INRODUCATION TO THE COMPANY

1 Definition of Start-up:
A Start-up company or start-up or start-up is a young company that is just beginningto develop.
Start-ups are usually small and initially financed and operated by ahandful of founders or one
individual. These companies offer a product or service that is notcurrently being offered
elsewhere in the market, or that the founders believe is being offered inan inferior manner. In the
early stages, start-up companies’ expenses tend to exceed theirrevenues as they work on
developing, testing and marketing their idea. As such, they oftenrequire financing. Start-ups may
be funded by traditional small business loans from banks orcredit unions, by government
sponsored Small Business Administration loans from local banks,or by grants from non-profit
organizations and state governments.Paul Graham says that “A start-up is a company designed to
grow fast. Being newly foundeddoes not in itself make a company a start-up.
Nor is it necessary for a start-up to work ontechnology, or take venture funding, or have some
sort of “exit”. The only essential thing isgrowth. Everything else we associate with start-ups
follows from growth.”1.2 Start-up India: Startup India is an initiative of the Government of
India.The campaign was first announced by Indian Prime Minister, Narendra Modi during his
15August 2015 address from the Red Fort, in New Delhi. The action plan of this initiative, is
basedon the following three pillars:1. Simplification and Handholding.2. Funding Support and
Incentives.3. Industry-Academia Partnership and Incubation.An additional area of focused
relating to this initiative, is to discard restrictive StatesGovernment policies within this domain,
such as License Raj, Land Permissions

Foreign Investment Proposals, and Environmental Clearances. It was organized by

TheDepartment for promotion of industry and internal trade(DPI&IT). A startup defined asan
entity that is headquartered in India, which was opened less than seven years ago, and has
anannual turnover less than 25crore (US$3.5 million). Under this initiative, the government
has₹already launched the I-MADE program, to help Indian entrepreneurs build 1 million mobile
appstart-ups, and the MUDRA Banks scheme (Pradhan Mantri Mudra Yojana), an initiativewhich
aims to provide micro-finance, low-interest rate loans to entrepreneurs fromlow socioeconomic
backgrounds. Initial capital of200 billion (US$2.8 billion) has been allocated for this scheme.
 The start-up scenario in India has gone a huge makeover, now people are not alien with the
concept of start-ups. Earlier people had no idea what this concept is all about, thanks to the rise
in media’s encouraging coverage towards start-ups recently. The concept ofstart-up is somehow
different for Indians and not so different for people of developedeconomies. Start-ups are
something to do with new product/process for the entire market orfraction of the market. Start-
ups must not be confused with small business, as the biggest difference being is INNOVATION.
Recently government of India haslaunched “Start-up India” initiative to foster/support and
encourage start up efforts in India.The results are very satisfactory with initiative being accepted
with open arms in country,various state governments have also started the similar efforts. India
stand at avery important cross road, India stood at number three in overall technology driven stat
ups in the world (Top two positions are held by USA and UK respectively). The very nature of
start-upsin India is technology based which is fuelled by young IIT’s graduates as the patterns
ofstart-ups in India further suggests, they are undertaken in very unconventional terrain
likemedical etc. The important question remains is, how start-ups are shaping the very structure
ofeconomy in India or else where (In similar economies). The overall impact of start-ups is
veryvisible initially then, only those ideas persist which are smartly implemented. In
Indiagovernment is constantly trying to create an environment which is both conducive and
optimumfor start ups. The reason is very simple, start-ups are necessary for the entrepreneurial
andinnovative growth of any nation. There are nations which are smaller than ours and
lessnaturally equipped than ours, but made tremendous growth and advancements in the field
ofeconomy and overall development. The secret of their success is nothing but an appetite
forinnovation. If India wants to be in the front lines with developed nations in the world,
innovationis the key to become so. Fortunately, India is endowed with youngest populationwhich
is primarily required for setting up start-ups. With the growing inclination towards“Having
something of my own” attitude is also helping in bringing new ideas intosuccessful
implementation. India has produced some of the leading start-ups in the world, whichare
working as the lighthouse for the rest. The prominent example being OYO Rooms andZomato
(both catering to a very different market segment and objectives). In short, the start-upscenario is
looking very convincing and bright as the investments is growing in India start-upsfrom
worldwide investing bodies both organized and individuals. The recent example of such
Investment being the huge multibillion-dollar investments in various start-ups functioning
inIndia like Ola and Flipkart. In a way start up era has started in India and it is the time to give
itsdue push.As it is a known fact that when someone starts a new enterprise or tries to get
intoentrepreneurship, they face many problems like finance, land permissions,environmental
clearance, foreign investment proposals, family support etc. It is one of the much-needed
initiative plans of Govt of India. This initiative focuses on filling the gap in the economyand its
development and has the objective to fire the entrepreneurial blood at the bottomlevel. It has
brought lot of positivity and confidence among the entrepreneurs of India.According to PM
Narender Modi the start-ups, its technology and innovation is exciting andeffective instruments
for India’s transformation. An idea can be converted into a start-up. Evensome times the crisis
becomes the opportunity and it gives birth to the start-ups. Many time findit worthy. On the other
hand, other people take that idea as an opportunity and mobilise intoreality. The main objective
of the govt is to reduce the load on the start-ups hence allowing themto concentrate fully on their
business and keeping the low cost of adherence.TheMinistry of Human Resource Development
and theDepartment of Scienceand Technologyhave agreed to partner in an initiative to set up
over 75 such startup supporthubs in theNational Institutes of Technology (NITs), theIndian
Institutes of InformationTechnology (IIITs), theIndian Institutes of Science Education and
Research (IISERs)andNational Institutes of Pharmaceutical Education and
Research(NIPERs).The Reserve Bank of India said it will take steps to help improve the ‘ease of
doing business’ in the country and contribute to an ecosystem that is conducive for the growth of
start-up businesses. Soft Bank , which is headquartered inJapan, has invested US$2 billion into
Indianstartups. The Japanese firm has pledged to investment US$10 billion.Google declared to
launcha startup, based on the highest votes in which the top three startups will be allowed to join
thenext Google Launchpad Week, and the final winner could win an amount of
US$100,000inGoogle cloud credits.Oracle on 12 February 2016 announced that it will establish
nine incubation centers.
InBengaluru,Chennai,Gurgaon,Hyderabad,Mumbai,Noida,Pune,Trivandrum andVijayawada.The
result of first ever startup state ranking were announced in December 2018 by theDepartment of
Industrial Policy and Promotion (DIPP) based on the criteria of policy, incubationhubs, seeding
innovation, scaling innovation, regulatory change, procurement, communication, North-Eastern
states, and hill states.
2018 Start-up State Ranking are as follows:
oBest performer: GujaratoTop performers: Karnataka, Kerala, Odisha, and Rajasthan.oLeader:
Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, andTelangana.oAspiring leader :
Haryana, Himachal Pradesh, Jharkhand, Uttar Pradesh ,and West Bengal.oEmerging States:
Assam, Delhi, Goa, Jammu, & Kashmir, Maharashtra,Punjab, Tamil Nadu, and
Uttarakhand.oBeginners: Chandigarh, Manipur, Mizoram, Nagaland, Puducherry, Skim,and
Tripura.Kerala has initiated a government start-up policy called "Kerala IT Mission" which
focuses onfetching 50 billion (US$700 million) in investments for the state's start-up ecosystem.
It₹also founded India's first telecom incubator Start-up village in 2012. The state also matches
thefunding raised by its incubator from Central government with 1:1.Telangana has launched
thelargest incubation centre in India as "T-Hub".Andhra Pradeshhas allocated a 17,000-
sq.ft.Technological Research and Innovation Park as a Research and Development laboratory. It
hasalso created a fund called " Initial Innovation Fund " of 100 crore (US$14 million)₹for
entrepreneurs. The government ofMadhya Pradesh has collaborated with theSmall Industries
Development Bank of India (SIDBI) to create a fund of 200crore (US$28₹million).Rajasthan
has also launched a"Start -up Oasis" scheme. In order to promote start-upsinOdisha, the state
government organised a two-day Start-up Conclave inBhubaneswar on November 28, 2016.6
1.3 Startup Company : A start-up or start-up is started by individualfounders orentrepreneurs to
search for arepeatable and scalable business model. More specifically, a start-up is a newly
emergedbusiness venture that aims to develop a viablebusiness model to meet a marketplace
needor problem. Founders design start-ups toeffectively develop and validate ascalable business
model. Hence, the concepts of start-ups and entrepreneurship are similar.
However, entrepreneurship refers all new businesses, including self-employment and businesses
that never intend to grow big or become registered, while start-ups refer to new businesses that
intend to grow beyond the solo founder, have employees, and intend to growlarge. Start-ups face
high uncertainty and do have high rates of failure, but the minority that goonto be successful
companies have the potential to become large and influential.Some start-ups becomeunicorns,
i.e. privately held start-up companiesvalued at over$1 billion. According toTechCrunch, there
were 279unicorns as of March 2018, with most of the unicorns located in China, followed by the
United States. The largest unicornsfounded as of October 2018includedAnt Financial,Byte
Dance,Uber,Xiaomi, andAirbnb.1.4 Here are the 19 plans Modi has for start-ups:1. Self-
certification.The start-ups will adopt self-certification to reduce the regulatory liabilities. The
self-certification will apply to laws including payment of gratuity, labor contract, provident
fundmanagement, water and air pollution acts.2. Start-up India hub:An all-India hub will be
created as a single contact point for start-up foundations in India,which will help the
entrepreneurs to exchange knowledge and access financial aid. An online portal, in the shape of
a mobile application, will be launched to help start-up foundersto easily register. The app is
scheduled to be launched on April 1.4. Patent protection:A fast-track system for patent
examination at lower costs is being concept ualized by the centralgovernment. The system will
promote awareness and adoption of the Intellectual Property Rights(IPRs) by the start-up
foundations.5. Rs 10,000 crore fund:The government will develop a fund with an initial corpus
of Rs 2,500 crore and a total corpusof Rs 10,000 crore over four years, to support upcoming
start-up enterprises. The LifeInsurance Corporation of India will play a major role in developing
this corpus. A committeeof private professionals selected from the start-up industry will manage
the fund.6. National Credit Guarantee Trust Company:A National Credit Guarantee Trust
Company (NCGTC) is being concept ualized with a budget of Rs 500 crore per year for the next
four years to support the flow of funds to start-ups.7.No Capital Gains Tax:At present,
investments by venture capital funds are exempt from the Capital GainsTax. The same policy is
being implemented on primary-level investments in start-ups. 8. No Income Tax for three
years:Start -ups would not pay Income Tax for three years. This policy wouldrevolutionize the
pace with which start-ups would grow in the future.9. Tax exemption for investments of higher
value:In case of an investment of higher value than the market price, it will be exempt from
paying tax
3. Register through app:.

