INDEX

Sr.no Topic Pg no.

1. Chapter 1: Introduction to the industry 1

Definition of Start-up 1
Startup India 2
Start-up Company 5
Here are the 19 plans given by 6
Government. Entrepreneurship 9

2. Chapter 2: Literature review 10

3. Chapter 3: Research Methodology 14

4. Chapter 4: General Analysis 56

5 Chapter 5: Findings & Suggestions 65

6. Chapter 6: Conclusions 68

7. Chapter 7: Bibliography 70

1
 1. INTRODUCTION TO THE COMPANY

Definition of start-up:

A start-up company or start-up or start-up is a young company that is just beginning to develop. Start-ups
are usually small and initially financed and operated by a handful of founders or one individual. These
companies offer a product or service that is not currently being offered elsewhere in the market, or that
the founders believe is being offered in an inferior manner. In the early stages, start-up companies'
expenses tend to exceed their revenues as they work on developing, testing and marketing their idea. As
such, they often require financing. Start-ups may be funded by traditional small business loans from
banks or credit 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 founded does not in
itself make a company a start-up. Nor is it necessary fora start-up to work on technology, or take venture
funding, or have some sort of "exit". The only essential thing is growth. Everything else we associate
with start- ups follows from growth."

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 15 August 2015
address from the Red Fort, in New Delhi. The action plan of this initiative is based on 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 States Government policies
within this domain, such as License Raj, Land Permissions, Foreign Investment Proposals, and
Environmental Clearances. It was organized by The Department for promotion of industry and internal
trade (DPI&IT). A startup defined as an entity that is headquartered in India, which was opened less than
seven years ago, and has an annual turnover less than ₹25 crore (US$3.5 million). Under this initiative,
the government has already launched the I-MADE program, to help Indian entrepreneurs build 1 million
mobile app start-ups, and the MUDRA Banks scheme (Pradhan Mantri Mudra Yojana), an initiative
which aims to provide micro-finance, low-interest rate loans to entrepreneurs from low socioeconomic
backgrounds. Initial capital of ₹200 billion (US$2.8 billion) has been allocated for this scheme. new
product/process for the entire market or fraction of the market. Start-ups must not be confused with small
business, as the biggest difference being is INNOVATION. Recently government of India has launched
―Start-up India‖ initiative to foster/support and encourage start up efforts in Ind

3
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 a very 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-ups in India is technology based which is fuelled by young
IIT’s graduates as the patterns of start-ups in India further suggests, they are undertaken in very
unconventional terrain like medical etc. The important question remains is, how start-ups are shaping the
very structure of economy in India or elsewhere (In similar economies). The overall impact of start-ups is
very visible initially then, only those ideas persist which are smartly implemented. In India government is
constantly trying to create an environment which is both conducive and optimum for stat ups. The reason
is very simple, start-ups are necessary for the entrepreneurial and innovative growth of any nation. There
are nations which are smaller than ours and less naturally equipped than ours but made tremendous
growth and advancements in the field of economy and overall development. The secret of their success is
nothing but an appetite for innovation. If India wants to be in the front lines with developed nations in the
world, innovation is the key to become so. Fortunately, India is endowed with youngest population which
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 into successful implementation. India has
produced some of the leading start-ups in the world, which are working as the lighthouse for the rest. The
prominent example being OYO Rooms and Zomato (both catering to a very different market segment
and objectives). In short, the start-up scenario is looking very convincing and bright as the investments is
growing in India start-ups from worldwide investing bodies both organized and individuals. The recent
example of such investment being the huge multibillion-dollar investments in various start-ups
functioning in India like Ola and Flipkart. In a way start up era has started in India, and it is the time to
give its due push. 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 economy and its development and has the objective to fire
the entrepreneurial blood at the bottom level. 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 and effective instruments for India’s transformation. An idea can be converted into a start-up.
Even sometimes the crisis becomes the opportunity and it gives birth to the start-ups. Many times, we
have seen that we have an idea but we do not dare to initiate it or we do not find it worthy.

4
On the other hand, other people take that idea as an opportunity and mobilise into reality. The main
objective of the govt is to reduce the load on the start-ups hence allowing them to concentrate fully on
their business and keeping the low cost of adherence.

The Ministry of Human Resource Development and the Department of Science and Technology have
agreed to partner in an initiative to set up over 75 such startup support hubs in the National Institutes of
Technology (NITs), the Indian Institutes of Information Technology (IIITs), the Indian Institutes of
Science Education and Research (IISERs) and National Institutes of Pharmaceutical Education and
Research (NIPERs).

The Reserve Bank of India said it will take steps to help improve the ‗ease of doing businesses in the
country and contribute to an ecosystem that is conducive for the growth of start-up businesses.
Softbank, which is headquartered in Japan, has invested US$2 billion into Indian startups. The Japanese
firm has pledged to investment US$10 billion. Google declared to launch a startup, based on the highest
votes in which the top three startups will be allowed to join the next Google Launchpad Week, and the
final winner could win an amount of US$100,000in Google cloud credits. Oracle on 12 February 2016
announced that it will establish nine incubation centers. In Bengaluru, Chennai, Gurgaon, Hyderabad,
Mumbai, Noida, Pune, Trivandrum and Vijayawada.

5
2023 Start-up State Ranking are as follows:

 Best performer: Gujarat

 Top performers: Karnataka, Kerala, Odisha, and Rajasthan
 Leader: Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh
 Aspiring leaders: Haryana, Himachal Pradesh, Jharkhand, UP
 Emerging states: Assam, Delhi, Jammu Kashmir, Maharashtra, Punjab, Tamil Nadu, and
Uttarakhand
 Beginners: Chandigarh, Manipur, Mizoram, Nagaland, Puducherry

Kerala has initiated a government start-up policy called "Kerala IT Mission" which focuses on fetching
₹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 the funding raised by its
incubator from Central government with 1:1. Telangana has launched the largest incubation centre in
India as "T- Hub". Andhra Pradesh has allocated a 17,000-sq.ft. Technological Research and Innovation
Park as a Research and Development laboratory. It has also created a fund called "Initial Innovation
Fund" of ₹100 crore (US$14 million) for entrepreneurs. The government of Madhya Pradesh has
collaborated with the Small Industries Development Bank of India (SIDBI) to create a fund of ₹200 crore
(US$28 million). Rajasthan has also launched a "Start-up Oasis" scheme. In order to promote start-ups in
Odisha, the state government organized a two-day Start-up Conclave in Bhubaneswar on November 28,
2016.

3.1 Startup Company:

A start-up or start-up is started by individual founders or entrepreneurs to search for a repeatable and
scalable business model. More specifically, a start-up is a newly emerged business venture that aims to
develop a viable business model to meet a marketplace need or problem. Founders design start-ups to
effectively develop and validate a scalable 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 grow large.
Start-ups face high uncertainty and do have high rates of failure, but the minority that go on to be
successful companies have the potential to become large and influential.

6
Some start-ups become unicorns, i.e. privately held start-up companies valued at over $1 billion.
According to TechCrunch, there were 279 unicorns as of March 2018, with most of the unicorns located
in China, followed by the United States. The largest unicorns founded as of October 2018 included Ant
Financial, Byte Dance, Uber, Xiaomi, and Airbnb.

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 fund management, 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.

3. Register through app:

An online portal, in the shape of a mobile application, will be launched to help start-up founders to
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 conceptualized by the central
government. 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 corpus of Rs
10,000 crore over four years, to support upcoming start-up enterprises. The Life Insurance
Corporation of India will play a major role in developing this corpus. A committee of private
professionals selected from the start-up industry will manage the fund.

7
6. National Credit Guarantee Trust Company:
A National Credit Guarantee Trust Company (NCGTC) is being conceptualized 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 Gains Tax. 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 would revolutionize 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.

10. Building entrepreneurs:

Innovation-related study plans for students in over 5 lakh schools. Besides, there will also be an
annual incubator grand challenge to develop world class incubators.

11. Atal Innovation Mission:

The Atal Innovation Mission will be launched to boost innovation and encourage talented youths.

12. Setting up incubators:

A private-public partnership model is being considered for 35 new incubators and 31 innovation
centers at national institutes.

