Part A

Q. 1 Differentiate between Entrepreneur and Manager.

Answer: Entrepreneur and other factors of production such as rent of land, wages of labor and
interest for capital will always be positive., but the reward of the entrepreneur are profit can
sometimes be negative depending upon the degree/grade of entrepreneurial talents.

Entrepreneur (Self-employed) Manager (Paid employee)

1) You are completely independent and 1) You have to work according to the
free to work according to your directions of the employer.
wishes.
2) You are entitled for the whole profit 2) You get your fixed salary or at the most a
you small amount of bonus as reward for your
make. Your efforts are rewarded work.
proportionately.
3) There is great scope of creativity. You 3) There is always lack of incentives so there
can introduce innovation and changes is generally lack of enthusiasm.
to improve your earnings
4) As you r efforts are quickly 4) There is little or almost no scope for
rewarded you feel encouraged to creativity. Rather the work is generally of a
work with enthusiasm. monotonous nature.
5) In self-employment there is full 5) Comparatively there is less responsibility.
responsibility. Whatever happens has to
be borne by the self-employed person.

Q.2 What is the linkage between small, medium and large scale industries.

Answer: The relationship between large scale, medium scale and small scale industries should be
mutually beneficial and helping each other rather than competing and conflicting. Large scale
industries undertake the manufacture of much bigger and complex machines or systems which
demand high technology involving large number of components and sub-systems. Often it may
not be economical and possible to manufacture every item within the organization. These items
can be profitably outsourced to either medium or small scale industries. Thus, many SSI or
ancillary industries can be developed to meet their production requirements.

As the overheads of small scale industries are nominal, the cost of production will be much
lower compared to the cost of production in the large scale units. With the guidance and support
rendered by the big industries, the quality of the products can be improved to the levels required.
If a number of sources are developed for a product, it is possible to increase the quantity of
output as required and uninterrupted supplies can be maintained. For the overall economic
growth of a nation, the development of all the three sectors is equally essential.
Q.3 What is the importance of Business Plan?

Answer: The general importance of business planning is almost unanimously recognized,

considering that the planning system is a mechanism that the company management can use to
steer the future activity in pursuit of the proposed goals. The business plan offers a
comprehensive image of the whole activity of a company, making easier to run the business,
offering the possibility to evaluate new ideas and projects and allowing communication with
different partners ± suppliers, clients, financers ± current or potential. Generally, it is considered
that the business run according to a plan which covers all the managerial aspects, and which
directs the resources, not based on responses to events, has higher odds of success. The
development of a business plan is an efficient method to focus the ideas of the entrepreneurs and
managers. A framework of analysis is thus established, which can thereafter deal with changes.
The absence of a business plan forces the companies to react to the existing changes more than
necessary. According to a recent study (Wilson, Eilertsen, 2010) the organizations paying more
attention to strategic planning, relying on the principles and practices of strategic planning of
company management during the period of economic crisis, have the capacity to be more
proactive, nit just to react to the changes of the external environment. They are thus able to a
greater extent to benefit from the opportunities which appear during the moments of economic
instability.

Part B
Q. 4 (a) What are the challenges faced by women entrepreneurs?

Women entrepreneurs face a series of problems right from the beginning till the enterprise
functions. Being a woman, itself poses various problems to a female entrepreneur. The problem
of Indian women pertains to her responsibility towards family, society and huge workload.
Women in rural areas have to suffer still further. They face tough resistance from men. They are
considered as helpers. The attitude of society towards them and constraints in which they have to
live and work are not very conducive. The following are some of the limitations faced by women
entrepreneurs:

1. Patriarchal society:

The gender bias that exists in society is predominantly due to the patriarchal attitude that has
existed over a long period of time.

2. Lack of opportunities:
As in some area education still has not reached to every female, the lack of education does stand
as a barrier, they are no doubt skilled which enables them to work, but more focused
programmes for their education would enable them to overcome this challenge.

3. Women’s safety and gender-based violence

4. Lack focus on Career Obligations

Indian women do not focus on their career obligations in the same manner as they do on their
family and personal life. Despite having excellent entrepreneurial abilities, they do not focus on
their career obligations. Their lack of focus towards their career creates a problem in promoting
women entrepreneurship.

5. Social barriers:

The traditions and customs prevailing in Indian society sometimes stand as an obstacle to women
is to grow and prosperity. In rural areas, they face more social barriers. They can be overcome
through education and positive legislation. The government policies are and should continue in a
greater measure to support women entrepreneurs.

6. Attitude of creditors towards women:

7. Low Level of Risk-Taking Attitude:

8. Mobility Constraint:

Q.4 (b) List out and explain the characteristics of successful entrepreneurs.