An online portal, in the shape of a mobile application, will be launched to help start-up
foundersto easily register. The app is scheduled to be launched on April 1.
4. Patent protection:
A fast-track system for patent examination at lower costs is being concept ualized by the
centralgovernment. The system will promote awareness and adoption of the Intellectual Property
Rights(IPRs) by the start-up foundations.
5. Rs 10
,
000 crore fund
:The government will develop a fund with an initial corpus of Rs 2,500 crore and a total
corpusof Rs 10,000 crore over four years, to support upcoming start-up enterprises. The Lif
eInsurance Corporation of India will play a major role in developing this corpus. A committeeof
private professionals selected from the start-up industry will manage the fund.
6. National Credit Guarantee Trust Company:
A National Credit Guarantee Trust Company (NCGTC) is being concept ualized with a
budget of Rs 500 crore per year for the next four years to support the flow of funds to start-ups.
7 .No Capital Gain Tax :At present, investments by venture capital funds are exempt from the
Capital GainsTax. The same policy is being implemented on primary-level investments in start-
ups.
8. No Income Tax for three years:
Start -ups would not pay Income Tax for three years. This policy wouldrevolutionize the pace
with which start-ups would grow in the future.
9. Tax exemption for investments of higher value:
In case of an investment of higher value than the market price, it will be exempt from paying tax
Building entrepreneurs:Innovation-related study plans for students in over 5 lakh schools.
Besides, there will also be anannual incubator grand challenge to develop world class
incubators.11. Atal Innovation Mission:The Atal Innovation Mission will be launched to boost
innovation and encourage talentedyouths.12. Setting Up Incubators:A Private-public partnership
modal is being considered for 35 new incubators and 31 innovationcenters at national
institues.13. Research parks:The government plans to set up seven new research parks, including
six in the Indian Institute ofTechnology campuses and one in the Indian Institute of Science
campus, with an investment ofRs 100 crore each.14. Entrepreneurship in biotechnology:The
government will further establish five new biotech clusters, 50 new bioincubators, 150
technology transfer offices and 20 bio-connect offices in thecountry. 15. Dedicated program in
schools:The government will introduce innovation-related program for students in over 5 lakh
schools.16. Legal support:A panel of facilitators will provide legal support and assistance in
submitting patenapplications and other official documents.17.Rebate:

A rebate amount of 80 percent of the total value will be provided to theentrepreneurs on filing
patent applications.18. Easy rules: Norms of public procurement and rules of trading have been
simplified for the start-ups.19. Faster exit:If a start-up fails, the government will also assist the
entrepreneurs to find suitable solutions fortheir problems. If they fail again, the government will
provide an easy way out. 1.5 Entrepreneurship:Entrepreneurship is the process of designing,
launching and running a new business, which is often initially asmall business. The people who
create these businesses arecalledentrepreneurs. Entrepreneurship has been described as the
“capacity and willingness to develop, organize andmanage a business venture along with any of
its risks in order to make aprofit”. Whiledefinitions of entrepreneurship typically focus on the
launching and running of businesses, due to the high risks involved in launching astart-up, a
significant proportion of start-up businesses have to close due to “lack of funding, bad business
decisions, an economiccrisis, lack of market demand—or a combination of all of these.A broader
definition of the term is sometimes used, especially in the field of economics. In this usage, an
Entrepreneur is an entity which has the ability to find and act uponopportunities to translate
inventions or technology into new products: “The entrepreneur is ableto recognize the
commercial potential of the invention and organize the capital, talent,and other resources that
turn an invention into a commercially viable innovation.” Inthis sense, the term
“Entrepreneurship” also captures innovative activities on the part of established firms, in
addition to similar activities on the part of new businesses

Entrepreneurship is the act of being an entrepreneur, or “the owner or manager of a

businessenterprise who, by risk and initiative, attempts to make profits”. Entrepreneurs act
asmanagers and oversee the launch and growth of an enterprise. Entrepreneurship is the process
bywhich either an individual or a team identifies a business opportunity and acquires and
deploysthe necessary resource required for its exploitation. Early-19th-century French
economistJean-Baptiste Say provided a broad definition of entrepreneurship, saying that it “shifts
economicresources out of an area of lower and into an area of higher productivity and greater
yield”.Entrepreneurs create something new, something different—they change or transmute
values.Regardless of the firm size, big or small, they can partake in entrepreneurship
opportunities.The opportunity to become an entrepreneur requires four criteria. First, there must
beopportunities or situations to recombine resources to generate profit. Second,entrepreneurship
requires differences between people, such as preferential access to certainindividuals or the
ability to recognize information about opportunities. Third, taking on risk isa necessary. Fourth,
the entrepreneurial process requires the organization of people andresources. The entrepreneur is
a factor in and the study of entrepreneurship reaches back to thework of Richard Cantillion and
Adam Smith in the late 17th and early 18thcenturies.However, entrepreneurship was largely
ignored theoretically until the late 19th and early 20thcenturies and empirically until a profound
resurgence in business and economics since thelate 1970s. In the 20th century, the understanding
of entrepreneurship owes much to thework of economist Joseph Schumpeter in the 1930s and
other Austrian economists suchas CarlMenger, Ludwig von Mises and Friedrich von Hayek.
According to Schumpeter, anentrepreneur is a person who is willing and able to convert a new
idea or invention into asuccessful innovation. Entrepreneurship employs what Schumpeter called
“the gale of creative destruction” to replace in whole or in part inferior innovations across
markets andindustries, simultaneously creating new products including new business models. In
this way,creative destruction is largely responsible for the dynamism of industries and long-run
economicgrowth. The supposition that entrepreneurship leads to economic growth is an
interpretation of the residual in endogenous growth theory and as such is hotly debated in
academic economics.An alternative description posited by Israel Kerzner suggests that the
majority of innovationsmay be much more incremental improvements such as there placement of
paper with plastic in the making of drinking straws.

Challenges faced by Startups :-

1) Culture and awareness-. Entrepreneurship is often about Failing and learning from those
failures and starting all over Again. Most common problems faced by entrepreneurs in India Are
creating a business idea, finding business opportunity ,issues related to reward/incentive analysis,
risk evaluation.
2) Social issues: Lack of proper guidance and mentorship is a Major reason behind the failure.
An important factor behind Failures and slow growth of some organizations is the lack of Quality
mentorship, especially in terms of industry knowledge /support.
3) Market structure: Indian markets are largely unorganized And fragmented that create a
roadblock for a start-up to Succeed.
4) Consumer Behaviour: Behaviour of Indian consumer Changes in every 30-50km that makes
it really difficult for a Start-up to create business or market strategy for their products Or
services. Most start-ups generally get stuck in stagnancy and Gradually shut down.
5) Financial Issues: Most start-ups are self/family funded with Limited workforce who makes it
difficult to maintain records Both financial and operational. Overcoming unnecessary business
steps to manage business Operations. Capital and access to capital has been a perennial Problem
for start-ups. Government and private sector investors Have set aside funds through investment
channels but they are Not available for all forms of business
Opportunities for Startups in India:-
In spite of challenges and problems that startups are facing, Indian provide a
plethora of opportunities to find solution tailored to solve them below Is a list of few of
the Opportunities that are discussed for consideration byStartups.
1. India’s Large Population
The population of India is a huge asset for the country. By 2025, it is expected that the
working age population would Surpass the non-working population.
Thisunique Demographic advantage will offer a great opportunity to any
Startup.Various infrastructure issues and the bottom- of-The- pyramid market
wouldprovide huge opportunities for The startups.
2. Change of Mind Set of Working Class
 Traditional career paths will be giving way to Indian startup Space.
Challengingassignments, good compensation Packages would attract talented
people tostartups. Also, it is Seen that several high-profile executives are quitting their
Jobsto start or work for startups.
3. Huge Investments in Startups
Huge investment in Indian startups from foreign and Indian Investors is takingplace. In
2015, more than 300 deals were Done by 300+ angels and venturecapital/ private
equity Players with around $6.5-billion (Rs 42,300Cr) investmentsMaking India the
most sought-after destination for Investments. Some of theactive players are New
York-Based Tiger Global Management, Russian company-DST Global, Japanese telecom
giant Softbank, Kalaari Capital, Sequoia Capital andAccel Partners. More and more are
Going to join the bandwagon as this is thetipping point in Indian commerce for making
good returns by backing Potential unicorns.

Research method
2.1 ObjectivesA) Meaning:A research objective is a clear, concise, declarative statement,
which providesdirection to investigate the variables under the study.The objectives of a
research project summarize what is to be achieved by the study. (B) Characteristics : Research
objective is a concrete statement describing what the research is trying toachieve.A well-
known objective will be SMARTS – SPECIFIC • M – MEASURABLE. • A – ATTAINABLE.
• R – REALISTIC. • T – TIME BOUNDResearch objective should be RELEVANT,
FEASIBLE,LOGICAL,OBSERVABLE, UNEQUIVOCAL & MEASURABLE.Objective is
a purpose that can be reasonably achieved within the expected timeframeand with the available
resources.The objective of research project summarizes what is to be achieved by the
study.The research objectives are the specific accomplishments the researcher hopes toachieve
by the study.

