Who is an entrepreneur?

  • A person who brings in overall change through innovation for the maximum social good.
  • Is a visionary and an integrated man with outstanding leadership qualities
  • An urge to exercise power over things and objects is an intrinsic quality of an entrepreneur
  • He is the key person who envisages new opportunities, new techniques, new lines of production, new products and coordinates all other activities.
  • Word entrepreneur is derived from the French word “Entreprendre” which means to undertake

Functions of entrepreneurs

  • Idea generation
  • Determination of objectives
  • Raising of funds
  • Procurement of raw materials
  • Procurement of machinery
  • Market research
  • Determination of form of enterprise
  • Implementation of the project

Classification of entrepreneurs

  • Business entrepreneurs
  • Trading entrepreneurs
  • Industrial entrepreneurs
  • Corporate entrepreneurs
  • Agriculture entrepreneurs
Business entrepreneur
  • Individuals who conceive an idea for a new product or service and then create a business to materialize their idea into reality.
  • Tap both production and marketing resources
  • May set up a big establishment or small business unit
Trading entrepreneur
  • Undertakes trading activities and is not concerned with the manufacturing work.
  • Identifies potential markets, stimulates demand for the product line and creates a desire and interest among buyers.
  • Engaged in both domestic and overseas trade
Industrial entrepreneur
  • A manufacturer who identifies the potential needs of customers and tailors products or services to meet the needs.
  • Product oriented man who starts in an industrial unit
  • Has the ability to convert economic resources and technology into a considerably profit venture
Corporate entrepreneur
  • A person who demonstrates his innovative skill in organizing and managing a corporate undertaking
  • An individual who plans, develops and manages a corporate body
Social entrepreneur
  • One who recognizes the part of the society which is stuck and provides new ways to get it unstuck.
  • Need to make a difference, to change society
  • They introduce new solutions to societal problems
Professional entrepreneur
  • A person who is interested in establishing a business but does not have interest in managing or operating it once it is established.
  • He sells out the running business and starts another venture with the sales proceeds

Types of Entrepreneurs

Depending upon the level of willingness to create innovative ideas, there can be the following types of entrepreneurs:
1. 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 retailing by Kishore Biyani, 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. 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.

Characteristics of entrepreneurs

  • Hard work
  • Business Acumen and sincerity
  • Prudence
  • Achievement motivation
  • Self reliance and Independence
  • Highly optimistic
  • Keen Foresight
  • Maintenance of public relations

Important of Entrepreneurs

Entrepreneurs Create New Businesses
    Path breaking offerings by entrepreneurs, in the form of new goods & services, result in new employment, which can produce a cascading effect or virtuous circle in the economy. The stimulation of related businesses or sectors that support the new venture add to further economic development.
Entrepreneurs Add to National Income
    Entrepreneurial ventures literally generate new wealth. Existing businesses may remain confined to the scope of existing markets and may hit the glass ceiling in terms of income. New and improved offerings, products or technologies from entrepreneurs enable new markets to be developed and new wealth created.
Entrepreneurs Also Create Social Change
    Through their unique offerings of new goods and services, entrepreneurs break away from tradition and indirectly support freedom by reducing dependence on obsolete systems and technologies. Overall, this results in an improved quality of life, greater morale and economic freedom.
Community Development
    Entrepreneurs regularly nurture entrepreneurial ventures by other like-minded individuals. They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures.

Entrepreneurs Vs Professional managers

Entrepreneur

  • Owner
  • Profit
  • Full risk bearing
  • All functions
  • Innovator

Manager

  • Servant
  • Salary
  • No risk bearing
  • Managerial functions
  • Executor

Entrepreneur Vs Intrapreneur

Entrepreneur

  • Independent
  • Need not be highly educated
  • Fund raising
  • Risk bearing
  • Routine work
  • Operation from outside
  • Strong authoritarian

Intrapreneur

  • Dependent
  • Highly educated
  • No fund raising
  • No risk bearing
  • Specialist
  • Operation from inside
  • Less authoritarian

Women entrepreneur

  • “Women who innovate initiate or adopt business actively are called women entrepreneurs.” J. Schumpeter
  • “Women entrepreneurship is based on women participation in equity and employment of a business enterprise.”

Factors influencing women entrepreneurs

  • Pull Factors: factors which encourage women to become entrepreneurs. Includes: desire to do something new in life, need for independence, availability of finance, concessions and subsidies.
  • Push factors: factors which compel women to become entrepreneurs. Includes: unfortunate family circumstances, financial difficulties, responsibility in the family.

