Manufacturing Micro Enterprises : Where the

Enterprises investment in plant and machinery

In the case of enterprises
does not exceed ₹ 25 lakh.
engaged in the Small Enterprises : Where the
manufacture or production investment in plant and machinery
of goods pertaining to any is more than ₹ 25 lakh but does not
industries specified in the exceed ₹ 5 crore.
first schedule to the
Industries (Development Medium Enterprises : Where the
and Regulation) Act, 1951. investment in plant and machinery
is more than ₹ 5 crore but does not
There are Three Types of
exceed ₹ 10 crore.
Enterprises :
Services Micro Enterprises : Where the
investment in equipment does not
exceed ₹ 10 lakh.
In the case of
Small Enterprises : Where the
enterprises engaged investment in equipment is more
in providing or than ₹ 10 lakh but does not exceed
rendering of ₹ 2 crore.
services. Medium Enterprises : Where the
investment in equipment is more
There are Three than ₹ 2 crore but does not exceed
Types of Enterprises : ₹ 5 crore.
 Role of Small Businesses in the Socio-economic
Development of India
Output Generation Generation of Supply an Enormous
Employment Variety of Products
Small industries in Small industries in our
Small industries are the
India contribute second largest employers of country supply an
almost 40 per cent of human resources, after enormous variety of
the gross industrial agriculture. They account for products which includes
95 per cent of the industrial mass consumption
value added and 45 units in the country. There
per cent of the total are, therefore, considered to
goods, and also
be more labour-intensive manufactured the
exports (direct and sophisticated items like
and less capital-intensive.
direct exports) from This is a boon for a labour electric and electronic
India. surplus country like India. goods.
Balanced Regional Development Provide Ample Opportunity
Small industries which produce simple Entrepreneurship
products using simple technologies and
depend on locally available resources both
material and labour can be set up
Small industries provide
anywhere in the country. They, thus, ample opportunity for
contribute significantly to the balanced
development of the country. entrepreneurship.
Advantage Low Cost of Quick and Timely Decision -
Production making
Small industries also enjoy the Due to the small size of the
advantage of low cost of organizations, quick and timely
decisions can be taken without
production. Locally available consulting many people as it happens
resources are less expensive. in large sized organizations.
 Multiple Source Small businesses generate multiple source of income to the rural households. They engage in
wide range of non-agricultural activities such as self-employment in commerce, manufacturing
of Income and services, along with traditional rural activities of farming and agriculture.

Small business facilitates mobilization and utilization of local Mobilization of

resources and skills which might otherwise remain unutilized. Local Resources

Prevent Development of rural and village industries can also prevent migration
Migration of rural population to urban areas in search of employment.
Small industries are significant as producers of consumer goods and absorbers of surplus labour, thereby
addressing the problems of poverty and unemployment. These industries contribute amply to other socio-
Reduction in Poverty
economic aspects, such as reduction in income inequalities, dispersed development of industries and linkage Unemployment and Income
with other sectors of the economy. Inequalities

Accelerated Industrial Growth and Promotion of small scale industries and rural industrialization has been considered by the
Creating Employment Potential in Government of India as a powerful instrument for accelerating industrial growth and creating
Rural and Backward Areas additional productive employment potential in rural and backward areas.
Government Schemes and Agencies for Small-Scale Industries
National Small Industries Corporation
The District Industries Centers (DICs)
(NSIC)
National Small Industries Corporation (NSIC) was The District Industries Centers was launched on 1
set up in 1955 to promote, aid and foster the May 1978, with a view to provide an integrated
growth of small business units in the country. administrative framework at the district level,
This focuses on the commercial aspects of these which would look at the problems of
functions : industrialization in the district, in a composite
A. Supply indigenous and imported machines on easy manner.
hire-purchase terms.
B. Procure, supply and distribute indigenous and The main activities undertaken by the
imported raw materials. District Industries Centers (DICs) are as
C. Export the products of small business units and follows :
develop export-worthiness.
A. Identification of suitable schemes
D. Mentoring and advisory services :
B. Preparation of feasibility reports
 Serve as technology business Incubators
 Creating awareness of technological C. Arranging credit
Upgradation D. Machinery and equipments
 Developing software technology parks and E. Provision of raw material and
technology transfer centres F. Other extension services
Entrepreneurship Development