The objectives include obtaining answers to research questions or testing the

researchhypotheses. © Objectives of the study are as follows:1. To study the financial problems
faced by the start-ups in India.2. To study the Women entrepreneurs in India.3. To find out the
reasons behind few or limited start-ups in India.4. To highlight the importance of financing
agency’s for start-ups in India.5. To understand the Entrepreneurial Development plan.
Data Collection Method:The data collected in this research project is totally based on secondary
data. The factsand figures are taken by the different resources.(A) Meaning:Secondary data
means data that are already available i.e., they refer to the data whichhave already been collected
and analyses by someone else. When theresearcher utilises secondary data, then he has to look
into various sources from where hecan obtain them. In this case he is certainly not confronted
with the problems that areusually associated with the collection of original data. Secondary data
may either be published data or unpublished data. Usually published data are available in: (a)
various publications of the central, state are local governments; (b)various publications of
foreigngovernments or of international bodies and their subsidiary organization’s; (c)
technicaland trade journals; (d) books, magazines and newspapers; € reports and publications of
Various associations connected with business and industry, banks, stock exchanges,etc.; (f)
reports prepared by research scholars, universities, economists, etc. indifferent fields; and (g)
public records and statistics, historical documents, andother sources of published information.
The sources of unpublished data are many;they may be found in diaries letters, unpublished
biographies and autobiographiesand also may be available with scholars and research workers,
trade associations,labour bureaus and other public/ private individuals and organization’s.(B)
Advantages and Disadvantages of Secondary Data:Secondary data is available from other
sources and may already have been used in previous research, making it easier to carry out
further research. It is time-saving andcost-efficient: the data was collected by someone other than
the researcher.Administrative data and census data may cover both larger and much
smallersamples of the population in detail. Information collected by the government willalso
cover parts of the population that may be less likely to respond to the census(incountries where
this is optional). A clear benefit of using secondary data is that much of the background work
neededhas already been carried out, such as literature reviews or case studies. The data mayhave
been used in published texts and statistics elsewhere, and the data could already be promoted in
the media or bring in useful personal contacts. Secondary datagenerally have a pre-established
degree of validity and reliability which need not bere-examined by the researcher who is re-using
such data. Secondary data can providea baseline for primary research to compare the collected
primary data results toand it can also be helpful in research design. However, secondary data can
present problems, too. The data may be out of date or in accurate. If using data collected
fordifferent research purposes, it may not cover those samples of the population researcherswant
to examine, or not in sufficient detail. Administrative data, which is not originallycollected for
research, may not be available in the usual research formats or may bedifficult to get access to
.2.3 Women Entrepreneurs in india :
Women Entrepreneurs may be defined as the women or a group of women who initiate,
organizeand operate a business enterprise. The Government of India has defined women
entrepreneurs asan enterprise owned and controlled by women having a minimum financial
interest of 51 percent of the capital and giving at least51 per cent of the employment generated in
the enterprise towomen . Women ‖entrepreneurs engaged in business due to push and pull factors
whichencourage women to have an independent occupation and stands on their own legs. A
sensetowards independent decision-making on their life and career is the motivational factor
behindthis urge. With the change of time there is tremendous upliftment in the status of
Indianwomen entrepreneur. Women entrepreneurs are gaining a strong hold in most of
thedeveloping countries including India, Brazil etc. Another recent trend is women are
increasinglycoming on the fore front in private and government business organizations and
occupying the top positions everywhere-like Indra Nooyi, Chanda Kochhar, Shikha Sharma,
Kiran MazumdarShaw, NainaLal Kidwai, etc. Again, there is increased awareness and women
entrepreneurs areincreasingly finding easy to finance their business. Women entrepreneurs are
also taking upissues of environmental changes too.
1. (A)Status of women entrepreneurs in India:Entrepreneurship is considered as one of the
most important factors contributing to thedevelopment of society. India has been ranked
among the worst performing countries in thearea of women entrepreneurship in gender-
focused global entrepreneurship survey,released in July 2013 by PC maker Dell and
Washing ton based consulting firm GlobalEntrepreneurship and Development Institute
(GEDI).Of the 17 countries surveyed India ranks16th, just above Uganda. Countries
likeTurkey, Morocco and Egypt has outperformed India.Status of higher education in
women in India came out to be lower than most countries in theworld. At present,
women entrepreneurial role is limited in the large-scale industries andtechnology-based
businesses. But even in small scale industries, the women’s participation isvery low. As
per the third all-India census of Small-Scale Industries, only 10.11%of the microand
small enterprises were owned by women, and only 9.46% of them were managed
bywomen. While the number of women operating their own business is
increasingglobally, women continue to face huge obstacles that stunt the growth of their
businesses, suchas lack of capital, strict social constraints, and limited time and skill.
(B) Reasons for becoming Women Entrepreneurs:The glass ceilings are shattered and
women are found indulged in every line of business.The entry of women into business in
India is traced out as an extension of their kitchenactivities, mainly 3P ‘s, Pickle, Powder
and Pappas. But with the spread of education and passage of time women started shifting
from 3P ‘s to modern 3E ‘s i.e., Energy,Electronics and Engineering. Skill, knowledge
and adaptability in business are the mainreasons for women to emerge into business
ventures. Women Entrepreneur is a personwho accepts challenging role to meet her
personal needs and become economicallyindependent. A strong desire to do something
positive is an inbuilt quality ofentrepreneurial women, who is capable of contributing
values in both family and sociallife. With the advent of media, women are aware of their
own traits, rights and also thework situations. The challenges and opportunities provided
to the women of digital eraare growing rapidly that the job seekers are turning into job
creators. Many women starta business due to some traumatic event, such as divorce,
discrimination dueto pregnancy or the corporate glass ceiling, the health of a family
member,or economic reasons such as a layoff. But a new talent pool of women
entrepreneurs isforming today, as more women opt to leave corporate world to chart their
own destinies .They are flourishing as designers, interior decorators, exporters,
publishers,garment manufacturers and still exploring new avenues of economic
participation.(C)Role of Government to develop Women Entrepreneurs in India:
Development of women has been a policy objective of the government sincein
dependence. Until the 70s the concept of women development was mainlywelfare
oriented. In 1970s, there was a shift from welfare approach to developmentapproach that
recognized the mutually reinforcing nature of the process ofdevelopment. The 80s
adopted a multi-disciplinary approach with an emphasis on three core areas of health,
education and employment. Women were given prioritiesin all the sectors including SSI
sector. Government and non- government bodies have paid increasing attention to
women economic contribution through self- employment andindustrial ventures.
TheFirst Five-Year Plan (1951-56) envisaged a number of welfare measures forwomen.
Establishment of the Central Social Welfare Board, organization ofMahala Mandal’s and
the Community Development Programmes were a few steps inthis direction. In the
second Five-Year Plan (1956-61), the empowerment of women was closelylinked with
the overall approach of intensive agricultural development programmes.The Third and
Fourth Five-Year Plans (1961-66 and 1969-74) supportedfemale education as a major
welfare measure. The Fifth Five-Year Plan (1974-79) emphasized training of women,
who were in needof income and protection. This plan coincided with International
Women ‘s Decade andthe submission of Report of the Committee on the Status of
Women in India. In1976,Women ‘s welfare and Development Bureau was set up under
the Ministry of SocialWelfare.The Sixth Five-Year Plan (1980-85) saw a definite shift
from welfare todevelopment. It recognized women ‘s lack of access to resources as a
critical factorimpending their growth.Steps taken in Seventh Five-Year Plan:Inthe
seventh five-year plan, a special chapter on the “Integration of women indevelopment”
was introduced by Government with following suggestion.(I) Specific target group:It
was suggested to treat women as a specific target groups in all majordevelopment
programs of the country.(ii) Arranging training facilities:It is also suggested in the
chapter to devise and diversify vocational trainingfacilities for women to suit their
changing needs and skills
(iii) Developing new equipment’s:
Efforts should be made to increase their efficiency and productivity throughappropriate
technologies, equipment’s and practices.(iv) Marketing assistance:It was suggested to
provide the required assistance for marketing the products produced by women
entrepreneurs.(v) Decision-making process:It was also suggested to involve the women
in decision-making process.Steps taken by Government during Eight Five-Year Plan:The
Government of India devised special programs to increases employment and income-
generating activities for women in rural areas. The following plans are lunched during
theEight-Five Year Plani) Prime Minister Rojgar Yojana and EDPs were introduced to
developentrepreneurial qualities among rural women .ii) ‘Women in agriculture’ scheme
was introduced to train women farmers having smalland marginal holdings in agriculture
and allied activities.(iii) To generate more employment opportunities for women KVIC
took special measuresin remote areas.(iv) Women co-operatives schemes were formed to
help women in agro-basedindustries like dairy farming, poultry, animal husbandry,
horticulture etc. with fullfinancial support from the Government.(v) Several other
schemes like integrated Rural Development Programs (IRDP),Trainingof Rural youth for
Self-employment (TRYSEM) etc. were started to alleviated poverty.30-40% reservation
is provided to women under these schemes.Steps taken by Government during Ninth
Five-Year Plan:Economic development and growth are0 not achieved fully without
thedevelopment of women entrepreneurs. The Government of India has introduced
thefollowing schemes for promoting women entrepreneurship because the future of
small-scale industries depends upon the women-entrepreneurs.

(a) Trade Related Entrepreneurship Assistance and Development(TREAD)scheme was

lunched by Ministry of Small Industries to developwomen entrepreneurs in rural,
semi-urban and urban areas by developing entrepreneurialqualities.(b) Women
Comkp0onent Plant, a special strategy adop0ted by Government to
provideassistance to women entrepreneurs.(c) Swarna Jayanti Gram Swarozgar
 Yojana and Swarna Jayanti Sekhari RozgarYojanawere introduced by government to
provide reservations for women and encouraging themto start their ventures.(d)
New schemes named Women Development Corporations were introduced
bygovernment to help women entrepreneurs in arranging credit and
marketingfacilities.(e) State Industrial and Development Bank of India (SIDBI) has
introducedfollowing schemes to assist the women entrepreneurs. (i) Mahila Udyam
Nidhi(ii) Micro Cordite Scheme for Women(iii) Mahila Vikas Nidhi(iv)Women
Entrepreneurial Development Programmes(v)Marketing Development Fund for
Women4. Consortium of Women entrepreneurs of India provides a platform to assist
thewomenentrepreneurs to develop new, creative and innovative techniques
ofproduction,finance and marketing.There are different bodies such as NGOs,
voluntary organizations, Self-helpgroups, institutions and individual enterprises
from rural and urban areas whichcollectively help the women entrepreneurs in their
activities.
5. Training Programmes:The following training schemes specially for the self-
employment of women are introduced bygovernmenti) Support for Training and
Employment Programmed of Women (STEP).(ii) Development of Women and
Children in Rural Areas (DWCRA).(iii)Small Industry Service Institutes (SISIs)(iv)
State Financial Corporations(v) National Small Industries Corporations(vi) District
Industrial Centre’s (DICs)6. Mahila Vikas Nidhi:SIDBI has developed this fund for
the entrepreneurial development of women especially inrural areas. Under Mahila
Vikas Nidhi grants loan to women are given to start their venture in the field like
spinning, weaving, knitting, embroidery products, block printing,
handloomshandicrafts, bamboo products etc.7. Rastriya Mahila Kosh:In 1993,
Rastriya Mahila Kosh was set up to grant micro credit to pore women at
reasonablerates of interest with very low transaction costs and simple procedures

State No.of unit registered

Tamil Nadu 9618

Uttar Pradesh 7980

Kerala 5487
 Promotional Organizations to help Women Entrepreneur:
Federation of Indian Women Entrepreneur –The FIWE was started in 1993 at the
fourthinternational conference of women entrepreneurs held in December at Hyderabad. Its
mainfunction was to establish networking and to provide a package of service to
womenentrepreneurs’ association in India. Association of women entrepreneurs in different states
areaffiliated to FIWE, so that they can have networking. Federation of Ladies Organization –
FLO was formed in 1983 as a national level forum forwomen with the objective of women
empowerment. FLO has spectrum of activities in orderto promote women entrepreneurship and
professional excellence.World Association of Women Entrepreneurs – The world association of
Women entrepreneurs isan international women organization. It aims is to bring together all
women who are qualified totake up an active and leading part in employers’ organization along
with their male colleagues. National Women Development Corporation – NWDC serves all
women especially inrural and urban poor areas through promotion of women development in
rural and urban areas.Association of Women Entrepreneurs of Karnataka – AWAKE was
established in 1983 and has
Been recognized worldwide. It is an affiliation of Women World Bank in New York. It is one
ofIndia ‘s institution for women totally devoted to entrepreneurship development. Women’sIndia
trust (WIT) – The trust was established in 1968 by KamilaTyabji. WIT center atPanvel, 40kms,
from Mumbai. The Kamila trust UK was setup in the early 1990‘s with an aim of selling in
England items produced by WIT family of women in India. Encourage by its London,WIT
expanded the export activities to Australia, Europe, Germany from 1995 onwards. WIT had plans
to launch computer training for womenConsortium of women entrepreneur of India (CWEI) –
In the context of the opening up of the economy and the need for up-gradation of technology, the
consortium of womenentrepreneur of India started in year 2001 provides a common platform to
help womenentrepreneurs in finding innovative techniques of production marketing and
finance.Self -help groups (SHGs) – A SHGs’ is a small, economical homogeneous and
significant group of ruraland urban poor, voluntarily formed to save and mutually agreed to
contribute to common fundto be lent to its members as per group decision.2.4 Reasons behind
limited start-ups in India :The failing-start-up problem in India has become a big issue in the
start-up ecosystem. As perstatistics, majority of entrepreneurs fail while trying to establish their
business. After studying failed start-ups in India, I have compiled a list of several major reasons
behindtheir failure. From the lack of talent to changing market dynamics, these top reasons can
becomea night mare for any entrepreneur who wants to start a new venture in the ever-changing
Indian-market.

