existence of a business.
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Definition:- Working Capital are those funds which a business keeps on hand to use in buying materials,
office suppliers and Fixtures and other items and services required in the day to day running of a business
undertaking. It is also known as circulating & revolving capital.
In working capital compose of two parts:-
- Regular/fixed
- Variable
Concept of working capital: -
(i) Gross working Capital GWC = Total Current Assets
(ii) Net Working Capital NWC = CA-CL
Need and Significance of working capital: -
- Necessary Liquidity
- Smooth functioning
- Increasing firms value
- Maximization of profits
- Length of operating cycle.
- Nature of business.
Sources of working Capital financing: -
Loans from commercial banks.
Public deposits
Trade Credit
Discounting bills of exchange
Advances from customers
Bank Overdraft
Management of Working Capital: - means managing different Components of current assets & current
liabilities.
- Management of Cash
(i) Controlling the level of cash
(ii) Controlling inflows of cash
(iii) Controlling outflows of cash
(iv) Optimum use of surplus cash.
- Management of Inventory: -
(i) Model
(a) Economic Ordering Quantity
- Management of Accounts Receivable.
Ques 6:- Explain Small Scale Industry and Sick Small Scale Industry.
Ans:- Small Scale Industry:- An Industry with investment limit up to Rs. 5 Crore in Plant & Machinery.
Types of Small Scale Industry:-
1. Manufacturing Industries.
2. Feeder Industries
3. Serving Industries
4. Ancillary to Large Industries
5. Mining or quarrying
Characteristics:- SSI is beautiful because of its following important characteristics:
1. A small scale Industry is generally a one-man show.
2. SSI has a lesser gestation period, the period after which the return on investment starts.
3. Small Industrial undertakings is generally localized catering to the local & regional demands.
4. Small Industries are fairly labour intensive with comparatively smaller capital investment.
5. Using local resources, small units are decentralized & dispersed to rural areas. Thus, the
development of SSI in rural areas promotes more balanced regional development.
Rationale of Small Scale Industries So established can broadly be classified onto 4 arguments:-
1. Employment Argument:- In new of Indias Scarce Capital resources and abundant labour, the most
important arguments and value highly in favor of the SSIs that they have a potential to create
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SICK INDUSTRY: - An Industry which has at the end of any financial year accumulated losses equal to or
exceeding its entire net worth & has also suffered from cash losses in such financial year immediately
preceding such financial year.
Sick Small Scale Industry: - A Small unit when:
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(j) any of its borrowal accounts has became a doubtful advance i.e., principle or interest in respect of
any of its borrowal accounts has rmi8nded overdue for a period exceeding 2 and years and
(ii) there is erosion in the net worth due to accumulated cash losses to the extent of 50% or more of its
peak net worth during the preceding two accounting years.
Path of Industrial Sickness:-
Healthy Unit Tending towards Incipient of Sick
Sickness Sickness
1. Cash Profit (+) 1. Cash Profit (-)
2. NWC (+) 2. NWC (+) All (-)
3. Net Worth (+) 3. NW (+) 02 or more (-)
Major Symptoms of Industrial Sickness:-
1. Persisting shortage of cash
2. Deteriorating financial ratios.
3. Widespread use of creative accounting.
4. Continuous tumble (fall down) in the prices of the shares.
Ques 7: - Define feasibility Study? Explain various steps involved in preparing a project feasibility
report? How to prepare feasibility report?
Ans:- How to prepare feasibility report:- The success of an entrepreneur depends upon the entrepreneur
doing the right thing at the right time. Starting a new enterprise is a very challenging & rewarding task. An
entrepreneur has to take numerous decisions, right time from the conception of a business idea, upto the
start of production. Hence, the identification of the project to be undertaken requires an analysis of the
project in depth. Therefore, a techno-economic feasibility of the project has to be conducted before preparing
a feasibility report of the business.
Feasibility Analysis: - An entrepreneur, has to formulate a project, when a project idea is developed.
