ESBM - Unit1

ESBM – UNIT 1
Prepared by:
Komal Gangi
Asst. Professor, TIAS
Entrepreneurship and Small Business Management
UNIT 1
a) Entrepreneurship: Concept and Definitions;
b) Entrepreneurship and Economic Development;
c) Classification and Types of Entrepreneurs;
d) Entrepreneurial Competencies;
e) Factor Affecting Entrepreneurial Growth – Economic,

Non-Economic Factors;
f) EDP Programmes;
g) Entrepreneurial Training;
h) Traits/Qualities of an Entrepreneurs;
i) Entrepreneur; Manager Vs. Entrepreneur.

UNIT 2
Opportunity / Identification and Product Selection:
a. Entrepreneurial Opportunity Search and Identification;
b. Criteria to Select a Product;
c. Conducting Feasibility Studies;

d. Project Finalization;
e. Sources of Information.
UNIT 3 - Small Enterprises and Enterprise Launching

Formalities :
 Definition of Small Scale;
 Rationale; Objective; Scope;
 Role of SME in Economic Development of India;
 SME; Registration; NOC from Pollution Board;
 Machinery and Equipment Selection;
 Project Report Preparation; Specimen of Project

Report;
 Project Planning and Scheduling using Networking
Techniques of PERT / CPM; Methods of Project
Appraisal.
UNIT 4 -Role of Support Institutions and Management

of Small Business:
 Director of Industries; DIC;
 SIDO;
 SIDBI;
 Small Industries Development Corporation (SIDC);

SISI; NSIC; NISBUED; State
 Financial Corporation SFC; Marketing Management;
Production Management; Finance Management;
 Human Resource Management; Export Marketing;
Introduction
 The entrepreneurship is usually understood with
reference to individual business.
 Entrepreneurship has rightly been identified with the
individual, as success of enterprise depends upon
imagination, vision, innovativeness and risk taking.
 The production is possible due to the cooperation of the
various factors of production, popularly known as land,
labor, capital, market, management and of course
entrepreneurship.
 The entrepreneurship is a risk taking factor, which is
responsible for the end result in the form of profit or
loss.
Introduction
 According to A Schumpeter
“The entrepreneurship is essentially a creative activity or it

is an innovative function”.
 According to Cantillon,
“An entrepreneur is the agent who buys factors of
production at certain prices in order to combine them into
a product with a view to sell it at certain prices in future.”
Introduction
According to J. B. Say,
 “An entrepreneur is the economic agent who unites all
means of production – land of one, labor of another and
the capital of yet another and thus produces a product.
By selling the product in the market he pays rent of
land, wages to labor, interest on capital and what
remains is his profit.”
According to Joseph Schumpeter,

 “An entrepreneur is an innovator who brings economic
development through new combination of factors of
production.”
 To conclude: an Entrepreneur can be defined as an

individual or a group of individuals who tries to create
something new, who organizes production and
undertakes risk involved in the establishment and
operation of a business enterprise.
 To conclude: an Entrepreneur can be defined as an

individual or a group of individuals who tries to create
something new, who organizes production and
undertakes risk involved in the establishment and
operation of a business enterprise.
Some more definitions of Entrepreneur
 Entrepreneurship is the act of being an entrepreneur,

which is a French word meaning "one who
undertakes innovations, finance and business acumen
in an effort to transform innovations into economic
goods.”
 An entrepreneur is a person who has possession of a
new enterprise, venture or idea and assumes significant
accountability for the inherent risks and the outcome.
The term is originally a loanword from French and was
first defined by the Irish economist Richard Cantillon.
Some more definitions of Entrepreneur
 entrepreneur - someone who organizes a business

venture and assumes the risk for it
 One special form of human capital that is important in
an economic setting is entrepreneurship (often thought
of as the fourth factor of production).
 Entrepreneur - An innovator of business enterprise who
recognizes opportunities to introduce a new product, a
new process or an improved organization, and who
raises the necessary money, assembles the factors for
production and organizes an operation to exploit the
opportunity.
What is Entrepreneurship?
 Entrepreneurship is more than simply “starting a