Entrepreneurship is the process of setting up

one’s own business as distinct from pursuing
any other economic activity, be it
employment or practicing some profession.
The person who set-up his business is called an
entrepreneur. The output of the process, that
is, the business unit is called an enterprise.

ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE

The Person / The Actor The Process / The Act The Outcome
(Subject) (Verb) (Object)
 Characteristics of Entrepreneurship
Systematic Activity : Entrepreneurship is a systematic, step-by-step and purposeful activity. It has certain
temperamental, skill and other knowledge and competency requirements that can be acquired, learnt and
developed, both by formal educational and vocational training as well as by observation and work experience.

Lawful and Purposeful Activity : The object of entrepreneurship is lawful business. Purpose of
entrepreneurship is creation of value for personal profit and social gain.

Innovation : Entrepreneurship is creative in the sense that it involves creation of value. By combining the various
factors of production, entrepreneurs produce goods and services that meet the needs and wants of the society.
Every entrepreneurial act results in income and wealth generation.

Organization of Production : Production requires the combined utilization of diverse factors of production, land,
labour, capital and technology. Entrepreneur, in response to a perceived business opportunity mobilizes these
resources into a productive enterprise or firm.

Risk-taking : As the entrepreneur contracts for an assured supply of the various inputs for his project, he incurs the
risk of paying tem off whether or not the venture succeeds. Thus, landowner gets the contracted rent, capital
providers gets the contracted interest, and the workforce gets the contracted wages and salaries. However, there
is no assurance of profit to the entrepreneur.
 Need for
Entrepreneurship
Every country, whether
developed or developing, needs
entrepreneurs. Whereas, a
developing country needs
entrepreneurs to initiate the
process of development, the
developed one needs
entrepreneurship to sustain it.
 01 Contribution to GDP
02 Capital Formation
03 Generation of Employment
04 Generation of Business Opportunities for Others
05 Improvement in Economic Efficiency
06 Increasing the Spectrum and Scope of Economic Activities
 Process of Entrepreneurship Development
Opportunity Scouting
Entrepreneurial opportunities have to be actively searched for. One may rely on personal
observation, discovery or invention may help in identifying business opportunities.
Entrepreneurial opportunities may also be identified through a process of research of
international, domestic, sectoral/industrial analysis.

Identification of Specific Product Offering

There is a need to identify a specific product or service idea. Deciding on the product
offering makes the highest demand on the entrepreneur’s creativity and innovativeness.
An entrepreneur will be able to succeed when the value delivered not only meets but also
exceeds customer’s expectations and create 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 a reality. In other words, the idea must
be economically feasible too. The project cost should be within the resources available and
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 financially
viable as well. There should be adequate assurance on the commercial viability of the
chosen product offering. It is also to be decided as to whether the business will be
organized as a proprietary concern/ partnership firm/ company or cooperative entity.
Start-up India Scheme
The Start-up India Scheme is a
flagship initiative of the
Government of India with an
objective to carve a strong
ecosystem for nurturing
innovation and start-ups
in the country.
The Government of Trigger an Create awareness
India Aims to entrepreneurial culture about the charms of
Empower Startups to and inculcate being an entrepreneur
Grow through entrepreneurial values in
and the process of
the society at large and
Innovation and entrepreneurship,
influence the mindset of
Design. The Scheme people towards especially among the
Specifically Aims to : entrepreneurship. youth.