Project formulation is a process whereby; the entrepreneur makes an objective and independent assessment
of various aspects of an investment proposition of a project idea for determining it as total impact and also for
determining its liability.
Feasibility Analysis the project idea is examined from the point of when proposal or not.. Hence, the project
idea is examined the context of interval and external constraints.
In F.A. 3 alternatives: -
- First, the project idea seems to be feasible, then we proceed with the idea & go to the next
stage.
- Second, the project idea is not feasible then, we abandon the idea.
- Third, we are unable to arrive at a conclusion for want to adequate data, then, we make efforts
to collect the required data & design development.
Although every feasibility analysis is different & is tailored to the product, its goal is to identify the strength &
weakness of the project.
Planning of the Techno-economic feasibility(TEF) to the Project: -
Techno-Economic Feasibility refers to the estimation of project demand potential & choice of optimal
technology. A project may produce goods or services; it is imperative to know the market for such goods or
services produced T-EF makes an analysis of the market & technology. TEF analysis gives to the project an
individual and sets the stage for deterled design development.
Feasibility Report: - A Feasibility Report of a new enterprise or of an expanding enterprise consists of some
background information about the industry to which the enterprise submitting the report in general.
It also contains the economic information financial data, technical details which serve a finite number of
discrete economic processes or cost structure of the Industry concerned.
The main purpose of the report is providing information that is required for the project appraisal. This report
would enable to financing agencies to purposefully evaluate the project before extending financial
assistance.
Feasibility Report: Contents: -
1. Objectives & Scope of the Report
2. Project Characteristics i.e., the specifications, uses and application, standards, quality etc.
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3. Market position and trends i.e. the installed capacity, production and anticipated demand, export
prospects & information an import & export, price, structure & trends.
4. Raw materials requirements prices, sources & properties of raw materials.
5. Manufacturing processes, selection of process, project schedules & techniques.
6. Plant & Machinery, i.e. equipments instruments, laboratory equipments, electric load & water supply
arrangements, sources of plant & machinery.
7. Requirements of land area, building, construction. Schedule.
8. Financial implications i.e. fixed & working capital investment project cost & profitability.
9. Marketing channels, then trading practices & marketing strategies.
10. Requirements of personnel, labour expenses on wage payment.
A feasibility report contains the economic information, financial data, and technical data etc. of the project
to be undertaken. It can be prepared with the help of organizations like the small industries service Institute
(SISI) & small Industries Development Organization (SIDO) A feasibility report is prepared after conducting a
prefeasibility study (A various opportunities or alternatives available) & feasibility study (a detail study of an
alternatives chosen).
Considerations while preparing a Feasibility Report: - It is prepared only after conducting a prefeasibility
study & detailed feasibility study.
Feasibility Study: - Provides information an economic, technical, managerial, commercial & financial
requirements in detail. It covers all the aspects of an investment project.
Prefeasibility Study: - an analysis is made on the various opportunities available, economic, alternatives,
technical details, financial availability, raw-material availability for various opportunities.
Some Important factors to be considered while preparing a feasibility report are as follows: -
(A) Technical Considerations:- It establishes whether the project is technically feasible or not. It provides
an opportunity for a consideration of the effects o0f various technical alternatives on employment, ecology,
infrastructure demands, capital services, balance of payments and other factors.
Technical Consideration Include:-
(i) A description of two project, including specification relating to the physical, mechanical & chemical
properties as well as the uses of the product.
(ii) A description of the selected manufacturing process showing detailed floe charts, and presenting the
alternative process which may have been considered and the justification for the adoption of the selected
process.
(iii) A determination of the plant size & production schedule, which includes the expected volume fir a given
time period on the basis of start up & technical factors.
(iv) Selection of Machinery & equipment including specification. Equipment to be purchased and its origin,
quotations from suppliers, delivery dates, terms of payment and a comparative analysis of alternatives in
terms of cost, reliability, performance & spare parts availability.
(v) An identification of plans location and a design of the plant layout.
(vi) A study of the availability of raw materials, terms of payments, sources of supply and continuity of supply.