business.”
 The definition of entrepreneurship is a process through
which individuals identify opportunities, allocate
resources, and create value.
 This creation of value is often through the identification
of unmet needs or through the identification of
opportunities for change.
 Entrepreneurship is the propensity of mind to take
calculated risks with confidence to achieve a pre-
determined business or industrial objective. In
substance, it is the risk taking ability of the individual,
broadly coupled with the correct decision-making.
 Entrepreneur – Person
 Entrepreneurship – Process
 Enterprise -Object
Entrepreneur Intrapreneur
An Entrepreneur is someone who has An Intrapreneur is someone

the skills, passion and financial backing who manages that business with
to create wealth from new business entrepreneurial flare in line with the
opportunities and is willing to take full expectations of the shareholders.
responsibility for its success or failure.
The Entrepreneur is typically a The Intrapreneur has passion and drive

visionary who spots an opportunity in but also has the operational skills of
the marketplace and has the passion, running the “clockwork” of the business
zeal and contact base to set the wheels to enable a good idea to be turned into
in motion. commercial reality. He is the “inside
entrepreneur”
But every business needs an
Intrapreneur.
The seed of a business idea needs an Entrepreneur needs the Intrapreneur to

Entrepreneur to shape and cultivate it pluck from his grasp those seeds of
opportunity, convert them in to a viable
commercial plan and then manage that
plan to a profitable reality.
Without the intrapreneur, ideas,

entrepreneurs and small business are
doomed to fail.
An entrepreneur takes substantial An intrapreneur is an individual
risk in being the owner and operator employed by an organization for
of a business with expectations of remuneration, which is based on the
financial profit and other rewards financial success of the unit he is
that the business may generate. responsible for.
Without the intrapreneur, ideas,

entrepreneurs and small business are
doomed to fail.
Effective leadership in small business: The

Intrapreneur- Written by Steve Winduss
An Intrapreneur ………
 wholeheartedly embraces the entrepreneur’s vision
for the company
 earns respect, not demand it
 energises and excites people
 is prepared to admit when he is wrong
 listens to others’ ideas and opinions and takes

action on them
 recognises the boundaries of his own capabilities
 is consistent
 exudes positivity from every pore
 never brings domestic crises to work with him
 is prepared to take risks
 defaults to saying “we”, not “I”
 exhibits positive attributes such as fairness,

integrity, compassion, loyalty
 understands the full spectrum of business activities
 makes consistently good business decisions

 deflects praise onto his team
 is a good time manager
 is not afraid to ask for help
 naturally attracts trust and loyalty
 believes in the carrot, not the stick
 makes sacrifices without hesitation

Traits / Qualities of an Entrepreneur or
Entrepreneurial Competencies
1. Leadership qualities - must be able to lead his or her
staff members as well as other associates
2. Decisive - must not get influenced by others. They
should be able to take decisions independently
3. Risk-taking
4. Confident – Self-image is enhanced, when one is
confident.
5. Willingness – A businessman must be willing to
undertake any matters concerning their business
venture.
 Enterprising – One has to be enterprising in order to
achieve significant results in business. He or she has to
have the zeal to do things. A laid- back approach will
not help.
 Innovative – New ideas help make a business venture

successful. A successful businessman or woman must
be innovative and always strive for something better.
New concepts must be formulated and new ways of
doing business must be thought of.
Entrepreneurship Development Institute of India (EDI)
conducted a research and identified the following traits of
an entrepreneur:
 Initiation
 Watching for opportunities (vision and foresightedness)
 Information seeker
 Quality conscious
 Commitment to work
 Efficiency lover
 Proper planning
 Self confidence
 Assertiveness
 Persuation
 Effective monitoring
 Concern for employees
FACTORS AFFECTING ENTREPRENEURIAL
GROWTH
1. ECONOMIC FACTORS
a) Adequate overhead facilities:
- Profitable innovations require basic facilities like
transportation, communication power supply etc.
- They reduce cost of production and increase profit.
b) Capital: Inventions are capital oriented. In less