Answer: These are certain basic competencies to be acquired by an entrepreneur. They relate to
the type of behaviour exhibited in the performing of various tasks in the discharge of his
functions. Some of these competencies are latent in the entrepreneur, which need to be identified,
nursed and nurtured. Others are acquired through training and practice.

Initiative:

One of the most fundamental competencies required for the entrepreneurs is the ability to take
initiative. It is rather the first step in the enterprise. An entrepreneur has to be keen observer of
the society, the commercial trends, the product types, the change dynamics and the consumer
trends. Once he/she decides to take the initiative, what matters is the speed with which he/she is
going to function.

Creativity and Innovation:

Competency in creativity and innovation are sometimes basic traits of certain individuals. He/she
might not have any new ideas. He/she may use the creative ideas and innovative products and
services to meet the challenges of a situation, take advantage of the utility of an idea or a product
to create wealth. Example, changes in the packaging of potato chips.

Risk Taking and Risk Management:

An entrepreneur ventures into new ideas and new service. He/she treads into areas of uncertainty.
There are several elements such as demand supply in the market, resources availability,
acceptability of the product design and service which throw a potential challenge to the
entrepreneur.

Problem Solving:

Once an entrepreneur is aware that he has ventured on a new area and has taken certain
calculated risks, he/she should also be aware that many problems are bound to come in the path
of progress. He/she should understand that there is more than one way of solving problems, look
for alternative strategies or resources that would help to solve the problem, generate new ideas,
products, services etc. For example:

Leadership:

An entrepreneur should also be an effective leader who should be able to guide and motivate
his/her entire team. Whenever a company faces problem it is the will power and effective
business acumen and communication skills which oversees the success of the corporation.

Q. 5 (a) What are the sources of Ideas for Entrepreneurs?

Answer: The entrepreneurial idea is a feasible, financially sound, technically possible, and
socially acceptable idea of a project or product that may have utility lo perspective customers.
No one can come up with an idea and, in the very first instance, convert it into a business
opportunity and start a small business on that basis.

The majority of good business opportunities do not come suddenly. It comes from an established
mechanism to generate many ideas so that at least one idea has the potential for a business
opportunity. It requires a series of steps to finalize it into a profitable business. This is the first
step in idea generation and evaluation. Entrepreneurs throughout the world use the following
sources to tap to identify good ideas:

1. Customers
2. Existing organization
3. Distribution channels
4. Government
5. Financial institutions and Development Agencies
6. Research and Development
7. Trade Shows, Fairs aid Exhibitions
 8. Focus Groups
9. Brainstorming
10. Market gap analysis

Q. 5(b) Explain the meaning of First-Generation Entrepreneur.

Answer: The Entrepreneurs who are entering for the first time into the business world are called
1st generation Entrepreneurs. The entrepreneurs those who will not get any aid but use their
Innovation and create an own way of business and succeed in life are called first generation
entrepreneurs. Challenges faced by First Generation Entrepreneurs are discussed below:

1. No prior experience of doing business:

They are first in the history of their family who is going to start a business. So there is no
experiential input is available to them from closest people. They might have gained some
industry experience by working for few years still doing your own business is completely
different ball game. Unlike in jobs where boss and seniors mentored business there might be no
body to guides for quite some time.

2. Financial and legal complexities in India

As a first-generation entrepreneur, you get the pinch that most of the rules and policies laid down
by the government or private agencies generally work against you. Raising funds is the biggest
challenge and grasping all the financial and legal laws that have been made, seem to eat your
money even before you start making profits. Risk was always there and it will always be. First-
generation entrepreneurs won’t be aware of the breadth and depth of risks involved. Again, if
they seek professional advice, they need to pay money for such service, which might be scarce.

3. Raising Capital

“Finance is like a furnace — If you can handle it good, you can make wonderful dishes. If not, it
will be a hot seat for you to sit.” The foremost challenge for any entrepreneur is raising capital
funds.

4. Cash-flow Management

Robust cash flow is essential for survival. Entrepreneurs struggle to pay the bills, while they’re
waiting for payments to arrive. By the time the client pays the invoices, entrepreneurs have to
pay everything from employees’ salary to your mortgage/rent and grocery bills. Waiting to get
paid can make it difficult to run business smoothly.
Q. 6 (a) List out and explain the elements of Business Plan.

Answer: Business plan is supposed to satisfy everyone (investors, directors, founders, and
managers) and induce magical effects on those who partake. An inexperienced entrepreneur can
gain significant learning experience by engaging in the preparation of a business plan, especially
when many variables and uncertainties are involved in the venture launch. the business plan or as
it is sometimes referred to, the game plan or road map, which answers the questions:

Where am I now?

Where am I going? and

How will I get there?

The business plan is a written document prepared by the entrepreneur that describes all the
relevant external and internal elements involved in starting a new venture.

1. Introductory profile

This should include:

The name and address of the company.

The name and address of the entrepreneur(s).