(vii) An estimate of labour required and the supervision required for the manufacture of the product.
(viii) A determination of the type & quality of wasp to be disposed of waste disposal methods, its costs and
the necessary clearance from proper authorities.
(ix) An estimate of the production cost of the project.
(B) Economic Consideration:- Economic factors have to be taken into consideration while preparing a
feasibility report. Economic data relates to market, which can be obtained from secondary sources like
government agencies, trade associations, chamber of commerce, trade directors & other publications. Data
can also be obtained through primary sources like interviews, mailed questionnaire & market survey.
Economic Consideration Include:-
(i) Identifying the market potential in terms of current demand for the product & projected future demand. The
entrepreneur should use relevant Stastical criteria for this purpose.
For ex.:- A Potential text book publisher may find out the number of students enrolled in the concerned
subject/ of text book uses and the proportion of demand.
(ii)The cost & project at different price levels have to be taken into considerations.
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(iii) The competitors both direct (similar project) Indirect (substitutes) have to be analysed. It helps in
identifying the strengths, strategies etc., of the competitors & have strategies superior to the competitors can
be analysed.
(iv) Data relating to general economic trends such as per capita income, level of consumption expenditure,
inventories, new orders etc. Have to be considered.
(v) Data concerning price structure, discount pattern & sources of market information have to be collected
(C) Financial Considerations:- help the project to evaluate the different measures of commercial
profitability & the magnitude of financial required. It requires the assembly of the market & technical cost
estimated into various perform statements.
Financial Consideration include:-
(i) Assessment of total cost, initial capital requirements & cash flows relating to the project timings.
(ii) A financial analysis showing returns investment returns on equity, break-even volume & price analysis.
(iii) Supporting scheduled for financial projection, stating the assumption made as to the collection period of
sales, inventory levels, payment period of purchase expenses & the elements of production cost, selling
administrative & financial expenses.
(iv) The details with regard to sources of fund such as equity share, preference share, long term loans, bank
loans, trade credit etc.
(D) Consideration of Managerial Competence / Managerial Commercial:- A proper assessment of the
number and skills of staff required for the preparing a feasibility report for this purpose an appropriate
organization structure is decided. Then the skills & talents required to man the structure are determined.
Managerial competence considerations include: -
- Activity analysis involving anticipated workflow & the activities in valved in the projects.
- Grouping of activities into tasks, which employees can perform effectively.
- Classification of tasks as the building blocks of the organization structure.
- Determining inter-relationship between different positions to decide the chain of command.
(E) Implementation Schedule:- is also of great consideration while preparing a feasible report. The
implementation schedule is prepared to ensure timely competition of the project.
It helps in saving time & cost delays in project completion may Leoparadise the financial viability of the
project.
An implementation schedule includes when to apply for term-loan, procurement of land site, construction of
factory shed getting water & power connections, purchase of plant, installation of plant, recruitment of human
resources, trial production & the time for commencement of commercial production.
Technical Consideration
Economic Consideration
Implementation Schedule
1. Introduction
(a) Scope
(b) Product
(c) Process
(d) Marketing
(e) Location
(f) Sources of finance/ repayment schedule
2. Scheme
(a) Land & building
(b) Machinery & equipments
(c) Testing equipments
(d) Total non-recurring expenditure
(a+b+c+d)
Indirect Direct
No. & wages p.m. No. & wages p.m.
(f) Raw material & Consumables
Per month on single shifts basis with specifications)
(a) Indigenous (b) Imported
(g) Other Items of Expenditure (p.m. on single shift basis)
- Power & water charges
- Advertising & traveling
- Transport
- Commission to agents
(h) Total recurring expenditure: -
(f) + (g) + (h)
(i) Working capital for 3 months: -
(3 X recurring expenditure)
(j) Total Investment required: -
(a) Non-recurring expenditure (b) Working capital for 3 months
(k) Total cost of Production: -
- Total recurring expenditure
- Depreciation on machinery & equipments
- Depreciation on building
- Maintenance charges
- Interest on total investment
- Welfare for staff
- Office Stationary & Postage etc.