Not Understanding the Needs of the Society:Most successful business ideas arise from needs of
the society. Since high school,teenagers become a part of the competition to get the best college
and eventually, the best job.Due to competition, most people spend countless hours in studies
and disconnect themselvesfrom society. The divide between the tech-driven lifestyle of
millennia’s and lack ofunderstanding for society’s demands contribute towards failing business
models. Theeducational pressure is one of the many reasons that experts believe to be the source
for lack ofunderstanding between people and society. Lack of fresh and Innovative ideas:Almost
every niche market in India is suffocated with multiple startups trying to providesolutions to the
same problem. This calls for entrepreneurs to be inventive and push the boundaries using
innovation to stand out. Due to competition, the urge to grab marketshare makes an entrepreneur
vulnerable to mistakes by producing the wrong product. Lack of People with Hands-on
Experience :33

The startup ecosystem in India has a dearth of talent due to issues like brain drain. Due to
thecompetition among startups, the idea of training a new employee goes right out of the window
as time is a critical factor. Nobody wants to spend resources training the newcrop when you can
get experienced personnel. This has created a void of experienced professionals, who can
contribute from the first day itself. By hiring amateurs,which most Indian startups do, they fail to
provide a better product, which eventually leads toa startup’s demise. Limited Access to
Funding :Entrepreneurs have to fight hard to get funding for their startups nowadays. To get
started, theyuse their savings or take money from friends and family. Very few are lucky to get
angelfunding. Moreover, venture capitalists tend to finance only those business ideas that can
provide a good return on investment. This results in majority of young entrepreneursmissing VC
funding. As a result, most Indian entrepreneurs are not able to continue theirventure due to lack
of funding.Lack of Understanding between Technical and Management TeamsThere is a big
difference between a technical graduate and a management graduate.For a startup to succeed,
complete understanding is need between the two. The lack of technicalknow-how among
management graduates and the lack of managerial knowledge amongtechnical graduates is one
of the common reasons behind the failure of startups in India .Offering very High salaries
Startups in India face a serious shortage of talent pool. To bring experienced professionals on
board, they offer high salaries to keep the startup in safe hands. However, offeringhigh salaries to
employees makes the startup eat in to its resources. The shortage of fundsleads to instability
within the startup, which leads to bad decisions.Lack of Interpersonal and Soft Skill Most
entrepreneurs in India are found to lack interpersonal and soft skills. Due to poorcommunication
skills, an entrepreneur increases the failure rate of his/her startup. Thelack of such essential skills
makes a startup not able to compete in international market. Also,34

Entrepreneurs face a lot of difficulty in pitching their business ideas to a venture capitalist with
poor communication. Not Able to Address the Issue of Scalability Over one-third of Indian
population is on the internet. Startups that havesuccessfully built a product based on the needs of
the society and are running profitably, willface the issue of scalability. In such cases, lack of
awareness or no mentor-ship becomes thedeciding factors behind a startup’s failure. Due to in
experience, entrepreneurs fail tounderstand the changing needs of their product’s growing
consumer base. Unaware of Changing Market Dynamics: Market dynamics keep changing with
new trends becoming outdated in no time.Before a startup knows what hit them, it is often too
late to react and change the strategy. Suchscenarios arise when a startup’s core team is unable to
make timely decisions due to lackof industry insight, not conducting thorough research about the
niche market, targeting awide market segment, and more.Every founder cannot be the
CEO:There can be only one CEO, even if there are many founders. Only one person sets the
vision,and the others execute after there is broad agreement over what needs to be done. Too
many people trying to display the big picture is a waste of time and shows role ambiguity. “Too
manycooks spoil the broth” comes in when every body is the boss. Direction comes from a
single person and that position must be stable, secure, and given space to experiment, with a
reasonableerror margin. Meritocracy:This should be ruthlessly executed from the top down. The
agenda is to build a business and not protect anyone. Right people doing the right task is the only
way to build a business. With awell-laid appraisal mechanism, talent must be timely rewarded
and given a greater platform sothat they feel as much as a part of the venture as the founders. It
takes 8-10 years to build a good/great business, and without a performing team which sticks
around, it is simply not possible.2.5 To highlight the importance of financing agency’s in India: A
start-up is a reflection of an out of the box idea which is put into execution for the generationof
revenues through the sale of products and services that are unique and fills the gap of
theconsumer needs that are in the market. India is fifth in the world in the aspect of the
startupswith 3100 startups functioning since the last 3-4years. India has been seeing a trend of
risk-taking entrepreneurs who are willing to sacrifice huge opportunity costs for startups.
But,according to a study, more than94% of the business leads to the falling scenario due to the
lackof sufficient funds. Lack of funding is a common barrier seen in the startup world.The
known example of the Saurav Karukar’s startup SASLAB technologies in 2014 was due to the
lack of funding. The generation of revenue is not a piece of cake without the constant fuel
offunding to the business. So, most of the times this inquisitive question hits the mind of
everyother entrepreneur: How my startup should be funded?The funding of the business also
depends on the nature of the business and the type of the business. Some startups that are unique
but the idea holds a lot of risk for the business thefunding becomes tough. The business can be
funded through various means and ways in India.Here, is a guide that can make you startup grow
by leapsand bounds through the proper source of funding.(A) Venture Capital:Venture Capital is
money provided by professionals who invest and manage young rapidlygrowing companies that
have the potential to develop into significant economiccontributors. According to SEBI
regulations, venture capital fund means a fund established in theform of a company or trust,
which raises money through loans, donations, issue of securitiesor units and makes or proposes,
to make investments in accordance with theseregulations. The funds so collected are available
for investment in potentially highly profitable enterprises at a high risk of loss. A Venture
Capitalist is an individual or a companywho provides. Investment Capital, Management
Expertise, Networking & marketing support
While funding and running highly innovative & prospective areas of products as well as
services.In India, the Venture Capital Funds can be categorized into the following
groups:Promoted by Public Banks: These type of Venture Capitalist funds is promoted by Public
Banks.SBI Capital Markets Ltd and Can bank Venture Capital Fund are some examples of these
kindsof VC funds. Promoted by the Central Government controlled
 development finance institutions: This groupcontains Venture Capital Funds that are promoted
by development finance institutions thatare controlled by the Central Government of the country.
The examples are IFCI VentureCapital Funds Ltd. (IFCI Venture) and SIDBI Venture Capital
Limited (SVCL).Promoted by State Government Controlled development finance Institutions:
This group includesVenture Capital Funds which are promoted by development finance
institutions controlled bystate government. Some of the famous examples are:Hyderabad
Information Technology Venture Enterprises Limited (HITVEL),KeralaVenture Capital Fund
Private Limited, Gujarat Venture Finance Limited(GVFL), PunjabInfoTech Venture
Fund.Overseas Venture Capital Funds: This group comprises of Venture Capital funds from
outsideIndia. Like: BTS India Private Equity Fund Ltd., Walden International InvestmentGroup,
SEAF India Investment and Growth Fund.Promoted by Private Sector Companies: This category
consists of Venture Capital funds promoted by private Sector Companies. Like: Infinity Venture
India Fund, IL&FS TrustCompany Limited (ITCL).Your pitch is crucial to obtaining funding.
Sequoia, one of the most successful VC firms on the planet, stresses, “you need to convey the
main reasons why an investor shouldlove your business in the first 5 minutes.” Sequoia partners
state you can do this in three simplesteps, which are:Explain what’s changed. Detail the
innovation, industry shift, or problem that presentssubstantial opportunity for your company.
Explain what you do. In one sentence, show how your company can capitalize onthis
opportunity.
Explain the facts. Get to your company’s story and financials quickly. Layout theopportunity
with numbers. Discuss the team and their abilities and experience
(B)Bootstrapping:
Bootstrapping or in layman terms is the self-funding of your startup financing when you are
animmature entrepreneur and don’t get any support from any bank or any other financial
sourceunless you hold a strong plan to execute the business along with a sure guarantee of
growth of the business. Also, one of the ways to start funding the business is that the source of
the fundingis flexible as your borrowing from your friends and family. You can borrow the
money at low-interest rates and also can avail the benefit of not being answerable to anyone. At
the maturitystage of the business, this is considered as an edge in front of the investors asthey
consider it as a good point for the startups that have low requirements. But,not advisable to
startups who are in need have vigorous funding since day 1 for their operations.(C)Crowd
Funding:One of the developing sources of finance for your start-up is to avail the finance from
the public.The process works in an interactive way wherein an entrepreneur pitches his business
idea infront of the layman on a platform where he orients them about his business, the process
and howrevenues would be generated along with the seed capital amount and where would the
amount beinvested into. The crowd then reverts the pitch in the form of donation or form of pre-
buyingorders for the entrepreneur. This type of sourcing not only full-fills the need of
theentrepreneur but also generates an audience for him who are willing to fund his idea as well
assupport it giving a boost for the business in the initial years. This also grabs the attention of
theventure capitalists few years down the timeline and would be interested in funding your
business by looking at the success of your campaign and your risk.(D)Angel Investors:Angels
are generally wealthy individuals or retired company executives who invest directly insmall
firms owned by others. They are often leaders in their own field who not only contribute