8
13. Research parks:
The government plans to set up seven new research parks, including six in the Indian Institute of
Technology campuses and one in the Indian Institute of Science campus, with an investment of Rs
100 crore each.

14. Entrepreneurship in biotechnology:

The government will further establish five new biotech clusters,50 new bio incubators,150
technology transfer offices and 20 bio-connect offices in country.

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 patent applications and
other official documents.

17. Rebate:
A rebate amount of 80 percent of the total value will be provided to the entrepreneurs 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 for their
problems. If they fail again, the government will provide an easy way out.

9
1.5 Entrepreneurship

Entrepreneurship is the process of designing, launching and running a new business, which is often
initially a small business. The people who create these businesses are called entrepreneurs.
Entrepreneurship has been described as the "capacity and willingness to develop, organize and manage a
business venture along with any of its risks in order to make a profit". While definitions of
entrepreneurship typically focus on the launching and running of businesses, due to the high risks
involved in launching a start-up, a significant proportion of start-up businesses have to close due to "lack
of funding, bad business decisions, an economic crisis, 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 upon opportunities to translate inventions
or technology into new products: "The entrepreneur is able to recognize the commercial potential of the
invention and organize the capital, talent, and other resources that turn an invention into a commercially
viable innovation." In this 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 business enterprise
who, by risk and initiative, attempts to make profits". Entrepreneurs act as managers and oversee the
launch and growth of an enterprise Early-19th-century French economist Jean-Baptiste Say provided a
broad definition of entrepreneurship, saying that it "shifts economic resources 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 be opportunities or situations to recombine resources to generate profit. Second,
entrepreneurship requires differences between people, such as preferential access to certain individuals or
the ability to recognize information about opportunities.

10
 CHAPTER 2
LITERATURE REVIEW

2.1 The Imperfect Education System and Conservative Lifestyle:

The education system is one of hindrance for start-ups. In college, students are usually trained with
advanced techniques but lack of marketing, sales and operational ability and leadership skills needed to
advance their own enterprises. In addition, conservative lifestyle also contributes as one of obstacles. As
a culture of family remains, family remains skeptical to change 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 providing for the family instead of following some ―whimsical‖ dream (Au &
Kwan, 2009).

2.2 Lack of Support Networks and Entrepreneurship Ecosystem:

One of the major challenges is that there is severe shortage of start-up support networks and
entrepreneurship ecosystems. In many western countries, there are special institutions serve as
incubators, start-up accelerators, start-up competitions for entrepreneurs to put their ideas to test and
obtain necessary guidance. In India, incubators, start-up accelerators, and start-up competitions are
slowly making their way into the first-tier cities, but there truly are not enough to 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 necessary funding to test out their ideas. The lack of these facilities makes it
more difficult for entrepreneurs to find investors. In return, investors are more difficult to find
entrepreneurs as well. Even if entrepreneurs are able to find investors, they will face an entirely different
set of challenges. Indian culture inherently does not promote entrepreneurship. Conversely, it encourages
stability, employment at large state- owned or private organizations and, above all, teaches people to be
risk averse.

11
2.3 India lacks enough angel investors to fund start-ups:

Unlike the West, India does not have an adequate number of angel investors who can fuel 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 can support budding entrepreneurs from an
early stage. But this is not happening in India and there is a serious lack of it,‖ NASSCOM Vice-
President Rajat Tandon told PTI. ―High net-worth individuals and corporate executives, among others,
should come forward and participate in this growth story,‖ he said. A recent report by NASSCOM had
said India ranks third among global start-up ecosystems, with more than 4,200 new-age companies.
Tandon said, ―The case is very different in countries like the US. People are just waiting to invest in
good companies. We should also have something like that.‖ ―Mainly, investors (in India) are afraid
because there is a high risk of failure in these investments and also there is a lack of policy on such
investments,‖ he added. ―Why will investors put money in such companies? They need tax benefits
and a number of other things to put in their money. We have already written about these things to the
Government and I am sure we can expect something by the year-end,‖ he said. In his Independence Day
speech, Prime Minister Narendra Modi had announced a new campaign „Start-up India; Stand up India‟
to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job
creation in the country. ―At NASSCOM, we are not only encouraging investors but also asking people
to mentor start- ups. Like someone has a design business, they can help start-ups develop UIs and guide
them in the process. In return they take some equity,‖ he said. And there are people like Ratan
Tata and Azim Premji, who are making a slew of investments and helping these young entrepreneurs.
They are the inspiration, he said. Ratan Tata has invested in a number of companies including Ola,
Snapdeal, Paytm, Urban Ladder, and Bluestone. Wipro boss Azim Premji has funded companies such as
Myntra and Amagi, among others, through his investment arm Premji Invest.

2.4 Human Talent:

Compared to large mature enterprises, small start-ups are in an exponentially more difficult dilemma and
encountering much severe challenging in recruiting due to the reason that it cannot pay high salary to its
employees or offer any career development opportunities aside from building their business from the
ground up. What is worse is that working for a start-up in China is far less glamorous than working for a
start-up in the west due to culture differences. It is a disaster for a company who needs to execute on their
business plan with minimal errors to just survive the month.

12
2.5 Women Entrepreneur:

Melanne Vernerian, Women entrepreneurs are a vital source of growth that can power our economies for
decades, yet they face tremendous challenges to their full economic participation. The GEM Women ‗s
Report provides important data which is critical to our understanding of women-run SMEs. V
Krishnamoorthy and R Balasubramaniam, identified the important women entrepreneurial motivation
factors and its impact on entrepreneurial success. The study identified ambition, skills and knowledge,
family support, market opportunities, independence, government subsidy and satisfaction are the
important entrepreneurial motivational factors. The study also concluded that ambition knowledge and
skill independence dimensions of entrepreneurial motivational has significant impact on entrepreneurial
success.

Jalbert, (2000) performed a study to explore the role of women entrepreneurs in a global economy. It also
examined how women ‗s business associations can strengthen women ‗s position in business and
international trade. The analysis is performed on the basis of facts and data collected through field work
(surveys, focus groups and interviews) and through examining the existing published research. The study
has shown that the women business owners are making significant contributions to global economic
health, national competitiveness and community commerce by bringing many assets to the global market

Bowen & Hirsch, (1986), compared & evaluated various research studies done on entrepreneurship
including women entrepreneurship. Its summaries various studies in this way that female entrepreneurs
are relatively well educated in general but perhaps not in management skills, high in internal locus of
control, more masculine, or instrumental than other women in their values likely to have had
entrepreneurial fathers, relatively likely to have first born or only children, unlikely to start business in
traditionally male dominated industries & experiencing a need of additional managerial training. Singh,
(2008), identifies the reasons & influencing factors behind entry of women in entrepreneurship. He
explained the characteristics of their businesses in Indian context and also obstacles & challenges.

13
He mentioned the obstacles in the growth of women entrepreneurship are mainly lack of interaction with
successful entrepreneurs, social un- acceptance as women entrepreneurs, family responsibility, gender
discrimination, missing network, low priority given by bankers to provide loan to women entrepreneurs.
He suggested the remedial measures like promoting micro enterprises, unlocking institutional framework,
projecting & pulling to grow & support the winners etc. The study advocates for ensuring synergy among
women related ministry, economic ministry & social & welfare development ministry of the Government
of India.

14
 CHAPTER 3
RESEARCH AND METHODOLGY
3.1 Objectives:

(A) Meaning:
• A research objective is a clear, concise, declarative statement, which provides direction 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 to achieve.
• A well-known objective will be SMART:
• S – 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 timeframe and with the
available resources.
• The objective of research project summarizes what is to be achieved by the study.

15
(C) 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.

3.2 Data Collection Method:

The data collected in this research project is totally based on secondary data. The facts and figures are
taken by the different resources.

(A) Meaning:
Secondary data means data that are already available i.e., they refer to the data which have already been
collected and analysed by someone else. When the researcher utilises secondary data, then he has to look
into various sources from where he can obtain them. In this case he is certainly not confronted with the
problems that are usually associated with the collection of original data.