(l) Profit & Loss Account: -
- By sales of quantity of @ Rs. (ex-factory exclusive of applicable taxes)
- Cost of production
- Profit (i) & (ii)
(m) Other fixed Investments: -
- Packing & Forwarding charges
- Electrification & Installation Charges
- Cost of tools/ fixtures
- Cost of office equipments.
3. Profitability & Projections: - (generally for about 5 to 10 years)
- Phase of activity
- Profitability of phases
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4. Infrastructure: -
- Locational Advantages
- Availability of material/ power/ water/ labour
- Government Policy
5. Break-Even Point: -
- Fixed Cost (exclusive Salaries/ rent/ interest on investment & administrative cost)
- Variable cost (direct labour/ direct material/ Income-tax/ commissions & Admn. Cost)
For eg. Fixed + Variable = Total
1 term of cost
Fixed Variable Total
Material Rs. Rs. Rs.
Labour Rs. Rs. Rs.
Other Expenditure Rs. Rs. Rs.
Q = F
P-V
F = Fixed Cost
P = Sales price per unit
V = Variable cost per unit
6. Name & Address of Suppliers
- Raw Materials
- Machinery & equipments
7. Remarks
FEASIBILITY PLANNING:-
Feasibility Plan: - An initial written plan comprising all the elements of a good business plan with objective
of determining whether a new venture can be expected to succeed. Feasibility Planning encompasses the
full range of business planning activities, but it seldom requires the depth of research or detail expected for
an established enterprise
Fundamentals of a Feasibility Plan: -
- Developing a hood plan
- Protecting the business
- Making the plan readable
Eight common elements in a Feasibility Plan: -
1. Executive Summary (product or Services)
2. Business Concept (major objectives)
3. Product services
4. Market Research & Analysis
5. Market Plan (strategy to complete pricing promotion distribution)
6. Manufacturing or Operations
7. Entrepreneurial Team (profile of finders)
8. Financial Documentation (assess & liabilities)
A model of New Venture: -
Feasibility Planning (4 Stages)
1. Pre-Start up Stage: - The period during which entrepreneurs plan the venture and so the preliminary work
of obtaining resources & getting organized prior to stand up.
Business Concept defined = Purpose
I. Sole Proprietorship Business:- This is the oldest form of business ownership. It is also the simplest and
most natural.
Characteristics/ Features:-
1) One-man ownership
2) Personal Control
3) Total or undivided risk
4) Liability is unlimited
Suitability
1) When enterprise is small in size.
2) When little capital is required.
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(2)Partnership Deed
Though a partnership is constituted by agreement between the parties, it need not necessarily be in writing. It
may be of the most informal character, even oral, though the business of partnership may involve millions of
rupees, or on the other hand, it may be an elaborate written document called the Deed of partnership or
Articles of partnership, and drafted by a lawyer. Where the partners have decided to enter into a deed of
partnership, it should be stamped according to the provisions of the stamp Act. A properly drawn up Deed of
Partnership should ordinarily cover the following points:-
1 Name of the firm together with the names of the partners composing it.
2. The nature of business and the duration of partnership.
3. The amount of capital each partner undertakes to contribute and the manner of its contribution.
4. The ratio for sharing profit & loss.
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5. Salaries, commissions, etc, if any, payable t5o partners, and also any drawings which may be
allowed.
6. Valuation goodwill
7. Matters relating to retirement, death and admissions of partners..
8. Settlement of account at the dissolution of the firm.
9. Arbitration Clause
10. Ant other clause or Clauses found necessary.
(3) Company form of enterprise: -
For enterprise, which require huge capital base, individual
proprietorship or partnership may not be able to supply the required capital. Therefore, it becomes necessary
to have another form of organization through which large sums of money could be arranged from a large
number of people who are either not capable of running business enterprises or have no time to do so. They
will, however, be willing to invest their savings in a business provided they are assured that their money is
safe and they will not be called upon to pay anything more than what they undertake to invest. The form
suitable to serve these purposes is found to be a Limited Company. This firm enables the entrepreneurs to
get the necessary capital from friends, relatives, general public etc. retaining at the same time, the control
and management in their own hands. Joint Stock Company is, in fact, much better than partnership form of
business.