Encourage more dynamic Support the early phase Broad base the
startups by motivating entrepreneurial supply by
of entrepreneurship
educated youth, scientists meeting specific needs of
development, including
and technologists to under represented target
the pre-startup,
consider groups, to address the
nascent, as well as, early needs of the population
entrepreneurship as a
lucrative, preferred and
post startup phase and at the bottom of the
viable career. growth enterprises. pyramid.
Ways to Fund Start-up
In addition to the government plans that offer
startup capital and bank loans, the funding for
startups can also be availed in the following ways :

Bootstrapping Crowd Funding Angel Investment

Commonly known as self It is the pooling of resources by Angel investor are
financing, it is considered as the a group of people for a
first funding option because by
individuals with surplus
common goal. Crowd funding
stretching out your personal is not new to India. There are cash who have keen
savings and resources, you are many instances of interest to invest in
tied to your business. Also, at a organizations reaching out to
later stage, investors consider it upcoming start-ups.
common people for funding.
as your merit. However, it is a
These platforms help start-ups They also offer
good option of funding only if mentoring or advice
or small businesses to meet
the initial requirement is small
and handy.
their funding requirements. alongside capital.
 Venture Capital Business Incubators Micro finance and NFBCs
and Accelerators
They are Micro finance is basically
Early stage business can consider access to financial services
professionally incubator and accelerator
to those who either do not
programmes as a funding
managed funds option. These two are generally have access to conventional
which ate invested used interchangeably. However, banking services or have
incubator is like a parent who not qualified for a bank
in companies that nurtures the business (child), loan. Similarly, NBFCs (Non
have huge potential. whereas, accelerator helps to run
or take a giant leap in business.
Banking Financial
Venture capitalists Incubators and accelerators ably Corporation) provides
connect the start-ups with banking services without
provide expertise mentors, investors and fellow meeting legal requirement /
and mentorship. start-ups using this platform. definition of a bank.
 Intellectual Property
Rights (IPR)
All are the products of human creativity and
skill, such as inventions, books, paintings, songs,
symbols, names, images, or designs used in
business, etc. All inventions of creations begin
with an 'idea'. Once the idea becomes an actual
product, i.e., Intellectual Property, one can
apply to the authority concerned under the
Government of India for protection. Legal rights
conferred on such products are called
'Intellectual Property Rights' (IPR).
Industrial Property
It includes inventions (patents),
trademarks, industrial designs
and geographical indications.

Copyrights
It includes literary and artistic works,
such as novels, poems, plays, films,
musical works, artistic works, such as
drawings, paintings, photographs and
sculptures and architectural designs.
Why is IPR Important for Entrepreneurs?
It encourages creation of new, path breaking inventions, such
as cancer cure medicines. It incentivizes inventors, authors,
creators, etc., for their work.
It allows the work created by a person to be distributed and
communicated to the public only with his/ her permission.
Therefore, it helps in the prevention of loss of income.
It helps authors, creators, developers and owners to get
recognition for their works.
Types of Intellectual Property Rights
1) Copyright
Copyright is a right conferred upon the creators of literary, artistic, musical, sound
recording and cinematographic film.
2) Trademarks
A trademark is any word, name, or symbol (or their combination) that lets us identify the
goods made by an individual, company, organization, etc.
3) Geographical Indication
A Geographical Indication (GI) is primarily an indication which identifies agricultural,
natural or manufactured products (handicrafts, industrial goods and food stuffs)
originating from a definite geographical territory, where a given quality, reputation or
other characteristic are essentially attributable to its geographical origin.
4) Patent
A patent is a type of IPR which protects the scientific inventions (products and or process)
which shows technical advancement over the already known products.
5) Design
A ‘design’ includes shape, pattern, and arrangement of lines or colour combination that is
applied to any article.
6) Plant Variety
Plant Variety is essentially grouping plants into categories based on their botanical
characteristics.
7) Semiconductor Integrated Circuits Layout Design
A semiconductor is an integral part of every computer chip.