Classification of Women entrepreneur

  • Chance entrepreneur: Start business without any preparation, clear goals or plans. They happen to grab the opportunity which they come across.
  • Natural entrepreneur: They take business as a profession on their own by self planning or motivated through profit factor and also keeping themselves busy.
  • Created entrepreneurs: These entrepreneurs are encouraged and trained through specialized training programmes such as EDP to set up their own industrial units.
  • Forced entrepreneurs: women who are compelled by circumstances to take over the existing business are called forced entrepreneurs.

Problems of women entrepreneurs

  • No independence
  • Social attitude
  • Low literacy
  • Low risk bearing capacity
  • Dual responsibility
  • Financial constraints
  • Marketing problem
  • Limited mobility

Concepts of MSME and Its grwoth in India

    Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. They also play a key role in the development of the economy with their effective, efficient, flexible and innovative entrepreneurial spirit. The MSME sector contributes significantly to the country’s manufacturing output, employment and exports and is credited with generating the highest employment growth as well as accounting for a major share of industrial production and exports. They have unique advantages due to their size; they have comparatively high labor-capital ratio; they need a shorter gestation period; they focus on relatively smaller markets; they need lower investments; they ensure a more equitable distribution of national income; they facilitate an effective mobilization of resources of capital and skills which might otherwise remain unutilized; and they stimulate the growth of industrial entrepreneurship. The MSME sector in India is highly heterogeneous in terms of the size of the enterprises, variety of products and services, and levels of technology. It complements large industries as ancillary units and contributes enormously to the socioeconomic development of the country.
    The MSME sector is an important pillar of Indian economy as it contributes greatly to growth of Indian economy with a vast network of around 30 million units, creating employment of about 70 million, manufacturing more than 6000 products, contributing about 45% to manufacturing output and about 40% of exports, directly and indirectly. This sector even assumes greater importance now as the country moves towards a faster and inclusive growth agenda. Moreover, it is the MSME sector which can help realize the target of proposed National Manufacturing Policy of raising the share of manufacturing sector in GDP from 16% at present to 25% by the end of 2022. The present paper is an attempt to focus the present status of performance of MSMEs in India & highlights the major challenges for growth of MSMEs and initiatives taken to solve the constraints by both government level and institutional level.

Key Challenges Faced By the MSME Sector

  • Lack of availability of adequate and timely credit
  • High cost of credit
  • Collateral requirements
  • Limited access to equity capital
  • Procurement of raw material at a competitive cost
  • Problems of storage, designing, packaging and product display
  • Lack of access to global markets
  • Inadequate infrastructure facilities, including power, water, roads, etc
  • Low technology levels and lack of access to modern technology
  • Lack of skilled manpower for manufacturing, services, marketing, etc
  • Multiplicity of labour laws and complicated procedures associated with compliance of such laws.

Entrepreneurship environment

  • Refers to various facets within which enterprises- big, medium, small and others have to operate.
  • Entrepreneurial environment is classified into six important segments namely Political environment, economic, social, technological, legal and cultural environment

Economic environment

  • It encompasses a wide spectrum of items- land, availability of raw material, skilled labour, infrastructure, machinery, capital etc

Social environment

  • Factors can be family back ground, Kith and kin, religion, social status and social mobility.

Technological environment

  • Technology represents the application of scientific knowledge for practical purpose.
  • Technological advancement has become catalytic agent in the promotion of entrepreneurship growth.

Legal environment

  • There are various rules and regulations applicable to different groups of industries for various purposes.
  • Some of them are registration, licensing, pollution, location, payment of wages and labour related laws, laws relating to product, patent, resource and taxes.

Entrepreneurship development Programmes

ED programmes are designed to help a person in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his entrepreneurial role effectively.

Appropriate design of EDP

  • EDP broadly envisages a three tiered approach:
  • Developing achievement motivation and sharpening of entrepreneurial traits and behaviour
  • Project planning and development and guidance on industrial opportunities, incentives and facilities and rules and regulations
  • Developing managerial and operational capabilities

Objectives of EDP

  • To accelerate the process of entering into a business for those who come from business families
  • To develop and strengthen the entrepreneurial competencies of prospective entrepreneurs
  • To provide help in identification and formulation of viable projects
  • To arrange support systems about process and procedures for setting up an enterprise

Phases of EDP

  • Pre- training phase
  • Training phase
  • Post training phase

Pre-training phase

  • The preparations required to launch a programme come under this.
  • Creation of infrastructure for training
  • Preparation of training syllabus
  • Tie- up with faculty for training purpose
  • Selection of necessary tools and techniques to select suitable entrepreneurs
  • Formation of selection committee for selecting candidates
  • Arrangement for publicity media and campaigning for the programme
  • Survey of opportunities available in the given environmental conditions
  • Selection of potential entrepreneurs
  • Arrangement for inauguration of the programme

