FYBCOM Commerce Sem 1 Chapter 9 Notes
(Aspect of Entrepreneurs)
1) Explain the different types of Entrepreneurs.
Answer : An entrepreneur is one of the important segments of economic growth. Basically, he is a person responsible for setting up a business unit. In fact, he is the one who has the initiative, skill or innovation and who looks for high achievements. He undertakes new projects that creates wealth, open up many employment opportunities and leads to the growth of other sectors.
i) TYPES OF ENTREPRENEURS : The following are the different types of entrepreneurs.
A) According to the types of business.
1) Business Entrepreneurs :
Business entrepreneur are individuals who conceive an idea for a new product or service and then create a business to turn the ideas into reality. They almost tap both the production and marketing resources to develop a new business opportunity. They may set up a large size or a small size business.
2) Trading Entrepreneurs :
Trading entrepreneur is not concerned with manufacturing work, he only undertakes trading activities. He is basically a marketing person. He identifies potential markets, stimulates demand for his product line and creates a desire and interest among the buyers to purchase his product. He is engaged in both domestic and international trade.
3) Industrial Entrepreneurs :
Industrial entrepreneur is a product oriented man who starts an industrial unit for making some new product. He is a manufactures who identifies the potential needs of customers and tailors a product or a service to meet the marketing needs. He has the ability to convert economic resources and technology into a profitable venture.
4) Corporate Entrepreneurs :
A corporate entrepreneur is a person who demonstrates his innovative skill in organizing and managing a corporate undertaking. He is an individual who plans, develop and manages a corporate body.
5) Agricultural Entrepreneurs :
Agricultural entrepreneur is the one who is engaged in the agricultural activities. He uses latest technology to increase the productivity of agriculture and also adopts mechanization. He cover a broad spectrum of the agricultural sector.
B) According to the use of technology :
1) Technical Entrepreneurs :
Technical entrepreneur is as good as a craftsman. Because of his craftsmanship he develops improved quality of goods. He is concerned and concentrates more in production than marketing. He demonstrates his innovative capabilities in the matter of production of goods and rendering of services.
2) Non – Technical Entrepreneurs :
Non technical entrepreneurs are only concerned with developing alternative marketing and distribution strategies in order to promote their business. They are not concerned with the technical aspect of the product in which they deal.
3) Professional Entrepreneurs :
Professional entrepreneur is a person who established a business and sells out the running business and starts another venture with the same proceeds. He is not interested in managing or operating the business once it is established. He always conceives new ideas to develop alternative projects.
C) According to Motivation :
1) Pure Entrepreneurs :
Pure entrepreneurs is one who may or may not possess an aptitude for entrepreneurs but is tempted by the monetary reward or profit to be earned from the business venture. He is status conscious and wants recognition.
2) Induced Entrepreneurs :
An induced entrepreneur is one who is induced to take up entrepreneurial task due to the various policy measures, incentives. Concessions and tax benefits offered by the government to start a venture. A person with a sound project is provided with package of assistances for his project. Today government offers various concessions, incentives and financial assistances to small scale industries that has induced many people to start a small scale industry.
3) Motivated Entrepreneurs :
Motivated entrepreneur desire for self – fulfillment motivates new entrepreneur. He come into being because of the possibility of making and marketing some new product for the use of consumers. He is further motivated by reward in terms of profit if the product has a good sale.
4) Spontaneous Entrepreneurs :
Spontaneous entrepreneurs are naturally talented. They are persons with initiative, boldness and confidence in their ability that motivates them to undertake entrepreneurial activity. They have a strong conviction and confidence in their inborn ability.
D) Other Types :
i) According to Growth :
1) Growth Entrepreneurs.
2) Super-growth entrepreneurs
ii) According to stages of Development :
1) First Generation Entrepreneurs
2) Modern Entrepreneurs
3) Classical Entrepreneurs etc.
2) Discuss the role of Entrepreneurship training and development center’s in India.