16
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 foreign
governments or of international bodies and their subsidiary organizations; (c) technical and trade
journals; (d) books, magazines and newspapers; (e) reports and publications of various associations
connected with business and industry, banks, stock exchanges, etc.; (f) reports prepared by research
scholars, universities, economists, etc. in different fields; and (g) public records and statistics, historical
documents, and other sources of published information. The sources of unpublished data are many; they
may be found in diaries, letters, unpublished biographies and autobiographies and also may be available
with scholars and research workers, trade associations, labor bureaus and other public/ private individuals
and organizations.

17
(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 and cost-efficient: the data was collected
by someone other than the researcher. Administrative data and census data may cover both larger and
much smaller samples of the population in detail. Information collected by the government will also
cover parts of the population that may be less likely to respond to the census (in countries where this is
optional).
A clear benefit of using secondary data is that much of the background work needed has already been
carried out, such as literature reviews or case studies. The data may have 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 data generally have a pre-established degree of validity and reliability which need
not be re-examined by the researcher who is re-using such data.

Secondary data can provide a baseline for primary research to compare the collected primary data results
to and it can also be helpful in research design.
However, secondary data can present problems, too. The data may be out of date or inaccurate. If using
data collected for different research purposes, it may not cover those samples of the population
researchers want to examine, or not in sufficient detail. Administrative data, which is not originally
collected for research, may not be available in the usual research formats or may be difficult to get access
to.

3.3 Women Entrepreneurs in India:

Women Entrepreneurs may be defined as the women or a group of women who initiate, organize, and
operate a business enterprise. The Government of India has defined women entrepreneurs as an
enterprise owned and controlled by women having a minimum financial interest of 51 per cent of the
capital and giving at least 51 per cent of the employment generated in the enterprise to women. Women
entrepreneurs engaged in business due to push and pull factors which encourage women to have an
independent occupation and stands on their own legs. A sense towards independent decision-making on
their life and career is the motivational factor behind this urge. With the change of time there is
tremendous upliftment in the status of Indian women entrepreneur.

18
(A) Status of women entrepreneurs in India:

Entrepreneurship is considered as one of the most important factors contributing to the development of
society. India has been ranked among the worst performing countries in the area of women
entrepreneurship in gender-focused global entrepreneurship survey, released in July 2013 by PC maker
Dell and Washington based consulting firm Global Entrepreneurship and Development Institute (GEDI).
Of the 17 countries surveyed India ranks 16th, just above Uganda. Countries like Turkey, Morocco and
Egypt has outperformed India. Status of higher education in women in India came out to be lower than
most countries in the world. At present, women entrepreneurial role is limited in the large-scale
industries and technology- based businesses. But even in small scale industries, the women‘s
participation is very low. As per the third all-India census of Small-Scale Industries, only 10.11% of the
micro and small enterprises were owned by women, and only 9.46% of them were managed by women.

(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 kitchen activities, 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 main reasons for women to emerge into business ventures.
19
Women Entrepreneur is a person who accepts challenging role to meet her personal needs and become
economically independent. A strong desire to do something positive is an inbuilt quality of
entrepreneurial women, who is capable of contributing values in both family and social life. With the
advent of media, women are aware of their own traits, rights and also the work situations.

Role of Government to develop Women Entrepreneurs in India: Development of women has been a
policy objective of the government since independence. Until the 70s the concept of women development
was mainly welfare oriented. In 1970s, there was a shift from welfare approach to development approach
that recognized the mutually reinforcing nature of the process of development. The 80s adopted a multi-
disciplinary approach with an emphasis on three core areas of health, education and employment.
Women were given priorities in all the sectors including SSI sector. Government and non- government
bodies have paid increasing attention to women economic contribution through self- employment and
industrial ventures.

The First Five-Year Plan (1951-56) envisaged several welfare measures for women. Establishment of
the Central Social Welfare Board, organization of Mahala Mandal’s and the Community Development
Programmer were a few steps in this direction.

In the second Five-Year Plan (1956-61), the empowerment of women was closely linked with the
overall approach of intensive agricultural development programs.

The Third and Fourth Five-Year Plans (1961- 66 and 1969-74) supported female education as a major
welfare measure.

The Fifth Five-Year Plan (1974-79) emphasized training of women, who needed income and
protection. This plan coincided with International Women ‗s Decade and the 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 Social Welfare.

The Sixth Five-Year Plan (1980-85) saw a definite shift from welfare to development. It recognized
women ‗s lack of access to resources as a critical factor impending their growth.

20
Steps taken in Seventh Five-Year Plan:

In seventh five-year plan, a special chapter on the ―Integration of women in development‖ was
introduced by Government with following suggestion.

(I) Specific target group:

It was suggested to treat women as a specific target group in all major development programs of the
country.
(ii) Arranging training facilities:
It is also suggested in the chapter to devise and diversify vocational training facilities for women to suit
their changing needs and skills.

(iii) Developing new equipment’s:

Efforts should be made to increase their efficiency and productivity through appropriate 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.

21
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 the Eight-Five Year Plan:

(i) Prime Minister Rojgar Yojana and EDPs were introduced to develop entrepreneurial qualities
among rural women.
(ii) ‗Women in agriculture scheme was introduced to train women farmers having small and marginal
holdings in agriculture and allied activities.
(iii) To generate more employment opportunities for women KVIC took special measures in remote
areas.
(iv) Women co-operatives schemes were formed to help women in agrob-ased industries like dairy
farming, poultry, animal husbandry, horticulture etc. with full financial support from the Government.
(v) Several other schemes like integrated Rural Development Programs

(IRDP), Training of 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 the
development of women entrepreneurs.

The Government of India has introduced the following 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 develop women entrepreneurs in rural, semi-urban and urban areas by
developing entrepreneurial qualities.
(b) Women Comkp0onent Plant, a special strategy adop0ted by Government to provide assistance to
women entrepreneurs.
(c) Swarna Jayanti Gram Swarozgar Yojana and Swarna Jayanti Setkhari Rozgar Yojana were
introduced by government to provide reservations for women and encouraging them to start their
ventures.

22
(d) New schemes named Women Development Corporations were introduced by government to help
women entrepreneurs in arranging credit and marketing facilities.
(e) State Industrial and Development Bank of India (SIDBI) has introduced following schemes to assist
the women entrepreneurs. These schemes are:
(i) Mahila Udyam Nidhi
(ii) Micro Cordite Scheme for Women
(iii) Mahila Vikas Nidhi
(iv) Women Entrepreneurial Development Programs
(v) Marketing Development Fund for Women

4 Consortium of Women entrepreneurs of India provides a platform to assist the women

entrepreneurs to develop new, creative, and innovative techniques of production, finance and marketing.
5 Training programs: The following training schemes specially for the self- employment of women
are introduced by government:

(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 in rural 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, handlooms handicrafts, bamboo products etc.

23
Promotional Organizations to help Women Entrepreneur:

Federation of Indian Women Entrepreneur–The FIWE was started in 1993 at the fourth inter
national conference of women entrepreneurs held in December at Hyderabad. Its main function was to
establish networking and to provide a package of service to women entrepreneurs association in India.
Association of women entrepreneurs in different states are affiliated to FIWE, so that they can have
networking.

Federation of Ladies Organization - FLO was formed in 1983 as a national level forum for women
with the objective of women empowerment. FLO has spectrum of activities in order to promote women
entrepreneurship and professional excellence.

World Association of Women Entrepreneurs - The world association of Women entrepreneurs is an

international women organization. It aims is to bring together all women who are qualified to take up an
active and leading part in employers’ organization along with their male colleagues.

24
National Women Development Corporation - NWDC serves all women especially in rural 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 of India ‗s
institution for women totally devoted to entrepreneurship development.

Women’s India trust (WIT) - The trust was established in 1968 by Kamila Tyabji. WIT center at
Panvel, 40kms, from Mumbai. The Kamila trust UK was set up 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.

Consortium 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 women entrepreneur of India
started in year 2001 provides a common platform to help women entrepreneurs in finding innovative
techniques of production marketing and finance.

Self-help groups (SHGs) - A SHGs’ is a small, economical homogeneous and significant group of rural
and urban poor, voluntarily formed to save and mutually agreed to contribute to common fund to be lent
to its members as per group decision.