developed countries most capital equipment have to be
imported which involves foreign exchange which acts as a
difficult problem.
GROWTH
1. ECONOMIC FACTORS
c) Great risk: Risk is high in case of less developed
countries as there is lack of reliable
information, markets for goods and services is small etc.
d) Labor
e) Raw Material
f) Market
GROWTH
2. SOCIAL FACTORS
 A society that is rational in decision making would be
favorable for decision making. Education, research and
training is given less importance in less developed
countries therefore there is very little vertical mobility of
labor.
 Legitimacy of Entrepreneurship
 Social Mobility
 Security
GROWTH
3. CULTURAL FACTORS
 Religious & cultural factors also influence the individual

taking up an entrepreneurial career, in some countries
there is religious and cultural belief that high profit is
unethical.
 This type of belief inhibits growth of entrepreneurship.
GROWTH
4. PERSONALITY FACTORS
 In less developed countries, the entrepreneur is looked
upon with suspicion.
 Public opinion in the less developed nations sees in the
entrepreneur only as a profit maker and exploited.
GROWTH
5. MOTIVATION - Motivation is the act of stimulating
someone or oneself to get a desired course of action, to
push the right button to get the desired results.
MOTIVATING FACTORS
1. Education background
2. Occupational experience
3. Family background
4. Desire to work independently in manufacturing line
5. Assistance from financial institution
6. Availability of technology
7. Governmental Influence
GROWTH
5. MOTIVATION - Motivation is the act of stimulating
someone or oneself to get a desired course of action, to
push the right button to get the desired results.
MOTIVATING FACTORS
1. Education background
2. Occupational experience
3. Family background
4. Desire to work independently in manufacturing line
5. Assistance from financial institution
6. Availability of technology
7. Governmental Influence
CAUSES OF SLOW GROWTH OF
ENTREPRENEURSHIP IN INDIA
 1. Caste System: - This decided occupation for
members from each caste. The altitudes were
restrictive and therefore there were no changes of
accumulating wealth and promoting production.
2. Agriculture: -
 Agriculture was the main occupation.
 Farmers and cultivators were always in the clutches of

the money lenders.
 The zamindars, nawabs and rajahs exploited the
laborers.
 They spent money on enjoyment and luxury and never
risked money in industry.
 Banking and commercial system was also absent so
even if there were savings, they could not be utilized for
productive use.
3. Educational System: -
 Talented young men were prepared to take white
collared jobs or join government or professional
services.
 Many were attracted towards politics.
 The result was that very few young men got attracted
towards becoming efficient, industrialists, technicians,
managers etc.
4. Colonial Rules: -
 The British rulers adopted discriminatory policy
 Rich Indian businessman had special connections with

foreign rulers and both satisfied their self interests.
 Even the few insurance and banking services catered to
the needs of some rich Indian businessman, Britishers
in India did also not encourage Industrialization.
5. Managing Agents: -
 There were just a handful of people who were known to
be having managerial skills.
 On common basis, these agents would lend their skills
to some top industries.
 Industrialists could not manage their own units.
 They were always at the mercy of the managing agents

who filled their pockets with big chunks of the
companies’ profits and took full advantage of Indian
industrialists till the managing agency system was
abolished in 1970.
6. Joint Family System: -
 Younger members of the family always depended on
the Head who never gave any kind of independence or
encouraged units other than family business ones.
 A number of young men were discouraged from
diversifying from family business and doing something
new and different.
7. Religious attitude: -
 Indians were very religious minded.
 They gave more time to religion than to earning material

wealth.
 Religion got priority over business.
 Some religions even condemned excess earnings and

indulgence in comforts.
 Industrial activity was, therefore, given secondary
consideration by the religious Indians.
8. Mindset: -
 The mindset of the average Indian was never
entrepreneurial.
 Our religious literature and epics told us to have
patience and to keep on working without expecting the
fruits of labor.
 This also killed the drive and desire to get into
entrepreneurial activities.
9. Recognition by the society: -
 In earlier days, the heroes India were the social
reformers and the politicians.
 Now it is the era of sportsmen, models and film stars.
 It is sad that successful or the struggling entrepreneurs

have never been recognized as heroes.
 Entrepreneurial activity did not get due importance in
the India society.
10. Family Background: -
 Empirical studies have shown that a good number of
entrepreneurs come from families with industrial
backgrounds.
 Unfortunately, only a few entrepreneurial communities
in India made entrepreneurial contribution.
 These communities could also not make headway in
the entrepreneurial field on account of the colonial rule,
lack of infrastructure and other facilities.
 Entrepreneurship development could only take place
after independence in India.
Entrepreneur and Manager
Basis Entrepreneur Manager