Their experience and network of contacts but also their technical and/or management
knowledge.Angels tend to finance the early stages of the business with investments in the order
of $25,000to $100,000. Institutional venture capitalists prefer larger investments, in the order
of$1,000,000. In exchange for risking their money, they reserve the right to supervise the
company’s management practices. In concrete terms, this often involves a seat on the board
ofdirectors and an assurance of transparency. Angels tend to keep a low profile. To meet them,
youhave to contact specialized associations or search websites on angels. The NationalAngel
Capital Organization (NACO) is an umbrella organization that helps build capacity forCanadian
angel investors. You can check out their member’s directory for ideas about who tocontact in
your region.(E)Incubators & Accelerators:Incubators and accelerators are one of the other
options when you’re looking for an initial start-up investment. They are basically the programs
for a short span of time that help the business togrow and nurture also with to provide them with
other mentors and connections for the benefit.Incubators are basically the programs where they
provide you with an in-house space andequipment with their funding to run your start-up against
stakes going as high as up to 20%. On the other hand, accelerators are the programs with a short
span of time where you are assigned asmall seed capital along with a return of a large mentor
network against the stakes of 2-10% ofyour business. Thus, incubators are like your parents who
nurture you and the accelerators arethe programs which give you huge opportunities. India holds
some popular names of AmityInnovation Incubator & Angel Prime.(F)Government
Programs:The government is also providing incentives for the startups and to promote them. The
government of India passed the startup fund in the union budget of 2014-15which is valued
at10,000 crores for Indian startups. There are more programs launched by the government to
takethe benefit such as the Bank of Ideas and Innovations by the program that will support the
new product ideas. There are also government programs wherein you need no collateral
securityagainst the loan you borrow for your startup under the name of Credit Guarantee Fund
Trust for39 e Micro and Small Enterprises. The government also started with MUDRA with an
amount of20,000 crores to sanction loans to startup once you clear the criteria. There are also
institutionswho take lower interest rates as compared to the market. The awareness is a parameter
if you are applying for loan through the government programs.(G) High Net-Individuals: Lastly,
our final source of funding is the High Net-worth individuals who are individualswith ample
amount of financial resources for your startup. These individuals arehaving their existing
business and are looking for opportunities to invest into your business withtheir resources for the
time span of 1-3. After this time span, they expect the amount of theinvestment to be twice or
thrice during this period. They mainly invest in those businesses whichare having the highest
caliber level to sustain in the market and generate good revenue streams inshort span of time.
The first advantage of this type of funding that you can design a custominvestment based on the
funds you need which give you an edge. Lastly, the high net-worthindividuals charge you lower
fees.(H)Bank Loans:This might probably be the first option when you have an idea of your own
start-up. Banks offerloans to the entrepreneurs who are eligible and capable of carrying out a
sustainable and stable business project. For the sanction of the loan, the bank takes into
consideration the businessmodel, the valuation of various inventories and the project report along
with otherdocumentation. But now the process is hassle free and without any collateral. Under all
the banksthere are 7-8 different types of loans for the SME Business. But the only thing that
needs to betaken care of is the timely repayment of the amount. The funding done by the bank
has got benefits such as the profit or loss remains with you along with the proper procedure and
framework of the banks. Also, they are available every and charge less ascompared to venture
capitals i.e. 13-17%.(I) Friends and Family:One of the best places to raise funds is from your
own house. As your family is well aware ofyour talents, they will be willing to support you
regardless of what you want to do. Family and40
Friends are the only ones who know your potential and will be willing to give you money to
startyour business .This may seem like a great way of gaining investment partners, but
everything hasits drawbacks. Acquiring loans or investment form family or friends may
beadvantageous to some businesses as they have faith in your talents and yoursuccess. But for
others that require expert assistance or guidelines, angel investors are the bestway as your family
might not have those experiences which are needed .This may be a good wayfor you to raise
money as they love and care for you but it is not fun when you lose it as it mayaffect your
relationship with that person for ever. A good way of raising funds from your familymay be if
you choose those who have the knowledge of business and its risks whileinvesting .Regardless of
this fact, it is important to behave like a professional with them, andwhile they are considering to
invest, you should lay out all the risks involved in the investmentso they can decide at first.2.6
Entrepreneurship Development Plan:Entrepreneurship is the process of setting up one’s own
business as distinct from pursuing anyother economic activity, be it employment or practicing
some profession. The personwho set-up his business is called an entrepreneur. The output of the
process, that is, the business unit is called an enterprise. It is interesting to note that
entrepreneurship besides providing self-employment to theentrepreneur is responsible to a great
extent for creation and expansion of opportunities for the other two economic activities, that is,
employment and profession. (Can you thinkwhy and how?) Further, each business gives rise to
other businesses– the suppliers of rawmaterials and components, service providers(be it
transport, courier, telecom, distributormiddlemen and advertising firms, accounting firms and
advocates etc. And, in the process,entrepreneurship becomes crucial for overall economic
development of a nation.Given its important role in the overall scheme of economic
development, it isinteresting to note that not many persons opt for a career in entrepreneurship.
Traditionally, it was believed that entrepreneurs are born. No society can wait for the chance of
‘birth’ ofentrepreneurs to pursue its developmental plans. In fact, plans for economic
development would bear little fruit unless entrepreneurship development is regarded as a
deliberate process ofmaking people aware of entrepreneurship as a career at an early age and
creating situations41
Where they may actually make a choice to become entrepreneurs. When you make this
choice,you become a job-provider rather than a job-seeker, besides enjoying a host of
otherfinancial and psychological rewards. Taking to entrepreneurship is surely more a matter
ofaspiring to become an entrepreneur rather as being born as one.Concept of
Entrepreneurship:You are aware that entrepreneurship is regarded as one of the four major
factors of production,the other three being land, lab our and capital. However, it should surprise
you that asregards its French origin, the term ‘entrepreneurship’ (derived from the verb
‘entreprende’meaning ‘to undertake’) pertained not to economics but to undertaking of
militaryexpeditions. So is true of many terms in management such as strategy (a course ofaction
to beat the competition, the ‘enemy’) and logistics (movement of men and machinesfor timely
availability), etc. Historically, as wars are followed by economic reconstruction, itshould be no
surprise that military concepts are used in economics and management. It may be pointed out
that whereas the wars are rare and far between, in today’s competitive world,entrepreneurs wage
wars every day. There is a tremendous pressure to continually developnew products, explore new
markets, update technology and devise innovative ways of marketingand so on. The term
‘entrepreneur’ was first introduced in economics by the early 18thcentury French economist
Richard Cantillon. In his writings, he formally defined theentrepreneur as the “agent who buys
means of production at certain prices in order to sell the produce at uncertain prices in the
future”. Since then a perusal of the usage of the term ineconomics shows that entrepreneurship
implies risk/uncertainty bearing; coordination of productive resources; introduction of
innovations; and the provision of capital. We would like todefine entrepreneurship as a
systematic, purposeful and creative activity of identifying a need,mobilising resources and
organising production with a view to delivering value to the customers,returns for the investors
and profits for the self in accordance with the risks and uncertaintiesassociated with business.
This definition points to certain characteristics of entrepreneurship thatwe turn our attention
to.Characteristics of Entrepreneurship:n the SVO formulation of the concepts of entrepreneur,
entrepreneurship and enterprise,we saw that entrepreneurship is about the process of setting up a
business. One cannothelp but marvel at the beauty of the process: how does one first of all decide
to choose own42
Business as a career; how does one sense a market opportunity; how does one muster up
courageto embark upon it, and mobilise there quisite resources, etc.; so much so that recourse
toentrepreneurship, in common parlance, is considered as an exclusive preserve of a few
giftedindividuals. In the following paragraphs, our effort would be to establish entrepreneurship
as acareer that you should aspire for. Remember, resources may be limited, aspiration need not
be.So, you can aspire for something greater, bigger than your present status and resources. And
starttoday. Remember, aspiration means desire multiplied by action. 1.Systematic
Activity:Entrepreneurship is not a mysterious gift or charm and something that happens by
chance! It isa systematic, step-by step and purposeful activity. It has certain temperamental, skill
and otherknowledge and competency requirements that can be acquired, learnt and developed,
both by formal educational and vocational training as well as by observation and
workexperience. Such an understanding of the process of entrepreneurship is crucial for
dispelling themyth that entrepreneurs are born rather than made.2. Lawful and Purposeful
Activity: The object of entrepreneurship is lawful business. It is important to take note of this as
onemay try to legitimise unlawful actions as entrepreneurship on the grounds that just
asentrepreneurship entails risk, so does illicit businesses. Purpose of entrepreneurship is creation
of value for personal profit and social gain.3. Innovation: From the point of view of the firm,
innovation may be cost saving or revenue-enhancing. If itdoes both it is more than welcome.
Even if it does none, it is still welcome as innovation must become a habit! Entrepreneurship is
creative in the sense that it involves creation of value. Youmust appreciate that in the absence of
entrepreneurship ‘matter’ does not become a“resource.” By combining the various factors of
production, entrepreneurs produce goodsand services that meet the needs and wants of the
society. Every entrepreneurial act result inincome and wealth generation. Even when innovations
destroy the existing industries,for example, zerox machines destroyed carbon paper industry,
mobile telephony threatens43

Landline/ basic telephony, net gains accruing to the economy lend such entrepreneurial actionsas
commendable as the acts of creative destruction. Entrepreneurship is creative also in the sense
that it involves innovation- introduction of new products, discovery of newmarkets and sources
of supply of inputs, technological breakthroughs as well as introduction ofnewer organisational
forms for doing things better, cheaper, faster and, in the present context, ina manner that causes
the least harm to the ecology/environment. It is possible thatentrepreneurs in developing
countries may not be pioneering/innovative in introducing path breaking, radical innovations.
They may be the first or second adopters of technologiesdeveloped elsewhere. That does not
make their achievement small. For imitatingtechnologies from developed world to the
indigenous setting is quite challenging. A ladyentrepreneur wanting to introduce thermal pads for
industrial heating faced tremendousreluctance form the owners of chemical and sugar mills
despite the established superiority of her products over the conventional heating of the vessels by
burning of wood/coke or using LPG.Moreover, there is no need to suffer from “it was not
invented here” complex–there is no need toreinvent the wheel. The global electronics major,
Sony did not invent the transistor! It used thetransistor to build entertainment products that are
world leaders.4. Organisation of Production:Production, implying creation of form, place ,time
personal utility, requires thecombined utilisation of diverse factors of production, land, labour,
capital and technology.Entrepreneur, in response to a perceived business opportunity mobilises
these resourcesinto a productive enterprise or firm. It may be pointed out that the
entrepreneurmay not be possessing any of these resources; he may just have the ‘idea’ that he
promotesamong the resource providers. In an economy with a well-developed financial system,
he hasto convince just the funding institutions and with the capital so arranged he may enter
intocontracts of supply of equipment, materials, utilities(such as water and electricity)
andtechnology. What lies at the core of organization of production is the knowledge
aboutavailability and location of the resources as well as the optimum way to combine them.
Anentrepreneur needs negotiation skills to raise these in the best interests of theenterprise.
Organisation of production also involves product development and development of the market
for the product. Besides, entrepreneur may be required to develop even the sources of44