Answer : In order to accelerate the speed of self employment and entrepreneurship development, the government has established various center’s or institutes to impart training and development to entrepreneurs. Some of these are as follows :
1) District Industries Centres (DICs) :
The focus of attention for industrial development was mainly as large cities and state capital. Accordingly, the DICs were established in 8th May, 1978 in order to cater to the needs of small units in rural areas. The head of the DICs are general managers who are assisted by managers working under them. For every Taluka in the District, industries inspectors are appointed by the government who visit the office of the Panchayat Samiti once in a week. To guide the entrepreneur in order to solve their problems.
2) Small Industries Development Organization (SIDO) :
Small Industries Development Organization (SIDO) was established in 1954. It provides training for entrepreneurship. It undertakes entrepreneurship development programmes through small industries service centers. It also provides support in the areas of credit, marketing technology and infrastructure to small industries. It provides number of facilities to small industries.
3) Small Industries Service Institutions (SISIs) :
The SISIs are the field offices of SIDO. Set up in the early 1950s. These institutes give on the spot technical assistance and guidance to small-scale units to solve their technical problems. They also advice small units on new and improved techniques of production and in the use of modern machinery and equipment. There is a network of 28 SISIC in all the states to carry out its functions.
4) Entrepreneurship Development Institute of India (EDIT) :
Entrepreneurship Development Institute of India (EDIT) was established in 1983 at Ahmedabad in order to create the institutional infrastructure for entrepreneurship development. It is sponsored by apex financial institutions, namely the industrial Development Bank of India, the Industrial Finance Corporation of India, the industrial credit and Investment Corporation of India, and State Bank of India. It is committed to entrepreneurship education, training and research.
5) National Institute for Entrepreneurship and Small Business Development (NIESBUD) :
The National Institute for Entrepreneurship and small Business Development (NIESBUD), located at Ahmedabad was set up in 1983. Indian Central Government started an organization called NIESUD with the main motto of co-ordinating activities related to entrepreneurship and small business development.
6) Centre for Entrepreneurship Education and Development (CEED) :
Centre for Entrepreneurship Education and Development (CEED) ws launched in December, 1995, as an innovation centre that assist governments. Organizations and communities in helping people to achieve their potential through entrepreneurship. The following are the services of CEED. Technical assistance, Entrepreneurship consulting , Micro-finance systems, Resources publications.
3) Write a note on competencies of an entrepreneur.
Answer : An entrepreneur is one of the important segments of economic growth. Basically, he is a person responsible for setting up a business unit. Entrepreneurs are found in every economic system and in every form of economic activity as well as in other social and cultural activities. They are found amongst labourers, artisans, exporters, importers, supervisors, engineers, bankers, professionals and also amongst farmers, fisherman and tribals. A successful entrepreneur needs to have an all round personality, which comprises of the following elements :
1) Risk Taker :
An entrepreneur should have the capability to take moderate risk in critical situation and learn quickly from the failure. It is t be noted that entrepreneur take moderate risks, as compared to gamblers who take extreme risks.
2) Organizer :
Entrepreneurs need to be clever at handling people and situations. They not only need to be resourceful but need to be also good at managing and organizing the resources for starting the enterprise and kept it going. Therefore, entrepreneur requires highest level of organizing abilities.
3) Innovator :
An entrepreneur must have innovative ideas. The key to entrepreneurship is innovation. It is the capability to come out with new ideas and make them work in a competitive and consumer- oriented environment so an essential quality of an entrepreneur is that he must be innovative.
4) Energetic :
An entrepreneur should have the ability to put in long hours of work, for which his energy level must be high, physical and mental fitness plays an important role. This means that there cannot be any compromise on hard work if an entrepreneur has to reach his goals. That is why he has to be perseverant and committed to his goals.
5) Decision making skill :
An entrepreneur should have the ability to take and implement decisions quickly but not hastily. He is required to take minor or major decisions. A successful entrepreneur is one who takes a right decisions at the right time and implements if efficiently and effectively.