An entrepreneur sets up a new A manager does not take a new
enterprise or undertakes a venture for venture and renders services in an
Venture his personal gratification. existing enterprise.
An entrepreneur assumes risk of A manager does not assume or share

economic uncertainty involved in the any risk.
Risk Bearing enterprise.
The reward of an entrepreneur for his The reward for a manger for
risk bearing role is profits. Its not only rendering his services is salary which
Reward uncertain and irregular but at time unlike profit is fixed and regular.
negative also.
Entrepreneurial activities are Managerial activities are mainly

discontinuous appearing to initiate continuous involving an on-going
Contintuity changes in the production process and coordination of business activities.
then disappearing utile the change is
initiated.
Entrepreneur and Manager
Basis Entrepreneur Manager
Innovation In order to maximize the profits, A manager keeps running the

the entrepreneur applies enterprise on already
innovation from time to time. An established lines on a routine
entrepreneur is a change agent. basis.
Status-role An entrepreneur is his own boss A manager is a salaried

and enjoys an independent person serving the enterprise
status as the owner of the of some one else i.e.
enterprise entrepreneur.
Prerequisite An entrepreneur needs A manager needs distinct

s prerequisites like mission, qualifications such as
creative thinking and risk knowledge of human behavior,
bearing etc. management theory etc.
Types of Entrepreneurs
Types of
Entrepreneurs
Type of Use of Growth Others

Motivati Stages
Busines Technol
on in
s ogy
Develo
pment
Type of business
 Business entrepreneur:
Convert ideas into reality; deal with both manufacturing and trading
aspect of business (Small trading and manufacturing business)
 Trading entrepreneur: Undertakes trading activities; concerned

with marketing (Domestic and international level)
Type of business
 Industrial entrepreneur: Undertakes manufacturing activities only;

new product development etc (textile, electronics, etc)
 Corporate entrepreneur: Interested in management part of

organisation; exceptional organising, coordinating skills to manage a
corporate undertaking (Ambani, Tata families)
 Agricultural entrepreneur: Production and marketing of agricultural

inputs and outputs (Dairy, horticulture, forestry)
Use of Technology
 Technical entrepreneur: Production oriented, possesses

innovative skills in manufacturing, quality control etc.
 Non technical entrepreneur: Develops marketing, distribution

facilities and strategies
 Professional entrepreneur: Uses the proceeds from sale of one

business to start another one. Brimming with ideas to start new
ventures
Motivation
 Pure entrepreneur: Psychological and economic rewards motivate

him
 Induced entrepreneur: Incentives, concessions, benefits offered by

government for entrepreneurs motivates him
 Motivated entrepreneur: Sense of achievement and fulfillment

motivate him
 Spontaneous entrepreneur: Born entrepreneurs with inborn traits

of confidence, vision, initiative.
Growth
 Growth entrepreneur: One who enters a sector with a high growth
rate; is a positive thinker
 Super growth entrepreneur: One who enters a business and

shows a quick, steep and upward growth curve
Stages in Development
 First generation entrepreneur: Innovator, risk taker, among the

firsts in family to enter business
 Modern entrepreneur: Who considers feasibility of business, which

can adapt to change and dynamic market
 Classical entrepreneur: One who gives more importance to

consistent returns than to growth; concerned about customer and
marketing needs
Others
 Area- Rural and Urban entrepreneur