25
3.4 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 per statistics,
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 behind their failure. From the lack of talent to
changing market dynamics, these top reasons can become a nightmare for any entrepreneur who wants to
start a new venture in the ever-changing

26
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 themselves from society. The divide between the
tech-driven lifestyle of millennials and lack of understanding for society‘s demands contribute towards
failing business models. The educational pressure is one of the many reasons that experts believe to be
the source for lack of understanding between people and society.

Lack of fresh and Innovative Ideas:

Almost every niche market in India is suffocated with multiple startups trying to provide solutions 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 market share makes an entrepreneur vulnerable to
mistakes by producing the wrong product.

27
Lack of People with Hands-on Experience:

The startup ecosystem in India has a dearth of talent due to issues like brain drain. Due to the competition
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 new crop 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 to a startup‘s demise.

Limited Access to Funding:

Entrepreneurs have to fight hard to get funding for their startups nowadays. To get started, they use their
savings or take money from friends and family. Very few are lucky to get angel funding. Moreover,
venture capitalists tend to finance only those business ideas that can provide a good return on investment.
This results in majority of young entrepreneurs missing VC funding. As a result, most Indian
entrepreneurs are not able to continue their venture due to lack of funding.

Lack of Understanding between Technical and Management Teams

There 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 technical know-how among
management graduates and the lack of managerial knowledge among technical 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, offering high salaries to employees makes
the startup eat into its resources. The shortage of funds leads to instability within the startup, which leads
to bad decisions.

28
Lack of Interpersonal and Soft Skills

Most entrepreneurs in India are found to lack interpersonal and soft skills. Due to poor communication
skills, an entrepreneur increases the failure rate of his/her startup. The lack of such essential skills makes
a startup not able to compete in international market. Also, 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 have successfully built a product
based on the needs of the society and are running profitably, will face the issue of scalability. In such
cases, lack of awareness or no mentorship becomes the deciding factors behind a startup‘s failure. Due to
inexperience, entrepreneurs fail to understand 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. Such scenarios arise when a startup‘s
core team is unable to make timely decisions due to lack of industry insight, not conducting thorough
research about the niche market, targeting a wide 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 many cooks spoil the broth‖
comes in when everybody is the boss. Direction comes from a single person and that position must be
stable, secure, and given space to experiment, with a reasonable error margin.

29
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 are the only way to build a business. With a well-laid appraisal
mechanism, talent must be timely rewarded and given a greater platform so that 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.

3.5 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 generation of
revenues through the sale of products and services that are unique and fills the gap of the consumer needs
that are in the market. India is fifth in the world in the aspect of the startups with 3100 startups
functioning since the last 3-4 years. 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 than 94% of the
business leads to the falling scenario due to the lack of 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 of funding to the business. So, most of the times this inquisitive question hits
the mind of every other 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 the funding 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 leaps and bounds through the proper source of funding.

30
(A) Venture Capital:

Venture Capital is money provided by professionals who invest and manage young rapidly growing
companies that have the potential to develop into significant economic contributors. According to SEBI
regulations, venture capital fund means a fund established in the form of a company or trust, which raises
money through loans, donations, issue of securities or units and makes or proposes, to make investments
in accordance with these regulations. 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 company
who 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 the Central Government controlled development finance institutions: This group contains
Venture Capital Funds that are promoted by development. Finance institutions that are controlled by the
Central Government of the country. The examples are IFCI Venture Capital Funds Ltd. (IFCI Venture)
and SIDBI Venture Capital Limited (SVCL).
Promoted by State Government Controlled development finance Institutions: This group includes
Venture Capital Funds which are promoted by development finance institutions controlled by state
government. Some of the famous examples are: Hyderabad Information Technology Venture Enterprises
Limited (HITVEL), Kerala Venture Capital Fund Private Limited, Gujarat Venture Finance Limited
(GVFL), Punjab InfoTech Venture Fund.

Overseas Venture Capital Funds: This group comprises of Venture Capital funds from outside India.
Like: BTS India Private Equity Fund Ltd., Walden International Investment Group, SEAF India
Investment and Growth Fund.

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 should love your business in the first 5
minutes.‖ Sequoia partners state you can do this in three simple steps, which are:

31
• Explain what’s changed. Detail the innovation, industry shift, or problem that presents substantial
opportunity for your company.
• Explain what you do. In one sentence, show how your company can capitalize on this opportunity.
• Explain the facts. Get to your company’s story and financials quickly. Lay out the opportunity 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 an immature
entrepreneur and don’t get any support from any bank or any other financial source unless 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 funding is 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 maturity stage of the business, this is considered as an edge in
front of the investors as they 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 in front of the
layman on a platform where he orients them about his business, the process and how revenues would be
generated along with the seed capital amount and where would the amount be invested into. The crowd
then reverts the pitch in the form of donation or form of pre-buying orders for the entrepreneur. This type
of sourcing not only full-fills the need of the entrepreneur but also generates an audience for him who are
willing to fund his idea as well as support it giving a boost for the business in the initial years. This also
grabs the attention of the venture 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.

32
(D) Angel Investors:

Angels are generally wealthy individuals or retired company executives who invest directly in small
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 $25,000 to $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 of directors and an assurance of transparency.

Angels tend to keep a low profile. To meet them, you have to contact specialized associations or search
websites on angels. The National Angel Capital Organization (NACO) is an umbrella organization that
helps build capacity for Canadian angel investors. You can check out their member‘s directory for ideas
about who to contact 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 to grow 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 and equipment 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 a small seed capital along with a return of a
large mentor network against the stakes of 2-10% of your business. Thus, incubators are like your parents
who nurture you and the accelerators are the programs which give you huge opportunities. India holds
some popular names of Amity Innovation Incubator & Angel Prime.

33
(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 2014-15 which is valued at 10,000 crores for Indian
startups. There are more programs launched by the government to take the 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 security against the loan you borrow for your startup under the
name of Credit Guarantee Fund Trust for Micro and Small Enterprises. The government also started with
MUDRA with an amount of 20,000 crores to sanction loans to startup once you clear the criteria. There
are also institutions who 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 individuals with ample
amount of financial resources for your startup. These individuals are having their existing business and
are looking for opportunities to invest into your business with their resources for the time span of 1-3.
After this time span, they expect the amount of the investment to be twice or thrice during this period.
They mainly invest in those businesses which are having the highest caliber level to sustain in the market
and generate good revenue streams in short span of time. The first advantage of this type of funding that
you can design acustom investment based on the funds you need which give you an edge. Lastly, the high
net-worth individuals 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 offer loans 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 business model, the valuation of
various inventories and the project report along with other documentation.

34
 But now the process is hassle free and without any collateral. Under all the banks there are 7-8 different
types of loans for the SME Business. But the only thing that needs to be taken 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 as compared 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 of your
talents, they will be willing to support you regardless of what you want to do. Family and friends are the
only ones who know your potential and will be willing to give you money to start your business.

This may seem like a great way of gaining investment partners, but everything has its drawbacks.
Acquiring loans or investment form family or friends may be advantageous to some businesses as they
have faith in your talents and your success. But for others that require expert assistance or guidelines,
angel investors are the best way as your family might not have those experiences which are needed.
This may be a good way for you to raise money as they love and care for you but it is not fun when you
lose it as it may affect your relationship with that person forever. A good way of raising funds from your
family may be if you choose those who have the knowledge of business and its risks while investing.
Regardless of this fact, it is important to behave like a professional with them, and while they are
considering investing, you should lay out all the risks involved in the investment so they can decide at
first.

3.6 Entrepreneurship Development Plan:

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.
It is interesting to note that entrepreneurship besides providing self-employment to the entrepreneur 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 think why and how?)

35
Further, each business gives rise to other businesses– the suppliers of raw materials and components,
service providers (be it transport, courier, telecom, distributor middlemen 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 is interesting 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‘ of entrepreneurs to pursue its developmental plans. In
fact, plans for economic development would bear little fruit unless entrepreneurship development is
regarded as a deliberate process of making people aware of entrepreneurship as a career at an early age
and creating situations 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 other financial
and psychological rewards. Taking to entrepreneurship is surely more a matter of aspiring 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, labour and capital. However, it should surprise you that as regards its French origin, the
term ‗entrepreneurship‘ (derived from the verb ‗entrepreneur meaning ‗to undertake‘) pertained not to
economics but to undertaking of military expeditions. So is true of many terms in management such as
strategy (a course of action to beat the competition, the ‗enemy) and logistics (movement of men and
machines for timely availability),etc. Historically, as wars are followed by economic reconstruction, it
should 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 develop new products, explore new
markets, update technology and devise innovative ways of marketing and so on. The term ‗entrepreneur
was first introduced in economics by the early 18th century French economist Richard Cantillon. In his
He formally defined the entrepreneur 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 in economics shows that entrepreneurship implies risk/uncertainty bearing; coordination of
productive resources; introduction of innovations; and the provision of capital.