6) Human Relation :
An entrepreneur must maintain good relations with his customers. He must also maintain good relations with his employees if he is to motivate them to perform their jobs at a high level of efficiency. In order to maintain good human relation he should have emotional stability, personal relations, tact fullness and consideration.
7) Open – mindedness :
Open – mindedness means a free and frank approach in accepting one’s errors and then making efforts to rectify the same. A successful entrepreneur is open to constructive criticisms. He is willing to learn from his past experience and mistake and moulds himself for better future.
8) Vision and foresight :
Every entrepreneur needs to be a visionary in order to turn his dreams into realities. They must be able to visualize and forecast future events and plan accordingly. Besides an entrepreneur is one who can analyse future need and trends and turn them into an advantage.
4) Write a note on incentives to entrepreneurs in India.
Answer : Entrepreneurs in India are offered a number of incentives in order to boost them to contribute to economic development. The term “incentive” means encouraging productivity. The objective of incentive is to motivate an Entrepreneur to set up a new venture in the larger interest of the nation and the society. Incentives include concessions, subsidies and bounties. Subsidy denotes a lump sum, which is given by the government to an entrepreneur to cover the cost. The term ‘bounty’ denotes financial aid given to an industry to help it to compete with other units in the country or in a foreign market. These incentives push an entrepreneur towards decisive decision and action.
Following is the lit of incentives and subsidies offered by the government of India to entrepreneur :
a) Incentives in Operation :
Interest free loans.
Exemption from property tax.
Incentives to NRIs.
Special incentives to women entrepreneurs.
Exemption from income tax.
Interest free sales tax loans.
Sales tax exemptions.
Land and building at concessional rates.
Price preference to SSI units.
Exemption from stamp duty.
Provision of seed capital.
b) Subsidies in Operation :
Export / import subsidies and bounties.
Subsidy for research and development works.
Capital investment subsidy.
Subsidy for power generations.
Subsidy for buying test equipment.
Subsidy for industrial housing.
Subsidy / assistance for technical consultancy.
Subsidized consultancy services.
Subsidy for market studies.
5) What are the problems faced by women entrepreneurs in India.
Answer : In India, participation of women as industrial entrepreneur has increased from 70s. Majority of them are engaged in the un- organised sector like agro-based industries, handicrafts, handloom and cottage based industries. The government of India has defined a women entrepreneur as “an enterprise owned and controlled by a woman having a minimum financial interest of 51% of the capital and giving atleast 51% of the employment generated in the enterprise to women”.
PROBLEMS FACED BY WOMEN ENTREPRENEURS :
Women entrepreneurs face a series of problems right from the beginning till the enterprise functions some of the problems faced by women entrepreneurs are as follows :
1) Problem of Finance :
Women entrepreneurs always suffer from inadequate financial resources and working capital. They are lacking access to external funds due to absence of tangible security and credit in the market. Women entrepreneurs also face the problem of obtaining working capital for financing day to day operation of their enterprise.
2) Marketing Problems :
Since women cannot run around for marketing, distribution and money collection, they have to depend on middle men for the above activities. These middlemen pocket large chunk of profit. They exploit the women entrepreneurs. They also lack skills in pricing and promotion.
3) Family Responsibilities :
In India, the involvement of a women in the family leaves little time and energy for business. The success of a married woman depends upon supporting husband and family. There arises a role conflict prevent them from taking prompt decisions in business.
4) Lack of Education :
In India literacy among women is very low. Due to lack of education majority of women are unaware of technological development, marketing knowledge, etc. Lack of information and experience creates further problems in setting up and running a business enterprise.
5) Social Attitude :
One of the biggest problems women entrepreneurs is the social attitude in which she has to live and work. There is discrimination against women in India despite constitutional equality. Women do not get equal treatment in male-dominated Indian society and male ego puts barriers in their progress. Entrepreneurship has traditionally been seen as a male preserve.