Supply of requisite inputs. For example, whether it is a matter of putting together an

automobilemanufacturing unit or manufacture of burger/pizza, besides cultivating a market
anddeveloping products to suit its tastes and preferences, there would be a need to develop a pool
ofsuppliers of the diverse components or elements that go into their manufacture. 5. Risk-taking:
As the entrepreneur contracts for an assured supply of the various inputs for his project, heincurs
the risk of paying them off whether or not the venture succeeds. Thus, landowner gets
thecontracted rent, capital providers gets the contracted interest, and the workforce gets
thecontracted wages and salaries. However, there is no assurance of profit to the entrepreneur.
Itmay be pointed out that the possibility of absolute ruin may be rare as theentrepreneur does
everything within his control to de-risk the business. For example, he mayenter into prior
contract with the customers of his production. So much so that he may just becontract
manufacturer or marketer of someone else’s products! What is generally implied byrisk taking is
that realised profit may be less than the expected profit. It is generally believed that
entrepreneurs take high risks. Yes, individuals opting for a career inentrepreneurship take a
bigger risk that involved in a career in employment or practice of a profession as there is no
“assured” payoff. (See Box above) In practice, for example, when a person quits a job to start on
his own, he tries to calculate whether he or she would be able toearn the same level of income or
not. To an observer, the risk of quitting a well-entrenched and promising career seems a “high”
risk, but what the person has taken is a calculated risk. Thesituation is similarly to a motorcyclist
in the ‘ring of death’ or a trapeze artist in circus. While thespectators are in the awe of the high-
risk, the artists have taken a calculated risk given theirtraining, skills, and of course, confidence
and daring. It is said that the entrepreneursthrive on circumstances where odds favouring and
against success area even, that is 50:50situations. They are so sure of their capabilities that they
convert 50% chances into 100%success. They avoid situations with higher risks as they hate
failure as anyone would do; theydislike lower risk situations as business ceases to be a game/fun!
Risk as such more than afinancial stake, becomes a matter of personal stake, where less than
expected performance causes displeasure and distress. The characteristics of
entrepreneurshipdiscussed as above apply in diverse contexts, so does the usage of the term,
viz.,45
Agricultural/Rural Entrepreneurship, Industrial entrepreneurship, Techno-preneurship, Net
preneurship, Green/Environmental or Eco-preneurship, Intra-corporate/firm or Intra- preneusrhip
and Social entrepreneurship. In fact, entrepreneurship has come to be regardedas a ‘type of
behaviours’, whereby one,(i) rather than becoming a part of the problem, proactively tries to
solve it; (ii) uses personal creativity and intellect to develop innovativesolutions; (iii) thinks
beyond resources presently controlled in exploiting the emergingopportunities or attending to the
impending problems; (iv) has the conviction to convince othersof one’s ideas and seek their
commitment towards the project; and (v) has the courage of heartto withstand adversities, persist
despite setbacks and be generally optimistic.Relations between Entrepreneurship and
Management:Entrepreneurship is about business start-ups and renewals. That is, it appears at the
time ofstarting a new business, disappears for some time in the course of starting theventure as
an on-going business and reappears in case there is a need for introducing changes in product,
market, technology, structure and so on. In fact, it is said that everyone is anentrepreneur when
he actually ‘carries out new combinations,’ and loses that character as soon ashe has built up his
business, when he settles down to running it as other people runtheir businesses. In developed
countries, the distinction between the entrepreneurial focus onstart-up sand managerial focus on
routine is so sharp that it is argued that once the project hasreached a level of maturity, the
entrepreneurs must move out and the managers must come in.In developing countries, however,
the concept of owner-manager seems more apt forentrepreneurship as the entrepreneur remains
attached even to the day-to-day operations of theventure. In fact, their lacking in managerial
skills is often forwarded as the cause of business failures. Just as managers are expected to play
entrepreneurial roles in the times ofneed, likewise the entrepreneurs must also demonstrate
managerial abilities for the success oftheir ventures. Irrespective of whether the entrepreneurs
pave way for the managers or theythemselves assume the managerial responsibilities, it is
possible to distinguish between theterm’s entrepreneurship and management.Need for
Entrepreneurship:46
Every country, whether developed or developing, needs entrepreneurs. Whereas, a
developingcountry needs entrepreneurs to initiate the process of development, the developed one
needsentrepreneurship to sustain it. In the present Indian context, where on the one hand,
employmentopportunities in public sector and large-scale sector are shrinking, and on the other,
vastopportunities arising from globalization are waiting to be exploited; entrepreneurship can
reallytake India to the heights of becoming a super economic power. Studies by
GlobalEntrepreneurship Monitor, are search programmed involving annual assessment of
thenational level of entrepreneurial activity across a number of countries show that differencesin
the levels of entrepreneurial activity account for the differences in the level ofeconomic growth
to the extent of as much as 33%. What is that the entrepreneurs do to affecteconomic
development? This leads us to a discussion of the functions of the entrepreneurs inrelation to
economic development. As the enterprise is the object of their endeavour, it is alsonecessary that
we examine their functions in relation to the enterprise as well. Thus, the need
forentrepreneurship arises from the functions the entrepreneurs perform in relation to the process
of economic development and in relation to the business enterprise.Functions of Entrepreneurs in
Relation to Economic development:You are aware that entrepreneurs “organize” the production
process. In the absence this function,all other resources, namely land, labour and capital would
remain idle. They may not beinventing/discovering the products, their role in commercial
exploitation of the advancements inscience and technology via Organisation of the productive
apparatus makes the other resources productive and useful. So much so that it is said that in the
absence of entrepreneurialintervention, every plant would remain a weed and every mineral
would remain a rock.1.Contribution to GDP:Increase in the Gross Domestic Product or GDP is
the most common definition of economicdevelopment. You are aware that income is generated in
the process of production. So,entrepreneurs generate income via Organisation of production be it
agriculture, manufacturingor services. You are also aware that income generated is distributed
among the factors of production where land gets rent, labour gets wages and salaries, capital gets
interest and theresidual income accrues to the entrepreneur in the form of profits. As rent and
interest accrue tothose few who have land and capital respectively whereas larger masses are
destined to earn47

Their incomes via wage employment, the biggest contribution of the entrepreneurship lies
incapital formation and generation of employment. This is what we turn our attention to. 2.
Capital Formation:The entrepreneurial decision, in effect, is an investment decision that
augments the productivecapacity of the economy and hence results in capital formation. In fact,
GDP and capitalformation are related to each other via Capital Output Ratio (COR); more
precisely IncrementalCapital Output Ratio(ICOR) that measures the percentage increase in
capital formationrequired obtaining a percentage increase in GDP. So, if a country desires to
grow @ 10.0 %p.a.and its ICOR is 2.6, then it must ensure capital formation @ 26.0% p.a.
Entrepreneurs, byinvesting their own savings and informally mobilising the savings of their
friends andrelatives contribute to the process of capital formation. These informal funding
supplementsthe funds made available by the formal means of raising resources from banks,
financialinstitutions and capital markets.3. Generation of Employment: Every new business is a
source of employment to people with different abilities, skills andqualifications. As such
entrepreneurship becomes a source of livelihood to those who do neitherhave capital to earn
interest on nor have the land to earn rent. In fact, what they earn is not only alivelihood or means
of sustenance but also a lifestyle for themselves and their families as well as personal job
satisfaction. As such entrepreneurs touch the lives of many, directly as well asindirectly. 4.
Generation of Business Opportunities for Others:Every new business creates opportunities for
the suppliers of inputs (this is referred to as backward linkages)and the marketers of the output
(what is referred to as forward linkages). As a pen manufacturer you would create opportunities
for refill manufacturers as well as wholesalersand retailers of stationery products. These
immediate linkages induce further linkages. Forexample, greater opportunities for refill
manufacturers would mean expansion of business for ink manufacturers. In general, there are
greater opportunities for transporters, advertisers, and, soon. So, via a chain-reaction,
entrepreneurship provides a spur to the level of economic activity.48

5. Improvement in Economic Efficiency:You are aware that efficiency means to have greater
output from the same input.Entrepreneurs improve economic efficiency by, a. Improving
processes, reducing wastes,increasing yield, and, b. Bringing about technical progress, that is, by
altering labour-capitalratios. You are aware that if labour is provided with good implements
(capital), its productivityincreases.6. Increasing the Spectrum and Scope of Economic
Activities:Development does not merely mean ‘more’ and ‘better’ of the existing, it also and
more cruciallymeans diversification of economic activities– across the geographic, sector al and
technologicalscope. You are aware that underdeveloped countries are caught in the vicious cycles
on thedemand as well as supply side. Entrepreneurs penetrate into and break these cycles,
forexample, by organising and orienting domestic production for exports. Thus, production(and
thereby generation of income) is not constrained by the inadequacy of domestic demand.
(Demand-side Vicious Cycle).In today’s context, you are aware that India is poised to become
amanufacturing hub for the global markets for diverse products. Economic development is
alsoconstrained by the supply-side pressures resulting into absence of capacity to meet the
demandwhether domestic or overseas. Entrepreneurs mobilise local and even over seas resources
toaugment the productive capacity of a country. Indian Multinational Giatts is fast becoming a
reality. Entrepreneurs lead the process of economic development via bringing aboutsector al
change. You must be aware that as the economies grow, percentage of GDP originatingfrom
agriculture decreases and that originating in industry and services sectors goesup. Entrepreneurs
through their decisions to divest from the stale sectors and invest in green-field sectors bring
about a virtual transformation of the economy from ‘underdeveloped’ to an‘emerging’ and
‘developed’ status. 7. Impact on Local Communities: Entrepreneurship, in its natural habitat, that
is, small business is at a great level. You may seefrom table on marginalized groups. That small-
scale entrepreneurship enables such marginalisedgroups as women, SC, ST and OBC to pursue
their economic dreams. As there are no entry barriers in terms of educational qualifications,
entrepreneurship is an even more attractive career
Option for such marginalised groups. Agro based rural industries and craft-based
cottageindustries can really catapult local communities to socio-economic success stories.
Localgovernments do their bit in developing these entrepreneurship clusters with a view
toencouraging inter-firm collaboration and development of common facilities.
Entitled,‘Entrepreneurship Clusters in India. ’In regard to the development of entrepreneurship
forimpacting local communities, some corporate-sector initiatives also deserve a mention.
ITCthrough their ‘e-Chau pal’ and HLL through their ‘Shakti’ initiatives have sought to
mobilisenative entrepreneurs for improving the lot of those lying at the bottom of the economic
pyramid.8. Fostering the Spirit of Exploration, Experimentation and Daring:Economic
development, among other things, requires breaking away from the shackles of traditions and
beliefs that restrict growth. For example, if ‘crossing the seas’ were a taboo, therewould not have
been international trade and the result ant economic growth. The establishedways of life need to
be challenged and change must be seen as an opportunity to improve ratherthan something to be
scared of. Entrepreneurs, through their urge to do something new,seeing change as an
opportunity, experimenting with the novel ideas and showing thecourage to try them prepare a
fertile ground for persistent economic development. Have you seenthe Hindi movie ‘Lagan,’
where the protagonist Bhuvan raises a cricket team from the villagerswho had not even seen the
game? Don’t the feats of Karasn Bhai of ‘Nirma’ who challenged‘Surf’ from the mighty
Hindustan Lever Limited make you proud of the daring of theentrepreneurs? Thus, whether one
looks at economic development narrowly in terms of theincrease in GDP or in the wider context
of economic, institutional and social change,entrepreneurship plays a crucial role. Global
Entrepreneurship Monitor studies report alag of 1-2 years between entrepreneurial activity and
economic development, suggestingthat it takes time for the impact of entrepreneurship on
economic development. Animportant observation needs be made here. While entrepreneurship
leads to economicdevelopment, the vice-versa is also true. That is, economic development also
fostersentrepreneurship development. Growing economies provide a fertile soil for the
flourishingof entrepreneurship, an aspect that we will take up while discussing
entrepreneurshipdevelopment.Role of Entrepreneur in relation to their Enterprise:50