In Joint Stock Companies, the capital is contributes by a large group of people known as shareholders.
Some of the labour Laws an entrepreneur should be familiar with:
1. Workmens Compensation Act, 1923
2. Trade Union Act, 1926
3. Payment of wages Act, 1936
4. Industrial Disputes Act, 1947
5. Minimum Wages Act, 1948
6. Factories Act, 1948
7. Employees Provident Funds and Family Pension Fund Act, 1952
8. Employees State Insurance Act, 1952
9. Payment of Bonus Act, 1965
10. Payment of Gratuity Act, 1972
(I)Project Identification: -
If you ask any one intending entrepreneur what project he/she will select, the obvious answer would be a
project having a good market. But, the question is how without knowing the product could one determine the
market? Whose market will one find out without knowing the item, i.e. Product? Idea generation about a few
projects provides a way out of above tangle.
Idea Generation:-
Project selection process stats with the generation of a product idea. In order to select the most promising
project, the entrepreneur needs to generate a few ideas about the possible projects he/ she can undertake.
The projects ideas can be discovered from various Internal & External sources. These may include:-
i. Knowledge of potential customer needs
ii. Watching emerging trends in demands for certain products
iii. Scope for producing substitute product
iv. Going through certain professional magazines catering to specific interests like electronics,
computers etc.
v. Success stories of known entrepreneurs or friends or relatives.
vi. Making visits to trade fairs and exhibitions displaying new products and services
vii. Meeting with Govt. agencies
viii. Ideas given by the knowledgeable persons
ix. Knowledge about the Government Policy, concession and incentives, list of items reserved for
exclusive manufacture in small scale sector and
x. A new product introduced by the competitor
All of these sources putting together may give a few ideas about the possible projects to be examined as the
final project. This is also described as Opportunity scanning and identification.
After going through the above process, imagine that you have been able to get five project ideas as a result
of above analysis. These five project ideas are:
1. Nut and bolt manufacturing (Industry)
2. Lakhani Shoes (Industry)
3. Photocopying Unit (service- based Industry)
4. Electro-type writer servicing (service-based industry)
5. Poloythene bags for textile industry (ancillary industry)
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From above list, now one project idea will be finally selected going through the following selection process.
Product
Location Interdependence
Process Market
Working Capital
Labour
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Ques 8 (C ):- Define achievement Motivation? How it is promoted? With achievement theory?
Ans:- Achievement Motivations:- Ones drive to overcome challenges and obstacles to achieve the set
goal
McClellands Acquires Need Theory:- According to David McClelland (1960s) 3 types of needs as a
result of ones life experience. These three needs are:
1. Need for affiliation: - These refer to needs to establish and maintain friendly and warm relations with
others.
2. Need for power: - These mean the ones desire to dominate and influence others by using physical
objects and actions.
3. Need for Achievement: - This refers to ones desire to accomplish something with own efforts. This
implies ones will to excel in his/ her efforts.
Achievement Motivation: - The need for achievement plays an important role in making an entrepreneur as
successful. It is in an inner spirit that activates an entrepreneur to strive for success. In simple terms, need
for achievement is the desire to do well. The empirical evidences support the hypotheses that need for
achievement contributes to entrepreneurial success. Hence, there is the need for developing achievement
motivation for developing entrepreneurship in an economy.
How to develop achievement motivation:-
David McClelland, a well-known behavioral scientist of USA holds the view that achievement motivation can
be developed through training and experience. For this, McClelland conducted his experiments with groups
of businessmen in three countries, i.e., Malawi, India and Equador. He carried out a separate full-fledged
training programme in India to instill Achievement motivation in the minds of entrepreneurs. His successful
experiment is popularly known as Kakinada Experiment. Following is a brief description of the same.