6) Problem of Raw material :
Women entrepreneur find it difficult to procure new material and the necessary inputs. The failure of many women co- operatives in 1971 such as those engaged in basket making were mainly due to the inadequate availability of forest based raw materials.
7) Low Risk Bearing Ability :
Normally, women entrepreneurs have low risk bearing ability. This is because, women in India lead a protected life. They are less self-dependent as compared to males. Secondly, they have to balance between household life and business work. Therefore, the risk bearing capacity of women gets reduced.
8) Competition :
Women entrepreneurs have to face severe competition from organized industries and male entrepreneurs. Despite the fact that women entrepreneurs are good in keeping their service prompt and delivery in time, due to lack of organizational skills compared to male entrepreneurs women have to face constraints from competition.
9) Limited mobility :
The women entrepreneurs have limited mobility as compared to make entrepreneurs. Business women need a good deal of traveling for conferences, meeting, negotiations, etc. However, the attitude towards women is bit reserved in India. For example, a single women asking for a room in a hotel is still looked upon with suspicion.
6) Explain the promotion of women entrepreneurs.
Answer : In India, participating of women as industrial entrepreneurs has increased from 70s majority of them are engaged in the un- organised sector like agro-based industries, handicrafts, handloom and cottage based industries. Women entrepreneurs face a series of problems right from the beginning to till the enterprise functions. Some of the problems are – problem of finance, lack of education, social attitude, low risk-bearing capacity, limited mobility, etc. It is possible to promote women entrepreneurs in India. With proper governmental and societal support, these women can create sustainable organized and growth – oriented enterprises with a vision.
PROMOTION OF WOMEN ENTREPRENEURS :
With a view that women entrepreneurs should come forward in industrial field and become self-sufficient, government and financial institutions have announced many schemes of providing assistance. Some of the important schemes for women
entrepreneurs are as follows :
1) Entrepreneurship Development Programmes :
To upgrade skills of potential women entrepreneurs, various institutions undertake Entrepreneurship development Programmes (EDPs). The entrepreneurship development programme encourage potential women entrepreneurs to set up small enterprises. Some of the training and development institutins are NIESBUD, SIDO, EDII & NISIET.
2) Seed capital scheme :
In order to start own business this scheme is undertaken by the government. Government provides funds @ 10% to unemployed youths and women. The seed capital provided is 10% to 15% of the total cost of the project. The percentage of seed capital is 22.5% for backward class candidates. The women is treated unemployed even if their husbands are doing business or service.
3) Training and Extension Services :
The programmes for training and extension services for women entrepreneurs will be organized by IDBI through designated approved agencies independently and / or in association with other development agencies like. Entrepreneurship Development Institute of India, Technical consultancy Organisations (TCOs), Central / State Social Welfare Boards and KVIC.
4) Income Generating Scheme :
The Department of women and child Development implements this scheme. It provides assistance for setting up training – cum – income generating activities for needy women to make them economically independent.
5) Scheme on Trade Related Entrepreneurship Assistance and Development (TREAD) for women :
The government of India launched a scheme entitled “Trade Related Entrepreneurship Assistance and Development (TREAD) during the 9th plan period. The scheme aims at economic empowerment of women through trade related training information and counseling. This scheme provides for marketing development and financial loans through NGOs. The assistance is provided for Self-employment ventures by women.
6) Self – Employed Women Association (SEWA) :
Self-Employed Women Association (SEWA) is an organization of poor, self-employed women workers. It is a trade union registered in 1972. The women in this organization earn a living through their own labour and self businesses. They do not obtain regular salaried employment with welfare benefits like workers in the organized sector. Main objective of SEWA is to organize women workers for full employment where by workers can obtain job security, income security, food security and social security.
7) Mahila Arthik Vikas Mahamandal (MAVIM) :
The main object of this corporation is the economics and personality development of needy women in state of Maharashtra. This corporation gives necessary training and employment opportunities to enable the women to earn and become self- sufficient. The corporation will work as one of the institution for economic development of women. Every activity of the corporation shall be for making women economically stronger and self- sufficient.