Drawing an analogy from musicology in explaining the role of the entrepreneurs in relation
totheir enterprise, one may say that an entrepreneur is not only the composer of themusical score
and the conductor of orchestra but also a one-man band. His roles and functionsget much broader
in scope in a developing country context like ours. Entitled ‘Role andFunctions of the
Entrepreneur in Relation to his/her enterprise.’ These elements are no sequentialas the figure may
convey, the entrepreneur may have to address to all these elementssimultaneously. Yet,
depending upon their backgrounds, the individual entrepreneur may prefer one over the other.
For example, technicians tend to be over obsessed with the production aspect; those with
marketing background may over emphasise creation of market.Investor type entrepreneurs may
be over concerned with the returns from the project. One shouldresist the temptation of looking
at the business only from one’s own narrow perspective. Havingsaid this, it is apt that we provide
a brief description of the various issues that may be relevant ateach stage.Opportunity Scouting:
Entrepreneurial opportunities have to be actively searched for. One may rely on
personalobservation, discovery or invention. Personal/professional contacts/networks
andexperience or may also help in identifying business opportunities. Alternatively, onemay rely
on published reports, surveys and the like. Narayan Reddy of Virchow Laboratoriesrelied on the
personal discovery of the molecule during his employment with a pharmaceuticalcompany. As
observation means seeing/hearing/smelling with a purpose, opportunityspotting presupposes
tendency to look at the things and phenomenon from an entrepreneurialmindset. Most of us have
a consumer’s mindset. If we see any object of desire, may be a pen,laptop, latest model of the
mobile phone or somebody eating pizza or burger, we crave to havethe same thing for our
selves.The entrepreneurial mind, on the other hand starts working out,what would be the market
size, where to procure it from and at what price, will I able to woo thecustomers from the
existing players and how– by selling it cheaper, by providing more value or by better service and
so on. Entrepreneurial opportunities may also be identified through a process of research of
international, domestic, sectoral/industrial analysis. For example, postWTO, international trade
and investment have become freer of restrictions. Textile quotas are being phased out, and, there
are greater opportunities for textile and textile made-ups51

From India. Global outsourcing is on the rise and India offers a huge and varied pool
oftechnical manpower that makes it a cost-effective destination for in-bound globaloutsourcing
in manufacturing as well as Information Technology Enabled Services(ITES).Identification of
Specific Product Offering: While the environment scan leads to the discovery of more
generalised business opportunities,there is a need to zero in on to a specific product or service
idea. For example, trade liberalisationsince WTOs has resulted in export opportunities, but the
question is what to export and where?You may be required to compile a country-product matrix
to be able to decide. This way you may arrive at the product-market combination showing the
fastest growing importand from your point of view export potential. Deciding on the product
offering makes thehighest demand on the entrepreneur’s creativity and innovativeness. Yet, in a
competitiveenvironment, it is possible to differentiate your product offering even if the generic
product is the same and serves the same need. Clearly decision on specific product offering
necessitatesdecisions on who is buying, why, and what are the value expectations. You will be
able tosucceed when the value delivered not only meets but also exceeds customers’ expectations
andcreate a ‘Vow!’ impact. Feasibility Analysis: The product offering idea must be technically
feasible, that is it should be possible with the available technology to convert the idea into are
ality. And thisshould be possible at a cost that can be covered by the price it will fetch; in other
words, the ideamust be economically feasible too. The project cost should be within the
resources availableand the resource providers should be reasonably sure of an appropriate return
on (profit)and return of (safety and liquidity) of their investments. That is, the idea must be
financiallyviable as well. There should be enough sales in the immediate and the prospect of
growth in theforeseeable future; there should be adequate assurance on the commercial viability
of the chosen product offering. Now a day, it is also important to be sure that the rearen’t any
environmentaland other legal restrictions/necessity of prior approvals for setting up the business.
It is also to bedecided as to whether the business will be organised as a proprietary
concern/partnership firm/company or cooperative entity. Clearly the chosen product offering
must be feasiblefrom the diverse perspectives. You must compile these findings in the form of a
business plan52
. That would have to be submitted to the funding authorities, in the Indian context, the
StateFinance Corporation of your area. They may be having a prescribed proformain which the
detailsof the business plan are required to be furnished and, as such there may a need to adapt
thecontents accordingly. An idea about the generic contents of a business plan may be had
from.The business plan may be appraised by the funding institution, and upon satisfying
itselfabout the desirability of assisting your project and upon the furnishing of some
marginmoney it may sanction the loan amount. Recall, Narayan Reddy and his two other as
sociates provided Rs. 8 lakhs and the APSFC contributed Rs. 20 lakhs toward the overall project
cost ofRs. 28 lakhs. Upon the project approval, the entrepreneur can proceed for
projectcommissioning, that is putting up the factory premises, installing the equipment,obtaining
the supplies of the input materials with a view to starting the manufacture andmarketing the
product. As noted earlier too, entrepreneurial functions do not come to anend with the business
start-up. He often looks after its day-to-day operations and strives for itsstability and growth.
Entrepreneurial roles and functions clearly seem onerous. Perhaps thatis why many shy away to
simpler, softer and safer options of employment and practice of profession. Entrepreneurial
going may be tough; but then that is where the tough get going!Do not worry if presently you
may find yourself short on those competencies,values and attitudes. It is just a matter of making
up your mind for a career in entrepreneurshipand grooming yourselves for it. This takes us to the
discussion of the process of entrepreneurshipdevelopment.The process of Entrepreneurship
Development:Entrepreneurship does not emerge spontaneously. Rather it is the outcome of a
dynamic processof interaction between the person and the environment. Ultimately the choice
ofentrepreneurship as a career lies with the individual, yet he must see it as a desirable as well as
afeasible option. In this regard, it becomes imperative to look at both the factors in
theenvironment as well as the factors in the individual as having a nearing on the perception
ofdesirability and feasibility and thereby entrepreneurship development. One may,
therefore,model the process of entrepreneurship development in terms. In general, capitalist
economy withits emphasis on individual achievement is more suitable for entrepreneurship.
Lower rates oftaxation on personal income, lower rates of interest and moderate inflation
stimulate53

Entrepreneurial activity. (Can you think why it is so?) Moderately low external value of
domesticcurrency or in other words, moderately lower exchange rates, stimulate import
substituting andexport promoting entrepreneurship. (Can you rational is e why?). Well-developed
financialsystem, good infrastructure, helpful bureaucracy all these have a favourable impacton
entrepreneurship. Specially designed and dedicated institutions such as NationalInstitute for
Entrepreneurship and Small Business Development (visit,niesbud.nic.in),Entrepreneurship
Development Institute of India (visit, www.ediindia.org)that conduct entrepreneurship awareness
and entrepreneurship development programmes(EAPs and EDPs) a further fillip to this
activity .An important enabler or disabler of entrepreneurship is the prevailing socio-
culturalmilieu. Those societies that respect individual freedom to choose among occupations,
thatencourage the spirit of enquiry, exploration and experimentation, celebrate
individualaccomplishment and in general accord important status to the entrepreneurs are likely
to haveself-sustaining supply of able and willing men and women for taking to entrepreneurship
as acareer.The role of the individual in Entrepreneurship Development:Mr. Narayan Reddy was
desirous of starting a small-scale industry and also had a sense ofefficacy or readiness to pursue
it given his qualifications, experience and the necessary values,attitudes and motivation (the
opening case does not elaborate this. We will discuss these atsuitable places). Even you may like
to see as to where do you find yourself on thedesirability (willingness)-efficacy (ability) matrix,
won’t you? As you may see from thematrix figure able and willing men and women are a
“ready” source of entrepreneurship. Such persons leap up the first opportunity comes their way
to be on their own. Recall, Narayan Reddyleapt up the opportunity as he met the two medicos
who had returned from the Gulf. At any pointof time, there are many men and women who
“want” to set up a business of their own butexperience self-perceived barriers to
entrepreneurship. They could behaving a low perception ofself-efficacy either on account of lack
of resources (or to be more correct, resourcefulness),knowledge or know-how, and the skills.
Collectively, these are referred to ascompetencies, which now we turn our attention to.54

Entrepreneurial Competencies:Every opportunity and successful performance of every role and

function has a competencerequirement. It’s true of entrepreneurship as well. Entitled ‘Cash
ORKASH?’ The term‘competence’ refers to a composite of knowledge, skills and a host of
psychosocial attributes(including Attitudes and Motivation that we will be discussing separately)
in a person that markhis/her effectiveness for a task. The phrase ‘composite’ is crucial. For
example, thecompetence “ability to communicate vision” is much more than proficiency in
writing/speaking skills. It would involve, just to illustrate, vision clarity, understanding
theaudience background, interest and readiness, knowledge about the media and choosing the
mostappropriate one, attracting attention, delivery, leaving not merely an impression butalso an
impact and, assessing effectiveness. So, when the entrepreneur in the televisioninterview pointed
out KASH as the determinants of successful entrepreneurship, he wasindeed referring to the
competencies. Competency approach to human resourcedevelopment in general and
entrepreneurship development in particular was pioneered byDavid McClelland, a Harvard
University psychologist in the late 1960’s and early 1970’s. (Youwill be learning more on
McClelland’s work when we discuss entrepreneurialmotivation.)McClelland set out to define
competency variables that could be used in predicting job performance and that were not biased
by race, gender, or socio-economic factors. Asa result, it becomes more important to learn what a
person does rather than who he/she is. That iswhy management and also entrepreneurship is
better defined as what a manager or anentrepreneur does. Because competencies can be built via
a process of education anddevelopment, we may say that entrepreneurs are made. What are the
distinct competencies forentrepreneurship? In this regard one may refer to the efforts of
Entrepreneurship DevelopmentInstitute of India(EDI), a national resource institution in the area
of entrepreneurship educationresearch and development EDI has identified a set of 15
competencies thatcontribute toward entrepreneurial performance and success. These are briefly
statedhereunder.Initiative: Acting out of choice rather than compulsion, taking the lead rather
than waiting forothers to start. Sees and Acts on Opportunities: A mindset where one is trained to
look for business opportunities from everyday experiences. Recall‘ oranges’ example.55