KAKINADA EXPERIMENT: -
Kakinada is an industrial town in Andhra Pradesh. The experiment started in January 1964. The main
objective of the experiment was to break the barrier of limited aspirations by inducing achievement
motivation. A total of fifty-two persons were selected from business and industrial community of the town.
They were given an orientation programme at small Industry Extension Training Institute (SIET), Hyderabad.
The participants were grouped into three batches. They were put under training for 3 months.
The training programme was designed in such a way that it could help the trainees improve imagination and
enable them introspect their motivation. Accordingly, the programme included the following items in its
syllabi:
1. The individuals strived to attain concrete and regular feedback.
2. The participants sought models of achievement to emulate.
3. The participants thought of success and accordingly set plans and goals.
4. The participants were encouraged to think and talk to themselves in a positive manner.
The impact of this training programme on the participants behaviour was observed after a period of
two years. The observations were encouraging. It was found that those attended the programme
performed better than those did not. The participants need for achievement was assessed by using
Thematic Appreciation Test (TAT). In this TAT, ambition related pictures were displayed to the
trainees and then they were asked to interpret the picture and what is happening in the picture.
Thereafter, all the themes related to achievement were counted and, thus, the final score
represented ones need for achievement. McClelland reached to this conclusion that the training
programme positively influenced the entrepreneurial behaviour of the participants. As regards caste,
the traditionally beliefs ad imitation of western culture, they did not determine ones behaviour as an
entrepreneur.
That the need for achievement motivation can be developed more especially in younger minds is
well supported by the cross-country experiments. For example, a junior Achievement Programme is
started in the United States of America with a view to instill achievement motivation in the minds of
younger generation. Similarly, in United Kingdom, Young Enterprise programme has been started
with the same objective of inducing achievement motivation in younger minds.
The above said experiment/ programmes have made us to realize that entrepreneurship is to be
developed from a very young age. Accordingly, efforts have been made to develop a school
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curriculum that would result in a high need for achievement among the students. For this purpose,
the success stories drawn from history and legends of the indigenous culture are introduced in
course curriculum to induce in young minds the need for achievement and strong desire to do
something good/ great they grow up. This is because the younger minds are more suspect able to
change.
Ques 9:- Discuss the need for institutional support to entrepreneurs/ SSI.
Ans:- Need for Institutional Support:- Starting a business or industrial unit say, enterprise in
short-requires various resources and facilities. Small scale enterprises, given their small resources,
find it difficult to have these their own. Finance has been an important resource to start and run an
enterprise because it facilitates the entrepreneur to procure land, labour, material, machine and so
on from different parties to run his/ her enterprise. Hence, finance is considered as life-blood: for an
enterprise.
Institutional Support to Small Entrepreneurs:-
I. National Small Industries Corporation Ltd. (NSIC):- The national small Industries corporation
Ltd., an enterprise under the Union Ministry of Industries, was set up in 1955 to promote, aid and
foster the growth of small scale industries in the country. NSIC provides a wide range of services,
predominantly promotional in character to small-scale industries. Its main functions are:-
To provide machinery on hire-purchase scheme to small-scale industry.
To provide equipment leasing facility.
To help in export marketing of the products of small-scale industries.
To participate in bulk purchase programme of the Government.
To develop prototype of machines and equipments to pass on to small-scale industries for
commercial production.
To distribute basic raw material among small-scale industries through raw material depots.
To help in development and up gradation of technology and implementation of modernization
programmes of small-scale industries.
To impart training in various industrial trades.
To set up small-scale industries in other developing countries on turn-key basis.
To undertake the construction of industrial estates.
II. Small Industries Development Organization (SIDO):- Small Industries Development
Organization is a subordinate office of the Department of SSI & ARI. It is an apex body and nodal
agency for formulating, coordinating and monitoring the policies and programmes for promotion and
development of small-scale industries. Development commissioner is the head of the SIDO. He is
assisted by various directors and advisors in evolving and implementing various programmes of
training and management consultancy, industrial investigation, possibilities for development for
different types of small-scale industries, development of industrial estates etc. The main functions
of SIDO are classified into
(i) co-ordination
(ii) industrial development
(iii) extension
These functions are performed through a national network of institutions and associated agencies
crated for specific functions at present. The SIDO functions through 27 offices, 31 small industries
Service Institutes (SISI), 37 extension Centres, 3 product-cum-process Development Centres, and 4
production centers.