 Gender/Age- Men and Women entrepreneur
 Scale- Small and Large scale entrepreneur
Depending upon the level of willingness to create innovative

ideas, there can be the following types of entrepreneurs:
 Innovative entrepreneurs:
 These entrepreneurs have the ability to think newer, better and more
economical ideas of business organisation and management.
 They are the business leaders and contributors to the economic
development of a country.
 Inventions like the introduction of a small car ‘Nano’ by Ratan Tata,
organised, making mobile phones available to the common may by
Anil Ambani are the works of innovative entrepreneurs.
 2. Imitating entrepreneurs:
 These entrepreneurs are people who follow the path
shown by innovative entrepreneurs.
 They imitate innovative entrepreneurs because the
environment in which they operate is such that it does
not permit them to have creative and innovative ideas on
their own.
 Such entrepreneurs are found in countries and situations
marked with weak industrial and institutional base which
creates difficulties in initiating innovative ideas.
 2. Imitating entrepreneurs:
 In our country also, a large number of such
entrepreneurs are found in every field of business
activity and they fulfill their need for achievement by
imitating the ideas introduced by innovative
entrepreneurs.
 Development of small shopping complexes is the work of
imitating entrepreneurs. All the small car manufacturers
now are the imitating entrepreneurs.
3. Fabian entrepreneurs:
 The dictionary meaning of the term ‘fabian’ is ‘a person seeking
victory by delay rather than by a decisive battle’.
 Fabian entrepreneurs are those individuals who do not show

initiative in visualising and implementing new ideas and innovations,
wait for some development which would motivate them to initiate
unless there is an imminent threat to their very existence.
4. Drone entrepreneurs:
 The dictionary meaning of the term ‘drone’ is ‘a person who lives on
the labor of others’.
 Drone entrepreneurs are those individuals who are satisfied with the
existing mode and speed of business activity and show no
inclination in gaining market leadership.
 In other words, drone entrepreneurs are die-hard conservatives and

even ready to suffer the loss of business.
5. Social Entrepreneur:
 Social entrepreneurs drive social innovation and transformation in

various fields including education, health, human rights, workers’
rights, environment and enterprise development.
 They undertake poverty alleviation objectives with the zeal of an

entrepreneur, business practices and dare to overcome traditional
practices and to innovate.
 Dr Mohammed Yunus of Bangladesh who started Gramin Bank is a

case of social entrepreneur.
Entrepreneurial Development Programmes
 Entrepreneurial Development Programme (EDP)

designed to help a person in strengthening and fulfilling
his entrepreneurial motive and in acquiring skills and
capabilities necessary for playing his entrepreneurial role
effectively.
 Though EDP has been recognized as an effective

human resource development tool, many a times there
are very many expectations from a single programme,
like removing unemployment, enhancing industrial
development, promoting small-scale industries,
developing industrially underdeveloped regions, etc.
 EDP is primarily meant for developing those first-

generation entrepreneurs, who on their own cannot
become successful entrepreneurs.
 It covers three major variables - location, target group
and enterprise (entrepreneurs activities).
 Any of these can become the focus or starting point for
initiating and implementing an EDP.
 The remaining two then will follow by making proper
synthesis with the first.
 As for example, the objective is to promote women

entrepreneurs, suitable location and proper
entrepreneurial activities must match or if the objective is
to develop North-East region, then the potential target
group and feasible entrepreneurial ventures must follow.
 It is a continuous process of training and motivating then

to set up profitable enterprises in large Design.
 It is now well recognized that entrepreneurs can be

development through appropriately designed
entrepreneurship development programmers.
Misconceptions about EDP
 Misconceptions about EDP:

Many a time an impression is created that joining EDP
means assurance of finance, obtaining the required license
for business ventures and availing of the special incentives
 EDP means only Training:

 Any attempt to develop potential entrepreneurs through
classroom training has been treated as EDPs.
 In fact, training is only one of the segments in “ the
process” of developing entrepreneurs.
 The ED process starts from identifying the potential and
right candidates, linking suitable project with each one,
training and development managerial and
entrepreneurial capabilities, counseling and motivating
the entrepreneur and providing the required follow-up
support to help him/her in establishing the venture.
 The whole process extends much beyond “training”.
Much of it is personal counseling and support
 Higher the Number, better the EDP

 EDPs unfortunately have often been linked with
statistical output rather than qualitative results.
 The quantitative dimension has forced manipulations in
EDPs.
 It is taken that an EDP is a success with the maximum
number of participants of responses.
 The quality and impact of the EDP matters more than the
quantitative dimension.
 Strategies to promote a particular target group, the
nature in view ventures go a long way in deciding the
quality and impact of n EDP
 Higher the Number, better the EDP