36
We would like to define entrepreneurship as a systematic, purposeful and creative activity of identifying
a need, mobilizing resources and organizing 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 uncertainties associated
with business. This definition points to certain characteristics of entrepreneurship that we turn our
attention to.

Characteristics of Entrepreneurship:

In 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 cannot help but marvel at the beauty
of the process: how does one first of all decide to choose own business as a career; how does one sense a
market opportunity; how does one muster up courage to embark upon it, and mobilize the requisite
resources, etc.; so much so that recourse to entrepreneurship, in common parlance, is considered as an
exclusive preserve of a few gifted individuals. In the following paragraphs, our effort would be to
establish entrepreneurship as a career 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 start today. 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 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. Such an
understanding of the process of entrepreneurship is crucial for dispelling the myth 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 one may try to legitimize unlawful actions as entrepreneurship on the grounds that
just as entrepreneurship entails risk, so does illicit businesses. Purpose of entrepreneurship is creation of
value for personal profit and social gain.

37
3. Innovation: From the point of view of the firm, innovation may be cost saving or revenue-enhancing.
If it does 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. You must appreciate
that in the absence of entrepreneurship ‗matter‘ does not become a ―resource.‖ By combining the various
factors of production, entrepreneurs produce goods and services that meet the needs and wants of the
society. Every entrepreneurial act result in income and wealth generation. Even when innovations destroy
the existing industries, for example, Xerox machines destroyed carbon paper industry, mobile telephony
threatens landline/ basic telephony, net gains accruing to the economy lend such entrepreneurial actions
as commendable as the acts of creative destruction. Entrepreneurship is creative also in the sense that it
involves innovation- introduction of new products, discovery of new markets and sources of supply of
inputs, technological breakthroughs as well as introduction of newer organizational forms for doing
things better, cheaper, and faster and, in the present context, in a manner that causes the least harm to the
ecology/environment. It is possible that entrepreneurs in developing countries may not be pioneering/
innovative in introducing path breaking, radical innovations. They may be the first or second adopters of
technologies developed elsewhere. That does not make their achievement small. For imitating
technologies from developed world to the indigenous setting is quite challenging. A lady entrepreneur
wanting to introduce thermal pads for industrial heating faced tremendous reluctance 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 to reinvent the wheel. The global electronics major, Sony
did not invent the transistor! It used the transistor to build entertainment products that are world leaders.
Organization of Production: Production, implying creation of form, place, time personal utility, 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. It may be pointed out that the entrepreneur may not possess any of these resources; he
may just have the ‗idea‘ that he promotes among the resource providers. In an economy with a well-
developed financial system, he has to convince just the funding institutions and with the capital so
arranged he may enter into contracts of supply of equipment, materials, utilities (such as water and
electricity) and technology. What lies at the core of organisation of production is the knowledge about
availability and location of the resources as well as the optimum way to combine them. An entrepreneur
needs negotiation skills to raise these in the best interests of the enterprise.

38
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 of supply of requisite inputs.
For example, whether it is a matter of putting together an automobile manufacturing unit or manufacture
of burger/pizza, besides cultivating a market and developing products to suit its tastes and preferences,
there would be a need to develop a pool of suppliers of the diverse components or elements that go into
their manufacture.

1. Risk-taking: As the entrepreneur contracts for an assured supply of the various inputs for his project,
he incurs the risk of paying them off whether or not the venture succeeds. Thus, landowner gets the
contracted rent, a capital provider gets the contracted interest, and the workforce gets the contracted
wages and salaries. However, there is no assurance of profit to the entrepreneur. It may be pointed out
that the possibility of absolute ruin may be rare as the entrepreneur does everything within his control to
de-risk the business. For example, he may enter into prior contract with the customers of his production.
So much so that he may just be contract manufacturer or marketer of someone else‘s products! What is
generally implied by risk taking is that realized profit may be less than the expected profit. It is generally
believed that entrepreneurs take high risks. Yes, individuals opting for a career in entrepreneurship 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 to earn 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. The situation is similarly to a motorcyclist in the ‗ring of death‘ or a
trapeze artist in circus. While the spectators are in the awe of the high-risk, the artists have taken a
calculated risk given their training, skills, and of course, confidence and daring. It is said that the
entrepreneurs thrive on circumstances where odds favoring and against success area even, that is 50:50
situations. 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; they dislike lower risk
situations as business ceases to be a game/fun! Risk as such more than a financial stake, becomes a
matter of personal stake, where less than expected performance causes displeasure and distress. The
characteristics of entrepreneurship discussed as above apply in diverse contexts, so does the usage of the
term, viz., Agricultural/Rural Entrepreneurship, Industrial entrepreneurship, Techno-preneurship, Net
preneurship, Green/Environmental or Eco-preneurship, Intra-corporate/firm or Intra-preneusrhip and
Social entrepreneurship.

39
Relations between Entrepreneurship and Management:

Entrepreneurship is about business start-ups and renewals. That is, it appears at the time of starting a new
business, disappears for some time in the course of stabilising the venture 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 an entrepreneur when he actually ‗carries out new combinations,
and loses that character as soon as he has built up his business, when he settles down to running it as
other people run their businesses. In developed countries, the distinction between the entrepreneurial
focus on start-ups and managerial focus on routine is so sharp that it is argued that once the project has
reached 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 for entrepreneurship as
the entrepreneur remains attached even to the day-to-day operations of the venture. In fact, their lacking
in managerial skills is often forwarded as the cause of business failures.

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. In the present Indian context, where on the one hand, employment opportunities in public
sector and large-scale sector are shrinking, and on the other, vast opportunities arising from globalisation
are waiting to be exploited; entrepreneurship can really take India to the heights of becoming a super
economic power. Studies by Global Entrepreneurship Monitor, a research programme involving annual
assessment of the national level of entrepreneurial activity across a number of countries show that
differences in the levels of entrepreneurial activity account for the differences in the level of economic
growth to the extent of as much as 33%. What is that the entrepreneurs do to affect economic
development? This leads us to a discussion of the functions of the entrepreneurs in relation to economic
development. As the enterprise is the object of their endeavour, it is also necessary that we examine their
functions in relation to the enterprise as well. Thus, the need for entrepreneurship arises from the
functions the entrepreneurs perform in relation to the process of economic development and in relation to
the business enterprise.

40
Functions of Entrepreneurs in Relation to Economic development:

You are aware that entrepreneurs organise the production process. In the absence this function,
all other resources, namely land, labour and capital would remain idle. They may not be
inventing/discovering the products, their role in commercial exploitation of the advancements in science
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 entrepreneurial intervention, 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 economic development. You are aware that income is generated in the process of production. So,
entrepreneurs generate income via organisation of production be it agriculture, manufacturing or 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 the residual income accrues to the
entrepreneur in the form of profits. As rent and interest accrue to those few who have land and capital
respectively whereas larger masses are destined to earn their incomes via wage employment, the biggest
contribution of the entrepreneurship lies in capital 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 productive capacity of the economy and hence results in capital formation. In fact, GDP and capital
formation are related to each other via Capital Output Ratio (COR); more precisely Incremental Capital
Output Ratio (ICOR) that measures the percentage increase in capital formation required 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, by investing their own savings and
informally mobilizing the savings of their friends and relatives contribute to the process of capital
formation. These informal funding supplements the funds made available by the formal means of raising
resources from banks, financial institutions, and capital markets.

41
3. Generation of Employment: Every new business is a source of employment to people with different
abilities, skills, and qualifications. As such entrepreneurship does not become a source of livelihood to
those who do have capital to earn interest on nor have the land to earn rent. In fact, what they earn is not
only a livelihood 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 as indirectly.