All small scale industries expect those failing within the specialized boards and agencies like KVIC,
coir Boards, Central Silk Board etc. fall under the purview of the SIDO.
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3. On the basis of other Variants:- Init Ind. Estates classified into following types:-
(a) Ancillary Industrial Estates:- In such Industrial Estates, only those small-scale units are housed which
are ancillary to a particular large industry. Like HMT, Banglore.
(b) Functional Industrial Estates: - Ind. Units manufacturing the same products are usually housed in these
Industrial estates. These Industrial estates also serve as a base for expansion of small units into larger units.
(c ) The Workshop Bay:- Such types of Industrial estates are constructed mainly for very small firms
engaged in repair work.
Objectives of Industrial Estates:-
i. To provide infrastructure and accommodation facilities to the entrepreneurs.
ii. To encourage the development of small-scale industries in the country.
iii. To decentralize industries to the rural and backward areas.
iv. To encourage ancillarisation I surrounding major Industrial units, and
v. To develop entrepreneurship by creating a congenial climate to run the industries in these areas.
Industrial Estates in India:- One of the major handicaps faced by small scale industries in India has been
either lack or insufficient infrastructure facilities. In order to provide small-scale unit6s the readymade
buildings/ factory sheds at subsidies rates, infrastructure facilities and the proximity of other industrial units,
the idea of establishing, industrial estates was first adopted in India by the small-scale Industries Board at its
meeting help in January 1955. As a result, the first Industrial estate in India was set up at RajKot, in Gujrat in
September 1955. Since then, there is no looking back. By now, the number of industrial estates in the
country had gone upto more than 650. Making it to largest programme of its king in the world.
Specialized Institutions:-
In addition to the above institution, the government has also set up the following specialized institutions to
boost the growth of all types pf small-scale industries in the country:
(1) Central Institute of Took Design, Hyderabad:- The central government set up this Institute in 1968 with
the help of UNDP and ILO to help small-scale industries by imparting specialized training to the personnel
working in the design and manufacture of tools, jigs, fixtures, dies and moulds. The other functions
performed by it are:
(a) To offer consultancy and advisory services and assistance in the design and development of tools.
(b) To suggest proper measures to improve the standard of tools, tooling elements, jig components, fixtures,
dies etc.
(c ) To offer the needed tool room facility.
(2) Central tool room training center:- In order to provide tool room services and facilities in design,
manufacture and training the Government has set up four tool room training centers located at Banglore,
Calcutta, Ludhiana and New Delhi.
(3) Central Institute of Hand tool, Jalandhar:- This institute has been set up with a view to provide
improved technology, raw materials design and testing for handloom industry. This is the only institute of its
kind in the country located at Jalandhar.
(4) Institute for design of Electrical measuring Instruments, Mumbai:- This institute was set up in 1969
with the assistance from UNDP. It was set up to provide technical consultancy services in the matters
relating to design and development of electrical and electronic instruments, tool designing and fabrication
and training.
(5) National Institution of Entrepreneurship and small business development, New Delhi: - It is an
apex national level institute of its kind set up at New Delhi, 1983. Its main functions are to coordinate
research and training in entrepreneurship development and to impart specialized training to various
categories of entrepreneurs.
(6) National Institute of Small Industries Extension Training, Hyderabad:- This institute was set up in
1956 to develop the required manpower for running small scale industries in the country. Accordingly, its
main functions are:-
(a)To impart training to the persons engaged in small-scale industries.
(b)To undertake research studies relating to development of small scale industries.
(c )To enter into agreements to provide consultancy services to small industries in the country.
(7) Other Institutes:- Following are some of the important institutes set up by the Government for
development of small scale industries:-
(a) Electronic Training and service Institute, Nanital
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