 EDPs unfortunately have often been linked with
statistical output rather than qualitative results.
 The quantitative dimension has forced manipulations in
EDPs.
 It is taken that an EDP is a success with the maximum
number of participants of responses.
 The quality and impact of the EDP matters more than the
quantitative dimension.
 Strategies to promote a particular target group, the
nature in view ventures go a long way in deciding the
quality and impact of n EDP
 EDP Success is the Sole Responsibility of Trainer-

Motivators
 It is the responsibility of the Trainer-Motivator in most

cases, to conduct the programmes.
 However, many environmental factors challenge his role
as a motivator.
 The trainer alone cannot influence external factors,
which usually come in the way of ‘start-ups’ out of an
EDP.

Motivators
 EDP conducting agencies and the trainers alone cannot

develop entrepreneurs and help them set up their
enterprises since many of her support agencies like
Banks, SFCs, DICs, etc. are also involved to create
better co-ordination and effective linkages with these
agencies.

Motivators
 Such misconceptions prevail amongst EDP trainers or

funding agencies, as also among entrepreneurs.
 We do hope that better awareness and clarity about the

EDP process and strategy will help get EDPs their due
importance and recognition.
Entrepreneurship Development Programme

Motivators
 Such misconceptions prevail amongst EDP trainers or

funding agencies, as also among entrepreneurs.
 We do hope that better awareness and clarity about the

EDP process and strategy will help get EDPs their due
importance and recognition.
OBJECTIVES
 To promote the development of small and medium

enterprises that would encourage self-employment
among potential entrepreneurs;
 To provide, in the rural areas, special programmes

designed that would ventures and encourage expansion
of existing activities of small and medium industries;
 OBJECTIVES
 To generate employment and self-employment

opportunities in the processing of indigenous raw
materials for local consumption and for export;
 To develop entrepreneurial opportunities for potential

entrepreneurs and upgrade managerial skills for existing
entrepreneurs.
 For a sound training programme for entrepreneurship

development in India, the expert constituted by the
NIESBUD accepted that it must be able to help selected
entrepreneurs to:
 Develop and strengthen their entrepreneurial

quality/motivation;
 Analyse environment related to small industry and small
business;
 Select project/product;
 Formulate project;
 Understand the process and procedure of setting up of
small enterprise;
 Know and influence the source of help/support needed

for launching the enterprise;
 Acquire the basic management skills;
 Know the pros and cons of being an entrepreneur; and
 Acquaint and appreciate the needed social
responsibility/entrepreneurial disciplines.
Some of the other important objectives of

entrepreneurial training are:
 To let the entrepreneur set or reset the objectives of his

business and work individually and along with his group
for their realization.
 To prepare him for accepting totally unforeseen risks of
business after such training.
 To enable him to take strategic decisions.
 To enable him to build an integrated team to fulfill the
demands of tomorrow.
 To communicate fast, clearly and effectively.

 To develop a broad vision to see the business as a

whole and to integrate his function with it.
 To enable him to relate his product and industry to the

total environment, to find what is significant in it and to
take it into account in his decisions and action.

 To enable him to copy with and coordinate all relevant

paper work, most of which is statutorily obligatory.
 To make him accept industrial democracy, that is,

accepting workers as partners in enterprises; and
 To strength his integrity, honesty and compliance with

law, the key to success in the long run
Issues of EDPs
 1. Structure and Composition of EDPs:
 The ED programme should have a practical content with

inter-institutional organisational arrangement to make it a
success.
 The successful EDPs have, at their base, the inter-
institutional cooperation or an institution such as Gujarat
Centre of the State Bank of India, which besides having
conducted the programmes has also arranged for
finance and other inputs for the entrepreneurs.
Issues of EDPs
 1. Structure and Composition of EDPs:
 The EDPs conducted in isolation would dissipate

resources and talents.
 The issue, therefore, for effective functioning of EDPs is
to have a financial agency strongly backing up efforts for
entrepreneurial development.
Issues of EDPs
 2. Areas of Operation:
 In North-Eastern Area, entrepreneurial development