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 wholesalers and retailers of stationery products. These immediate linkages
induce further linkages. For example, greater opportunities for refill manufacturers would mean
expansion of business for ink manufacturers. In general, there are greater opportunities for transporters,
advertisers, and, so on. So, via a chain- reaction, entrepreneurship provides a spur to the level of
economic activity.

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-capital
ratios. You are aware that if labour is provided with good implements (capital), its productivity increases.
6. Increasing the Spectrum and Scope of Economic Activities: Development does not merely mean
‗more and ‗better of the existing, it also and more crucially means diversification of economic
activities– across the geographic, sectoral and technological scope. You are aware that underdeveloped
countries are caught in the vicious cycles on the demand as well as supply side. Entrepreneurs penetrate
into and break these cycles, for example, 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
a manufacturing hub for the global markets for diverse products. Economic development is also
constrained by the supply-side pressures resulting into absence of capacity to meet the demand whether
domestic or overseas. Entrepreneurs mobilise local and even overseas resources to augment the
productive capacity of a country. Indian Multinational Giants is fast becoming a reality.

42
Entrepreneurs lead the process of economic development via bringing about sectoral change. You must
be aware that as the economies grow, percentage of GDP originating from agriculture decreases and that
originating in industry and services sectors goes up. 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 see from table on marginalised groups. That small-scale entrepreneurship enables
such marginalised groups 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 cottage industries can
really catapult local communities to socio- economic success stories. Local governments do their bit in
developing these entrepreneurship clusters with a view to encouraging inter-firm collaboration and
development of common facilities. entitled, ‗Entrepreneurship Clusters in India. In regard to the
development of entrepreneurship for impacting local communities, some corporate-sector initiatives also
deserve a mention. ITC through their ‗e- Chau pal and HLL through their ‗Shakti initiatives have sought
to mobilise native 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, there would not have been international trade and the
resultant economic growth. The established ways of life need to be challenged and change must be seen
as an opportunity to improve rather than 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
the courage to try them prepare a fertile ground for persistent economic development. Have you seen the
Hindi movie ‗Lagan, where the protagonist Bhuvan raises a cricket team from the villagers who 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 the entrepreneurs?

43
Thus, whether one looks at economic development narrowly in terms of the increase in GDP or in the
wider context of economic, institutional and social change, and entrepreneurship plays a crucial role.
Global Entrepreneurship Monitor studies report a lag of 1-2 years between entrepreneurial activity and
economic development, suggesting that it takes time for the impact of entrepreneurship on economic
development. An important observation needs be made here. While entrepreneurship leads to economic
development, the vice-versa is also true. That is, economic development also fosters entrepreneurship
development. Growing economies provide a fertile soil for the flourishing of entrepreneurship, an aspect
that we will take up while discussing entrepreneurship development.

44
Role of Entrepreneur in relation to their Enterprise:

Drawing an analogy from musicology in explaining the role of the entrepreneurs in relation to their
enterprise, one may say that an entrepreneur is not only the composer of the musical score and the
conductor of orchestra but also a one-man band. His roles and functions get much broader in scope in a
developing country context like ours. Entitled ‗Role and Functions of the Entrepreneur in Relation to
his/her enterprise. These elements are no sequential as the figure may convey, the entrepreneur may have
to address to all these elements simultaneously. 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 should resist the
temptation of looking at the business only from one‘s own narrow perspective. Having said this, it is apt
that we provide a brief description of the various issues that may be relevant at each stage.

Opportunity Scouting: Entrepreneurial opportunities have to be actively searched for. One may rely on
personal observation, discovery or invention. Personal/professional contacts/networks and experience or
may also help in identifying business opportunities. Alternatively, one may rely on published reports,
surveys and the like. Narayan Reddy of Virchow Laboratories relied on the personal discovery of the
molecule during his employment with a pharmaceutical company. As observation means
seeing/hearing/smelling with a purpose, opportunity spotting presupposes tendency to look at the things
and phenomenon from an entrepreneurial mindset. 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 have the same thing for ourselves. 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 the customers 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, sectorial/ industrial analysis. For example, post WTO, 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-ups from India. Global outsourcing is on the rise and
India offers a huge and varied pool of technical manpower that makes it a cost-effective destination for
in-bound global outsourcing in manufacturing as well as Information Technology Enabled Services
(ITES).

45
Identification of Specific Product Offering: While the environment scan leads to the discovery of more
generalized business opportunities, there is a need to zero in on to a specific product or service idea. For
example, trade liberalization since 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 import and
from your point of view export potential. Deciding on the product offering makes the highest demand on
the entrepreneur’s creativity and innovativeness. Yet, in a competitive environment, 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 necessitates decisions on who is buying, why, and what are
the value expectations. You will be able to succeed when the value delivered not only meets but also
exceeds customers 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. And this should be possible at a cost that
can be covered by the price it will fetch; 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 enough sales in the immediate and the
prospect of growth in the foreseeable 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 there aren‘t any
environmental and other legal restrictions/necessity of prior approvals for setting up the business. It is
also to be decided as to whether the business will be organized as a proprietary concern/partnership firm/
company or cooperative entity. Clearly the chosen product offering must be feasible from the diverse
perspectives. You must compile these findings in the form of a business plan that would have to be
submitted to the funding authorities, in the Indian context, the State Finance Corporation of your area.
They may be having a prescribed preform in which the details of the business plan are required to be
furnished and, as such there may a need to adapt the contents accordingly. An idea about the generic
contents of a business plan may be had from.

46
The business plan may be appraised by the funding institution and upon satisfying itself about the
desirability of assisting your project and upon the furnishing of some margin money it may sanction the
loan amount. Recall, Narayan Reddy and his two other associates provided Rs. 8 lakhs and the APSFC
contributed Rs. 20 lakhs toward the overall project cost of Rs. 28 lakhs. Upon the project approval, the
entrepreneur can proceed for project commissioning, that is putting up the factory premises, installing the
equipment, obtaining the supplies of the input materials with a view to starting the manufacture and
marketing the product. As noted earlier too, entrepreneurial functions do not come to an end with the
business start-up. He often looks after its day-to-day operations and strives for its stability and growth.
Entrepreneurial roles and functions clearly seem onerous. Perhaps that is 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
entrepreneurship and grooming yourselves for it. This takes us to the discussion of the process of
entrepreneurship development.

The process of Entrepreneurship Development:

Entrepreneurship does not emerge spontaneously. Rather it is the outcome of a dynamic process of
interaction between the person and the environment. Ultimately the choice of entrepreneurship as a
career lies with the individual, yet he must see it as a desirable as well as a feasible option. In this regard,
it becomes imperative to look at both the factors in the environment as well as the factors in the
individual as having a nearing on the perception of desirability and feasibility and thereby
entrepreneurship development. One may, therefore, model the process of entrepreneurship development
in terms. In general, capitalist economy with its emphasis on individual achievement is more suitable for
entrepreneurship. Lower rates of taxation on personal income, lower rates of interest and moderate
inflation stimulate entrepreneurial activity. (Can you think why it is so?) Moderately low external value
of domestic currency or in other words, moderately lower exchange rates, stimulate import substituting
and export promoting entrepreneurship. (Can you rationalize why?). Well-developed financial system,
good infrastructure, helpful bureaucracy all these have a favorable impact on entrepreneurship.

47
Specially designed and dedicated institutions such as National Institute 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- cultural milieu. Those
societies that respect individual freedom to choose among occupations, that encourage the spirit of
enquiry, exploration and experimentation, celebrate individual accomplishment and in general accord
important status to the entrepreneurs are likely to have self-sustaining supply of able and willing men and
women for taking to entrepreneurship as a career the role of the individual in

Entrepreneurship Development:

Mr. Narayan Reddy was desirous of starting a small-scale industry and also had a sense of efficacy 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 at suitable places). Even you
may like to see as to where do you find yourself on the desirability (willingness)-efficacy (ability) matrix,
won‘t you? As you may see from the matrix 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 Reddy leapt up the opportunity as he met the two medicos who had returned from
the Gulf. At any point of time, there are many men and women who ―want‖ to set up a business of their
own but experience self-perceived barriers to entrepreneurship. They could be having a low perception of
self- 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 as competencies, which now we turn our
attention to.