Training phase

  • Training programme is launched
  • The objective of the training programme is to enable participants to do a self study
  • The participants have to be exposed to agencies like DIC, local banks and other financial institutions
  • Industrial visits

Post training

  • Preparing and maintaining a separate file for each trainee
  • Keeping in touch with every participants through letters
  • Contact the entrepreneurs by personal visits
  • Conduct follow up meetings and maintain follow up register to ensure the success of the EDP

Institutional support to small and medium enterprises

CENTRAL GOVERNMENT INSTITUTES
 
SMALL SCALE INDUSTRIES BOARD

Established in 1954 to provide effective coordination and inter-institutional linkages for the benefit of small scale sector.

It consists of the following members:

  • Union Industry Minister
  • State Industry Minister
  • Selected members of Parliament
  • Secretaries of department concerned

Financial Institutions

Selected Public Enterprises

 Industry Associations

Eminent experts in the field
NATIONAL BANK FOR AGRICULTUREAND RURAL DEVELOPMENT (NABARD)

Services offered by NABARD:

  • Attracting youth to rural non-farm sector.
  • District Industries Rural Project (DRIP).
  • Rural Entrepreneurship Development Programme (REDP).

SMALL INDUSTRIES DEVELOPMENTORGANISATION (SIDO)

Constituted in 1954 to develop support services for promotion of SSS.

Main objectives of SIDO are:

  • To formulate policy for promotion of SSI
  • Provide coordination of policies of state government
  • To collect and disseminate information
  • To provide wide range of extension services through allied institutions
  • To promote facilities for technology upgradation
  • To offer consultancy services

Services Rendered by SIDO:

  • Entrepreneurship development and Management training
  • Efforts for skill development.
  • Preparation of feasibility reports for different products.
  • Provision of testing services. Availability of tool room facilities.

NATIONAL SMALL INDUSTRIESCORPORATION (NSIC)

Set up by government of India in 1955.

Main functions are

  • Supply of machinery and equipment.
  • Provision of financial assistance.
  • Assistance for arrangement of raw materials
  • Establishment of technology transfer centers.
  • Arrangement of marketing assistance.
  • Priority in government purchase programme

SMALL INDUSTRIES DEVELOPMENTBANK OF INDIA (SIDBI)

Subsidiary of IDBI, setup as an act of parliament.

Provides assistance for

  • Setting up of new SSI units, small hotels, hospitals and so on
  • Technological upgradation and modernization, expansion and diversification.
  • Quality upgradation.
  • Development of markets.
  • Development of infrastructure.
  • Discounting of bills of manufacturer-seller in selling either equipments or components.

STATE GOVERNMENT INSTITUTES

Startup village

  • Startup Village is a technology business incubator in Kochi and it is India’s first incubator that is funded jointly by the public and private sector.
  • Startup Village is a platform aimed at encouraging students and youth to become entrepreneurs.
  • Attracted over 5,000 applications and incubated more than 800 startups, of which 256 are student startups.
  • The promoters of Startup Village are Department of Science and Technology, Government of India, Technopark Trivandrum and MobME Wireless.
  • Kris Gopalakrishnan, co-founder of Infosys and the most successful IT entrepreneur from Kerala, is the chief mentor at Startup Village
  • Startup Village aims to launch 1,000 start-ups over the next 10 years and start the search for the next billion-dollar Indian company.
  • Objective: We will create an ecosystem that promotes innovation and provides a platform for youngsters to create cutting-edge technology. Our focus is on student start-ups and telecom innovation.

Technopark Technology Business Incubator (T-TBI), Kerala

  • Established in 2006 with the support of the Government of Kerala, T-TBI offers fully furnished working spaces spread over 15,000 sq.ft, expert opinions and guidance from the industry, marketing and legal management consultancy and financial assistance.
  • T-TBI has till date successfully incubated about 60 companies and has had a 92 percent success rate.
  • In early 2011, T-TBI was chosen as the world’s best software incubating company and the first Indian organization to have achieved this status.
  • Unlike other business incubators, Technopark TBI is unique in itself because of its novelty in spreading techno-entrepreneurship among the students and innovators.
  • Technopark TBI is the pioneer in introducing and organizing various programmes like Technopreneur workshops, Entrepreneurship Awareness Camps, Entrepreneurship Development Programmes, One-to-one and panel discussions, Software Engineering workshops, online mentoring and networking, TechTop the all India student project competition with highest prize money, Engineering students project exhibitions, Entrepreneurship Development Cells, TBI Extension Centres, Virtual Incubation and Pre-incubation facilities.