Description of the company and the nature of the business.

The amount of financing needed.

A statement of the confidentiality of the report

2. Executive Summary

The executive summary should stimulate the interest of the potential investor.

What is the business concept or model?

How is this business concept or model unique?

Who are the individuals starting this business?

How will they make money and how much?

3. Industry Analysis

Reviews industry trends and competitive strategies.

Future outlook and trends

 Analysis of competitors

Market segmentation

Industry and market forecasts

4. Venture Description
5. Production Plan
6. Operations Plan
7. Marketing Plan
8. Organizational Plan
9. Assessment of Risk
10. Financial Plan
11. Appendix (contains backup material)

Q. 6 (b) Discuss the importance of Corporate Social Responsibility.

Answer: Corporate Social Responsibility relates to the responsibility of the Corporates or

Business Houses to engage part of the wealth in philanthropic or charitable activities. On the
lines of ‘giving back to the society’ & conducting ‘Responsible Business’. The entirety of CSR
can be discerned from the three words this phrase contains:

1. Corporate,

2. Social, and

3. Responsibility

CSR covers the relationship between corporations (or other large organizations) and the societies

with which they interact. CSR defines society in its widest sense and on many levels, to include
all stakeholder and constituent groups that maintain an ongoing interest in the organization’s
operations. It follows that a responsible business, and indeed any responsible member of society,
must act with due concern for the effects on the lives of other people.

Social responsibility of business can broadly be divided into four categories, which are as
follows:

1. Economic responsibility

2. Legal responsibility

3. Ethical responsibility

4. Philanthropic responsibility
Q. 7 (a) What is the difference between sole-proprietorship and partnership company?

Answer: The following are the major differences between sole proprietorship and partnership
company

1. When the business is owned and managed by a single person exclusively, it is known as
the sole proprietorship. The partnership is the business form in which the business is
carried on by two or more persons and they share profits and losses mutually.
2. Indian Partnership Act 1932 governs the Partnership whereas there is no specific statute
for Sole Proprietorship.
3. The owner of sole proprietorship business is known as the proprietor, while the partners
are the members and legal owners of the partnership firm.
4. The registration of sole proprietorship business is not necessary, but it is at the discretion
of the partners that whether they want to register their firm or not.
5. In Sole Proprietorship the minimum and maximum limit of owners are one. Conversely,
in Partnership, there should be at least two partners, and it can exceed up to 100 partners.
6. In Sole Proprietorship the liability is borne by the proprietor only. In contrast to,
Partnership where the liability is shared between partners.
7. As there is only one owner, the quick decisions can be taken which is not in the case of a
partnership because the mutual decision is taken after discussing with all the partners.
8. There is always an uncertainty regarding the term of the sole proprietorship as it can end
up anytime if the owner dies or if he became incompetent to run a business. On the other
hand, Partnership can be dissolved at any time, if one of the two partners retire or dies or
became insolvent, but if there are more than two partners, it can continue at the discretion
of the remaining partners.
9. In sole proprietorship business, secrecy is maintained, as the secrets are not open to any
person other than the proprietor. On the contrary, in partnership, business, business
secrets are maintained to every partner.
10. The scope of raising finance is high in partnership as compared to sole proprietorship
business.

Q. 7 (b) Explain the linkage between Entrepreneurship and the economic growth of a nation.

Answer: Both growth and development refer to changes over a period of time. The difference is
that growth is quantitative and value neutral. It may have a positive or a negative sign. This
means that the change may be either positive (showing an increase) or negative (indicating a
decrease). Development means a qualitative change which is always value positive. This means
that development cannot take place unless there is an increment or addition to the existing
conditions. Development occurs when positive growth takes place. Yet, positive growth does not
always lead to development. Development occurs when there is a positive change in quality.

The position of the entrepreneur in modern production is like that of the director of a play.
Modern economic development is closely linked with production. Modern production is higher
complex. The entrepreneur directs production and he must do whatever is necessary for its
success. His role in modern economic development has at least three aspects:

1. The entrepreneur co-ordinates the other factors of production. This involves not only
assembling the factors, but also to see that the best combination of factors is made available for
the production process.

2. The entrepreneur takes risks. This is the important function of the entrepreneur and the
quantum of profit he receives is directly proportionate to the risks he takes. Risks are generally
based on the anticipation of demand.

3. Finally the entrepreneur innovates. Innovation is different from invention. Invention is the
work of scientists. Innovation implies the commercial application of an invention. As an
innovator the entrepreneur assumes the role of a pioneer and an industrial leader. The
entrepreneur can undertake anyone type of the following five categories of innovation:

i. The introduction of a new good or a new quality of a good

ii. The introduction of a new method of production

iii. The opening of a new market

iv. The conquest of a new source of supply of raw materials

v. The carrying out of a new organization of any industry.