Efficiency Orientation: Concern for conservation of time, money and effort. Systematic
Planning: Breaking up the complex whole into parts, close examinationof the parts and inferring
about the whole; e.g. simultaneously.Persistence: A ‘never say die’ attitude, not giving up easily,
striving continuously until successis achieved. Information seeking: Knowing and knowing who
knows, consulting experts, readingrelevant material and an overall openness to ideas and
information.Concern for High Quality of Work: Attention to details and observance ofestablished
standards and norms. Commitment to Work Contract: Taking personal pains tocomplete a task as
scheduled. Attending to production, marketing and financial aspects (parts)of the overall
business strategy (the whole).Problem-solving: Observing the symptoms, diagnosing and curing.
Self-confidence: Not being afraid of the risks associated with business and relying on one’s
capabilities tosuccessfully manage these.Assertiveness: Conveying emphatically one’s vision and
convincing others of its value.Persuasion: Eliciting support of others in the venture. Use of
Influence Strategies: Providing leadership. Monitoring: Ensuring the progress of the venture as
planned. Concern for Employee Welfare: Believing in employee wellbeing as the key
tocompetitiveness and success and initiating programmes of employee welfare. You would, now,
be interested in knowing as to how to build these competencies. Knowledge competencies(what
you know regarding facts, technologies, a profession, procedures, a job, anorganisation, etc.) can
be developed by, for example by reading and interacting with peoplewho know. Skill
competencies(what you say or do that results in good or poor performance) can be acquired by
practice, haven’t you heard “practice makes a man perfect”? Forexample, ‘persuasion,’ and ‘use
of influence strategies’ require presentation skills. You may dodouble the homework on what you
want to say, how you want to say, who is your audienceand what are their backgrounds, what
could be the possible questions that may be56
Asked, what would be their answers and so on. Practice it allover a number of times, may be
before mirror or your friends, so that when you are actually in that situation, you perform
well.Entrepreneurial Motivation:Men and women who have a perception of self-efficacy and are
yet to feelinterested in or motivated by the idea of being on their own comprise a potential, future
source of entrepreneurship. What motivates a person is a question easier asked than answered.
Mr. Narayan Reddy was driven by the desire to utilise his discovery of the molecule as a
businessopportunity. In terms of Maslow’s need hierarchy theory, one may say that Mr. Narayan
Reddywas driven by the need for self-actualisation. Since entrepreneurial situation
ischaracterised by personal accomplishment in competitive situations and involvinghigher
standards of excellence, one often come across reference to ‘need for achievement’ or N-ach for
short as the primary driver of entrepreneurial behaviour. See Box entitled ‘How NAch.Drives
Entrepreneurship and Economic Development’. Need for Achievement (N-Ach.): Need for
achievement implies a desire toaccomplish something difficult. To master, manipulate, or
organise physical objects,human beings or ideas. To do this as rapidly and as independently as
possible. To overcomeobstacles and attain a high standard. To excel one’s self. To rival and
surpass others. To increaseself–regard by successful exercise of talent. Yes, entrepreneurship
provides you with the bestopportunity for making the be stuse of your talents as in employment
the 9-5 routine, pressure toadhere to rules and regulations, preference for compliance of boss’s
instructions over the use of personal creativity and innovativeness stifles your progress and self-
development. You cancreate a work environment that suits your abilities and interests. Need for
Power (N-Pow): Needfor Power is the concern for influencing people or the behaviour of others
for moving in the chosen direction and attaining the envisioned objectives. In common
perception, politicians, social religious leaders Chief Executive Officers (CEOs),
GovernmentBureaucrats/Civil Servants typify the need for power. Such a perception seems more
based on the belief that the source of power lies in the “position” a person occupies in
organisational/societal context. In the same vein, business ownership too may imply a need for
power.Moreover, you would appreciate that the process of founding a business, one has to win
thecommitment of capital providers, suppliers of equipment and materials, the employees and
that57

Of the customers. Power may not be used to further one’s self-interests alone, it may be also
beused to touch the lives of others, to make a difference. Entrepreneurs driven by this
socialisedface of the need for power. They found organisations that are a source of sustenance
and self-respect for many. Needs. Entrepreneurs are believed to be low on affiliation, as they are
andexpected to be, innovative, trendsetters and tradition breakers. However, it is not necessary
thataffiliation should only interfere with achievement. In certain cultures, family comprises the
bedrock on which the successful careers are built. One works, as if, not for personal gratification
but for family. Desire to Need for Affiliation (N-Aff.): Often you must have heard your parents
saying thatwhatever they do they do it for their children. If a man thinks about interpersonal
relationships,he has a concern for affiliation. It implies, among other things a tendency of the
people toconform to the wishes and norms of those whom they value. Apparently, social
activists,environmentalists, teachers, and doctors and nurses may seem as predominantly driven
bythese carries on the tradition of business in the family and the community to whichone
belongs, may be interpreted as reflecting need for affiliation as well. In thecountries with the
colonial past, such as ours, the first generation of entrepreneurs inIndependent India was driven
by patriotic fervour and the desire to rebuild the economy leftstagnated by the alien rulers. One
can certainly trace some elements of affiliation motivation insuch instances. Need for Autonomy
(N-Aut.): The need for autonomy is a desire for independence and beingresponsible and
accountable to oneself rather than some external authority for performance. It is the desire for an
opportunity for the fullest expression of one’sabilities. In the context of entrepreneurship, it is
usually interpreted as thedetermination not to work for someone else. In most job situations,
employees aregiven little freedom to exercise their discretion in taking decisions and choosing a
course ofaction so much so that absence of it drives them into starting their own ventures. As
such n-pow. Becomes more a desire for preserving one’s ethos rather than the freedom from the
boss. Takethe example of another Hyderabad based entrepreneur entitled Entrepreneurship for
PreservingPersonal Work Ethos). What does the above discussion mean for entrepreneurship
development?It means that for promoting entrepreneurship it is important to kindle and arouse
the58
Right motivation. In the absence of motivation, even able men and women may not take
toentrepreneurship. Hence. In every Entrepreneurship Awareness Programme (EAP)
orEntrepreneurship Development Programme (EDP), there are special sessions onentrepreneurial
motivation, besides sessions on entrepreneurial competencies. You may notethat motivation and
ability can positively reinforce each other. Persons having abilities search for the avenues for
their expression and hence are drawn to entrepreneurship. Persons eager to be ontheir own may
strive hard to acquire the necessary competencies torealise their dreams. Howtruly one has said
that entrepreneurs are the dreamers who do! In explaining and developingentrepreneurial
motivation, it is important tolearn that different individuals are motivateddifferently, and that one
may betrying to satisfy more than one need through one’s pursuit.This is an important
observation as economic theory very simply says that the objective of thefirm or that of the
entrepreneur is profit maximisation. Entrepreneurial Values and Attitudes:While explaining
human behaviour, one often comes across the terms’ values and attitudes.Rather than attempting
to distinguish between these two terms, it would be sufficient to say herethat taken together,
entrepreneurial values and attitudes refer to the behavioural choices’individuals make for success
in entrepreneurship. The word ‘choice’ is important, as there arealternative ways of behaving too.
In entrepreneurship, a host of behavioural tendencies or orientations have been reported as
having a bearing on success. The entrepreneur in ‘Cash orKASH’ labelled these as ‘Habits’,
some researches have called these as policies orstrategies. Be it the decision to make a choice
about entrepreneurship as a career, be it thedecision to choose the product line, growth strategy,
profit making and social responsibility youwould be required to make choices. The choice that
you make may have a tremendous impact onyour performance. What we do here is to profile
some of the dimensions relating to starting andmanaging a business and the associated
behavioural alternatives, we have considered here two tokeep the things simple. We have
highlighted those alternatives that have been generallyobserved to be associated with superior
performance.Entrepreneurship for Preserving Personal Work Ethos:59
 In industries having captive power plants, a day’s downtime can cause a loss of crores of
rupees.While working for a public sector electrical major, an engineer found it really difficult to
copewith the bureaucratic attitude in servicing the customers. It clashed with his personal
value,‘client’s problems be attended first, paperwork can wait’. He quit the job and started a
turbinerepairing and furbishing company. Incidentally, it takes more money to travel or to
transport thanto repair or refurbish the turbine. But the downtime is reduced and the clients are
happy. Laterthe company also diversified into the manufacture of the parts and commissioning of
the captive power plants on a turnkey basis.How N-Ach. Drives Economic and Entrepreneurship
Development:Credit for investigating and bringing to the fore the role of need for achievement
goes toMcClelland, the Harvard professor whom we referred to also in the discussion
ofcompetency-based approach to human resource and entrepreneurship development. He set out
toinvestigate why some countries are more developed than others He sought to find answer to
thisquestion by examining the proposition that ‘differences in the level of achievementmotivation
are responsible for ‘differences in the level of economic development’. Forthis he examined the
popular stories and folklore and readers up to primary classes of 39countries for finding out
whether they focused on personal accomplishment, triumph of humancourage and effort over the
circumstances and so on. McClelland’s research up held the proposition that differences in the
levels of achievement motivation as revealed by the analysisof the stories and the readers
accounted for the differences in the level of economic development.How? What would be the
process? McClelland observed that entrepreneurship becomes themedium through which the
achievement motivation manifests the best and through which thedevelopment takes off. The
Role of Environment in Entrepreneurship Development:Entrepreneurs bring about economic
growth and development, and the latter in turn provides afertile soil for the flourishing of
entrepreneurship. There certainly is a mutually facilitatingreciprocity between economic growth
and entrepreneurship development.60

Process of Setting up aBusinessProcess of Setting up aBusinessProcess of Setting up

aBusinessProcess of Setting up a BusinessBusiness Roles and Functions of the Entrepreneur in
relation the Enterprise:Developing Exchange Relationships:1. Perceiving market opportunities2.
Gaining command over scarce resources3. Purchasing inputs4. Marketing of Products and
responding to competitionPolitical Administration:5. Dealing with public bureaucracy
(approvals, concessions, taxes)6. Managing human relations within the firm7. Managing
customer and supplier relations.Management Control:8. Managing finance9. Managing
productionTechnology:62

10. Acquiring and overseeing assembly of the factory11. Industrial engineering (minimizing
inputs with a given production process)12. Upgrading the production process and product
quality13. Introducing new production techniques and products. 3.
LITERATURE REVIEW63
3.1 The Imperfect Education System and Conservative Lifestyle : The education system is
one of hindrance for start-ups. In college, students are usuallytrained with advanced
techniques but lack of marketing, sales and operational abilityand leadership skills
needed to advance their own enterprises. In addition, conservative lifestylealso
contributes as one of obstacles. As a culture of family remains, family remains sceptical
tochange and prefer options that are able to provide a steady income rather than engaging
risk.This places pressure on the budding entrepreneur who fall victim to the dichotomy of
providingfor the family instead of following some “whimsical” dream (Au & Kwan,
2009).3.2 Lack of Support Networks and Entrepreneurship Ecosystem:One of the major
challenges is that there is severe shortage of start-up support networksand
entrepreneurship ecosystems. In many western countries, there are special institutions
serveas incubators, start-up accelerators, start-up competitions for entrepreneurs to put
their ideas totest and obtain necessary guidance. In India, incubators, start-up
accelerators, and start-upcompetitions are slowly making their way into the first-tier
cities, but there truly are not enoughto go around. As a result of this shortage, many start-
ups fail at the “idea” stage of their business. The ecosystem usually does not directly
provide funding to start-ups; they just serve as platforms that link investors and
entrepreneurs so that entrepreneurs can obtain necessaryfunding to test out their ideas.
The lack of these facilities makes it more difficult forentrepreneurs to find investors. In
return, investors are more difficult to find entrepreneurs aswell. Even if entrepreneurs are
able to find investors, they will face an entirely different set ofchallenges. Indian culture
inherently does not promote entrepreneurship. Conversely, itencourages stability,
employment at largest ate-owned or private organizations and, aboveall, teaches people
to be risk averse. Even if young Indian individuals have intention to starttheir own
business, their family usually places a considerable amount of negative pressure onthem
to forget entrepreneurship and look for a “stable job” instead.3.3 India lacks enough
angel investors to fund start-ups :Unlike the West, India does not have an adequate
number of angel investors who canfuel the growth of the country’s thriving start-up
ecosystem, industry body NASSCOM has said.“For a successful start-up ecosystem there
is a need for enough angel investors who can64