48
Entrepreneurial Competencies:

Every opportunity and successful performance of every role and function has a competence requirement.
It’s true of entrepreneurship as well. Entitled ‗Cash OR KASH? 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 mark his/her effectiveness for a task. The phrase
composite is crucial. For example, the competence ―ability to communicate vision‖ is much more than
proficiency in writing/ speaking skills. It would involve, just to illustrate, vision clarity, understanding
the audience background, interest and readiness, knowledge about the media and choosing the most
appropriate one, attracting attention, delivery, leaving not merely an impression but also an impact and,
assessing effectiveness. So, when the entrepreneur in the television interview pointed out KASH as the
determinants of successful entrepreneurship, he was indeed referring to the competencies. Competency
approach to human resource development in general and entrepreneurship development in particular was
pioneered by David McClelland, a Harvard University psychologist in the late 1960‘s and early 1970‘s.
(You will be learning more on McClelland ‘s work when we discuss entrepreneurial motivation.)
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. As a result, it becomes more important
to learn what a person does rather than who he/she is. That is why management and also entrepreneurship
is better defined as what a manager or an entrepreneur does. Because competencies can be built via a
process of education and development, we may say that entrepreneurs are made. What are the distinct
competencies for entrepreneurship? In this regard one may refer to the efforts of Entrepreneurship
Development Institute of India (EDI), a national resource institution in the area of entrepreneurship
education research and development EDI has identified a set of 15 competencies that contribute toward
entrepreneurial performance and success. These are briefly stated hereunder.

Initiative: Acting out of choice rather than compulsion, taking the lead rather than waiting for others to
start. Sees and Acts on Opportunities: A mindset where one is trained to look for business opportunities
from everyday experiences. Recall ‗oranges example.

49
Efficiency Orientation: Concern for conservation of time, money and effort. Systematic Planning:
Breaking up the complex whole into parts, close examination of the parts and inferring about the whole;
e.g. simultaneously.

Persistence: A never say die attitude, not giving up easily, striving continuously until success is
achieved. Information seeking: Knowing and knowing who knows, consulting experts, reading relevant
material and an overall openness to ideas and information.

Concern for High Quality of Work: Attention to details and observance of established standards and
norms. Commitment to Work Contract: Taking personal pains to complete 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 to successfully 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 to competitiveness 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, an organisation, etc.) can be developed by, for example by
reading and interacting with people who 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‖? For example, ‗persuasion ‘and use of influence strategies require presentation skills. You may
do double the homework on what you want to say, how you want to say, who your audience is and what
are their backgrounds, what could be the possible

50
Entrepreneurship for Preserving Personal Work Ethos:

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 cope with the
bureaucratic attitude in servicing the customers. It clashed with his personal value, ‗client’s problems be
attended first, questions that may be asked, what would be their answers and so on. Practice it all over 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 feel interested 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 business opportunity. In terms of Maslow’s need hierarchy theory, one
may say that Mr. Narayan Reddy was driven by the need for self-actualisation. Since entrepreneurial
situation is characterised by personal accomplishment in competitive situations and involving higher
standards of excellence, one often come across reference to ‗need for achievement or N-ach for short as
the primary driver of entrepreneurial behaviors. See Box entitled ‗How NAch. Drives Entrepreneurship
and Economic Development.

Need for Achievement (N-Ach.): Need for achievement implies a desire to accomplish something
difficult. To master, manipulate, or organise physical objects, human beings or ideas. To do this as
rapidly and as independently as possible. To overcome obstacles and attain a high standard. To excel
one‘s self. To rival and surpass others. To increase self–regard by successful exercise of talent. Yes,
entrepreneurship provides you with the best opportunity for making the best use of your talents as in
employment the 9-5 routine, pressure to adhere 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.

51
You can create a work environment that suits your abilities and interests. Need for Power (N-Pow): Need
for Power is the concern for influencing people or the behavior of others for moving in the chosen
direction and attaining the envisioned objectives. In common perception, politicians, social religious
leaders Chief Executive Officers (CEOs), Government Bureaucrats/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 organizational 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
the commitment of capital providers, suppliers of equipment and materials, the employees and that of the
customers. Power may not be used to further one’s self-.interests alone, it may be also be used to touch
the lives of others, to make a difference. Entrepreneurs driven by this socialised face 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 and expected to be, innovative,
trendsetters and tradition breakers. However, it is not necessary that affiliation 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 that whatever 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 to conform to the wishes and norms of those whom they value.
Apparently, social activists, environmentalists, teachers, and doctors and nurses may seem as
predominantly driven by these carries on the tradition of business in the family and the community to
which one belongs, may be interpreted as reflecting need for affiliation as well. In the countries with the
colonial past, such as ours, the first generation of entrepreneurs in Independent India was driven by
patriotic fervour and the desire to rebuild the economy left stagnated by the alien rulers. One can
certainly trace some elements of affiliation motivation in such instances.

Need for Autonomy (N-Aut.): The need for autonomy is a desire for independence and being responsible
and accountable to oneself rather than some external authority for performance. It is the desire for an
opportunity for the fullest expression of one’s abilities. In the context of entrepreneurship, it is usually
interpreted as the determination not to work for someone else. In most job situations, employees are
given little freedom to exercise their discretion in taking decisions and choosing a course of action so
much so that absence of it drives them into starting their own ventures.

52
As such n-pow. becomes more a desire for preserving one’s ethos rather than the freedom from the boss.
Take the example of another Hyderabad based entrepreneur entitled Entrepreneurship for Preserving
Personal Work Ethos). What does the above discussion mean for entrepreneurship development? It
means that for promoting entrepreneurship it is important to kindle and arouse the right motivation. In the
absence of motivation, even able men and women may not take to entrepreneurship. Hence. In every
Entrepreneurship Awareness Programme (EAP) or Entrepreneurship Development Programme (EDP),
there are special sessions on entrepreneurial motivation, besides sessions on entrepreneurial
competencies. You may note that 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 on their own may strive hard to acquire the necessary competencies to realise their
dreams. How truly one has said that entrepreneurs are the dreamers who do! In explaining and
developing entrepreneurial motivation, it is important to learn that different individuals are motivated
differently, and that one may be trying 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 the firm or that of
entrepreneurism profit maximization.

Entrepreneurial Values and Attitudes:

While explaining human behavior, one often comes across the term’s values and attitudes. Rather than
attempting to distinguish between these two terms, it would be sufficient to say here that taken together,
entrepreneurial values and attitudes refer to the behavioral choices individuals make for success in
entrepreneurship. The word choice is important, as there are alternative 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 or KASH labelled these as ‗Habits, some researches have called
these as policies or strategies. Be it the decision to make a choice about entrepreneurship as a career, be it
the decision to choose the product line, growth strategy, profit making and social responsibility you
would be required to make choices. The choice that you make may have a tremendous impact on your
performance. What we do here is to profile some of the dimensions relating to starting and managing a
business and the associated behavioural alternatives, we have considered here two to keep the things
simple. We have highlighted those alternatives that have been generally observed to be associated with
superior performance paperwork can wait.

53
He quit the job and started a turbine repairing and furbishing company. Incidentally, it takes more money
to travel or to transport than to repair or refurbish the turbine. But the downtime is reduced and the clients
are happy. Later the 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 to McClelland, the
Harvard professor whom we referred to also in the discussion of competency-based approach to human
resource and entrepreneurship development. He set out to investigate why some countries are more
developed than others He sought to find answer to this question by examining the proposition that
differences in the level of achievement motivation are responsible for ‗differences in the level of
economic development. For this he examined the popular stories and folklore and readers up to primary
classes of 39 countries for finding out whether they focused on personal accomplishment, triumph of
human courage and effort over the circumstances and so on.

The Role of Environment in Entrepreneurship Development:

Entrepreneurs bring about economic growth and development, and the latter in turn provides a fertile soil
for the flourishing of entrepreneurship. There certainly is a mutually facilitating reciprocity between
economic growth and entrepreneurship development.