activities have not been benefiting from the support
activities of financial institutions. In these areas,
programmes have to be linked with support activities.
Issues of EDPs
3. Fixing Priorities:
 Another area of fixing the priorities of EDPs is to
consider their working in terms of efficiency and social
need criteria.
 Evaluation of EDPs has revealed that those who have
business experience, education and skills are proving
successful entrepreneurs.
 This source should be tapped first and then go to the
stratum to cover entrepreneurs from the non-traditional
class, i.e. without business and industrial experience, but
having the potential of becoming successful
entrepreneurs.
Issues of EDPs
3. Fixing Priorities:
 Next come the entrepreneurs belonging to backward and
other communities who have to overcome many
additional handicaps to become successful
entrepreneurs.
 A proper course content of EDPs has to be developed to
meet the specific requirements of each of these three
strata of entrepreneurs in proper balance, without
sacrificing the efficiency criteria.
Issues of EDPs
4. Lack of Specialists’ Support:

 Entrepreneurship has been an area of study requiring
inter-disciplinary efforts by people from different
disciplines.
 A large number of organisations/agencies engaged in
entrepreneurship development in India to do not have in
the home all the specialists required and have to depend
upon outside faculty.
 The number of specialists available in the country for
developing small-scale industries is not very large.
 As a result, many a time organisations are unable to
locate/avail services of experts..
Issues of EDPs
4. Lack of Specialists’ Support:

 On the other hand, there are specialists who have time
to spare in which they can render their services to the
organisations.
 This apart, the ED Programmes in India are afflicted with
a number of operational problems. As such, though there
are many a institution to train entrepreneurs, the growth
of entrepreneurs is inhibited by these problems. The
operational problems of EDP are as follows:
Issues of EDPs
 • Diverse opinions,
 • No proper strategy,
 • Low institutional commitment,
 • No local support,
 • Non-availability of inputs
 Inherent inability,
 Poor follow-up
 • No adequate research facilities,
 • Ill-planned training methodology,
 • Inconsistent programme design,
Issues of EDPs
 No clear-cut objective,
 Lack of clarity in approach, and
 Lack of creativity and commitment.
Importance of Training
 It makes sure the availability of skilled workers at all

levels of management
 It increases the potential abilities of workers and thus

improves their performance to the maximum attainable
level
 It enable workers to perform the work ore efficiently and

precisely so as to maintain the quality of products
 Training enable the workers to work speedily and thus

increases the earning of employees
 It minimizes excessive scraps, defective outputs and

wastage in the production process
 It minimizes accidents said to be increasing, as unskilled

and semi-skilled workers are more to industrial accidents
 Training reduces fatigue.

 When the speed of production increases, overtime work

can be avoided and therefore, the payment of overtime
does not arise
 A trained worker does not feel the need to join other

factories and thus reduces the labour turnover.
 Training improves the good relations between

employees and management.
 New techniques can be easily adopted through trained

employees.
 Standardisation can be adopted in a factory where

trained employees are available.
 Team spirit and teamwork can be promoted when

employment are fully trained.
 Training enable employees to occupy higher positions of

authority.
 As trained workers do not require any consolation and

because of less spoilage resulting from their
performance, the supervision cost can be minimised.
Objectives of Training
 To impart basic knowledge about the industry, product

and production methods;
 To build the necessary skills of new entrepreneurs and
workers;
 To assist the entrepreneur/ worker to function more
effectively in his present position by exposing him to the
least concept, techniques and information;
 To build up second line of workers and prepare them to
shoulder additional responsibility and/or switch on to the
production of a new product, if there is any
diversification;
Objectives of Training
 To expose the entrepreneur to the latest developments

which directly or indirectly affect him;
 To broaden the vision of entrepreneurs by providing
them suitable opportunities for an interchange of
experiences within and outside an industry;
 To impart customer education;
 To impart knowledge of the marketing of goods;
The Principles of training may be enumerated as
under:
 Training should be given in a proper atmosphere and

that too systematically through duly qualified and trained
instructors.
 Training should be of reasonably long duration so as to

enable the workers to understand the theory and
develop skills for managing the job accurately.
 Training should be given at all levels. This means

training programme of a factory should include induction-
training, job training, training for promotion and refresher
training.
The Principles of training may be enumerated as
under:
 The level of training should be high. It must be

comprehensive and the participant should be made
familiar with the latest trends in production technology.
 Training should consist not only of theory; it should be

supplemented by practical training and made interesting
to all participants.
Methods of Training
 1. Individual instruction: Under this method, a single individual is

selected for training. This mode of training is undertaken where a
complicated skill is to be taught to an individual.
 2. Group instruction: This mode of training is suitable for a group

of individuals with a similar type of work and where general
instructions are applicable to all are to be given.
 3. Lecture method: Here the instructor communication in theory the

practice to be followed by the learners. Under this method, wherever
there are any doubts, they may be clarified on the spot.
Methods of Training
 4. Demonstration method: Where the performance of

work is to be shown practically by the instructor for better
understanding, this method can be followed. This is
more concerned with the practical than theoretical
aspect.
 5. Written instructional method: The medium of

training is followed where a suture reference is to be
made by the learners. This method is mostly followed
where a standardized production system is followed.
Methods of Training
 6. Conference: Conferences are frequently organize wherein

experts in the field share their ideas and bring to the notice of
learners new ideas and techniques to increase production.
 7. Meeting: Meetings are a mode of training involving a group of

people who discuss the various problems confronting them. They
involve exchange ideas and views and later on, coming to a firm
conclusion based on the various proposals and alternatives.

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ESBM – UNIT 1

b) Entrepreneurship and Economic Development;

c) Classification and Types of Entrepreneurs;

e) Factor Affecting Entrepreneurial Growth – Economic,

i) Entrepreneur; Manager Vs. Entrepreneur.

b. Criteria to Select a Product;

c. Conducting Feasibility Studies;

UNIT 3 - Small Enterprises and Enterprise Launching

 Rationale; Objective; Scope;

 Role of SME in Economic Development of India;

 SME; Registration; NOC from Pollution Board;

 Machinery and Equipment Selection;

 Project Report Preparation; Specimen of Project

UNIT 4 -Role of Support Institutions and Management

 Small Industries Development Corporation (SIDC);

“The entrepreneurship is essentially a creative activity or it

According to Joseph Schumpeter,

 To conclude: an Entrepreneur can be defined as an

 To conclude: an Entrepreneur can be defined as an

 Entrepreneurship is the act of being an entrepreneur,

 entrepreneur - someone who organizes a business

 Entrepreneurship is more than simply “starting a

An Entrepreneur is someone who has An Intrapreneur is someone

The Entrepreneur is typically a The Intrapreneur has passion and drive

The seed of a business idea needs an Entrepreneur needs the Intrapreneur to

Without the intrapreneur, ideas,

Without the intrapreneur, ideas,

Effective leadership in small business: The

 energises and excites people

 is prepared to admit when he is wrong

 listens to others’ ideas and opinions and takes

 exudes positivity from every pore

 never brings domestic crises to work with him

 is prepared to take risks

 defaults to saying “we”, not “I”

 exhibits positive attributes such as fairness,

 makes consistently good business decisions

 is a good time manager

 is not afraid to ask for help

 naturally attracts trust and loyalty

 believes in the carrot, not the stick

 makes sacrifices without hesitation

 Innovative – New ideas help make a business venture

 Watching for opportunities (vision and foresightedness)

b) Capital: Inventions are capital oriented. In less

 Religious & cultural factors also influence the individual

4. Desire to work independently in manufacturing line

5. Assistance from financial institution

4. Desire to work independently in manufacturing line

5. Assistance from financial institution

 Farmers and cultivators were always in the clutches of

 Rich Indian businessman had special connections with

 They were always at the mercy of the managing agents

 They gave more time to religion than to earning material

 Some religions even condemned excess earnings and

 It is sad that successful or the struggling entrepreneurs

Basis Entrepreneur Manager

An entrepreneur assumes risk of A manager does not assume or share

Entrepreneurial activities are Managerial activities are mainly

Basis Entrepreneur Manager

Innovation In order to maximize the profits, A manager keeps running the

Status-role An entrepreneur is his own boss A manager is a salaried

Prerequisite An entrepreneur needs A manager needs distinct