54
 Process of Setting up a Business

Roles and Functions of the Entrepreneur in relation the Enterprise:

Developing Exchange Relationships:

1. Perceiving market opportunities

2. Gaining command over scarce resources

3. Purchasing inputs

4. Marketing of Products and responding to competition

Political Administration:

5. Dealing with public bureaucracy (approvals, concessions, taxes)

6. Managing human relations within the firm

7. Managing customer and supplier relations.

55
Management Control:

8. Managing finance

9. Managing production

Technology:

10. Acquiring and overseeing assembly of the factory

11. 1Industrial engineering (minimizing inputs with a given production process)

12. Upgrading the production process and product quality

13. Introducing new production techniques and products.

56
 CHAPTER 4
GENERAL ANALYSIS
PESTEL Analysis:

PESTEL Analysis is a business measurement tool to access the overall macro environment of business.
PESTEL is acronym for Political, Economical, Technological, Legal and Environmental. It part of the
external analysis while conducting market research and it gives an overview of multiple macro
environment factors before taking business decision.

Political Factors: Political factors are the medium by which Government intervenes the functioning of
an enterprise. Government regulations are evaluated in terms of its capacity to influence the business
environment and markets. The principle issues in this segment are political stability, tax guidelines, trade
regulations, safety regulations, labor laws, and business laws.

Startups India Action Plan Impact: The action plans suggest law enforcement agencies to keep off the
functioning of startups in the first three years of its operations. But after three years, companies need to
follow the regulations.
Example- Tax exemptions, Self-certifications for 3 years

Economic Factors: These factors include economic growth, interest rates, exchange rates, and inflation
rate. These factors extraordinarily affect how businesses operate and make decisions.
Startups India Action Plan Impact: There will be an improvement in the ease of doing business especially
for startups which will boost entrepreneurship. There is a corpus fund for startups at lesser interest rate
which will improve the ease of setting up news businesses.

Social Factors: These factors have a great impact on the buying patterns which is an important
determinant for businesses. High trends in social factors affect the demand for a products and operational
mode of enterprises.

57
Startups India Action Plan Impact: Startups action plan will change the buying pattern and behavior of
consumers as this action plan is more focused on products and services which will be driven through new
technologies and innovations.

Technological Factors: These factors include technological aspects like R&D activity, automation,
technology incentives and the rate of technological change. These can determine barriers to entry,
minimum efficient production level and influence the outsourcing decisions.

Startups India Action Plan Impact: Though there is not enough space for R&D activity in the startups
action plan. This action plan would be a key contributor to technological aspects like the rate of
technological changes i.e. technology beyond portal and mobile apps; etc.

Legal Factors: This factor includes consumer law, antitrust law, employment law, and health and safety
law. These factors can affect how company operates, cost structure, and market demand for its products.

Startups India Action Plan Impact: Exemption of startups from labor inspections for the first 3 years
from labor department etc. will definitely boost the business environment.

Environmental Factors: These include ecological and environmental aspects such as weather, climate
change, environmental law etc. which may affect industries such as tourism, farming, and insurance.

Startups India Action Plan Impact: There is no special mention about in the announcements. However,
the fund allotted through credit guarantee scheme will cover risk if any occurs.

Challenges and Opportunities of Start-ups:

Whatever may be the kind of start-up, Indian start-ups face its own set of challenges and some stellar
opportunities.

58
The challenges can be classified as:

Culture:
Entrepreneurship and start-ups are only a recent phenomenon in the country. It is only in the last decade
and half that people in the country have moved from being job seekers to job creators. Doing a start-up is
tough and every country sees more failures than success. More often than not an entrepreneur needs to be
prepared to face failures and unprecedented hardship. However, culturally we are not groomed to fail and
failure is frowned upon. Entrepreneurship thrives on celebrations and a society that fails to appreciate
business failures stifles innovation and creativity even before it can start. A start-up failing has to be OK
as failures often teach an entrepreneur, what to do and what not to do.

Mentoring:
Doing a start-up is perilous and often a lonely journey. You may have co- founders, but you may not
necessarily possess the business acumen to succeed. Having a brilliant idea is different from making that
idea a business success. For a start-up, it is very important to have mentors who have been through a
similar process of starting or have business experience. A great mentor is often what separates success
from failure by providing valuable inputs. However, there is no formal mechanism to mentor start-ups in
the country. Every mentoring that happens is on an ad-hoc basis. A start-up that has raised funds can
count the investors for some form of mentoring, but honest, unbiased, good business mentors are far and
few in between. For start-ups finding a good mentor is often an uphill task.

Policies:

Government is the single largest enabler for the entrepreneurial ecosystem. Government's role in ease of
doing business and helping companies start is vital to ensuring success. The latest World Bank Ease of
Doing Business (out of 189 economies) ranks India at an abysmal 142 where starting a business rank for
the country is even lower at 158.It is uncannily difficult to start a business in India and myriad laws and
regulations means it takes about 30 days to comply compared to just 9 days in OECD countries. The
government’s role has so far been limited to giving out grants and loans, but without an effective,
enabling environment, implementation is far off the target.

59
In this regard it will be interesting to see the contours of the recently announced Start-up Fund in this
year‘s budget. For start- ups to thrive and succeed, the government has a lot to do and understand the
importance of entrepreneurship in economic development

Hiring:

The economy has been in a flux and along with the world economy the heady days of high growth are
long gone. In an uncertain economy where, one is not sure about demand, for a start-up, it is particularly
difficult to make correct estimates on the number of employees needed. This, however, is the minor
problem where the biggest issue is about finding skilled manpower. India’s skilling need is so huge that
National Skill Development Corporation (NSDC) has been mandated to skill 150 million Indians by
2022. For a start-up, it is particularly difficult to attract and hire talent and skilled workers. A start-up
often cannot match the salaries drawn at larger companies nor is a job at a start- up seen as a steady one.
This means start-ups face severe hiring challenges and at times have to settle for the next best option.

Funding:

Capital and access to capital has been a perennial problem for start-ups. While, of late angel investors,
venture capital and private equity have brought succor to some extent, a large number of start-ups still
grapple to raise funds from institutional setup. Funding challenge is not merely limited to seed rounds,
but also for vital Series A and B rounds. For a start-up looking to scale, it is still very hard to raise rounds
to scale as the number of investors that write larger cheques in India are very limited in number.

60
The Opportunities are as follows:

Demographic dividend:
According to the latest UN report India with 356 million 10-24-year-olds have the largest concentration
of youth population despite having a smaller population than China. This augurs well for the country as
right education and healthcare can see the economy soar. Youth is the driving force behind innovation,
creation, and the future leaders of a country. Youth also drive demand and consumption pattern in a
country. For start-ups youth make up the workforce that it so desperately needs and going forward youth
can be a huge talent base for start-ups.
Best suited to address emerging countries challenges – India has a unique set of problems that need
innovations to originate out of the country Each problem provides a unique opportunity for start-ups to
solve some pressing issue and at the same time create a business around it. What helps is that most
problems around emerging economies are similar in nature and solutions applicable here can also work in
many countries in Africa and elsewhere. This enables Indian start-ups to acquire an even bigger scale and
at the same time make a meaningful impact around the world.

Large population:

For start-ups in the country, it is not essential to go overseas. India, with over a billion people, present a
very large home market for any goods or services. A rising disposable income and growing aspirations of
a mushrooming middle class have meant there is a large appetite for brands. The large population has
also led to a consumer expenditure growth, which has in turn has propped up supply and production.

High Mobile penetration:

According to latest TRAI figures India's tele-density reached 76.55 percent with a subscriber base of
95.76 crore. Significantly wireless subscriber base touched 95.76 crore, just shy of 100 crore mark. High
mobile penetration in urban and rura India has reshaped the economy of the country and how goods and
services are offered. It has led to greater efficiencies and increased productivity. It has meant businesses
profit through faster decision making, better logis t i cs and even something like access to bank accounts.
Existing frameworks can prove to be inadequate and there is a great need to leverage a billion minds and
become a global power.

61
Start-ups and entrepreneurship are the best way forward in becoming a knowledge superpower. Ashish
Mittal is founder and Chief mentor, Turning Ideas, focused on helping multiple start-ups in mobile, social
and cloud domain. He was instrumental in starting Google

Enterprise business in India and worked for Microsoft, Oracle and IBM. He is part of advisory board for
multiple higher education Institutes and Government and also guides students in becoming Industry
ready.

De-globalization:

Critics will argue that this will be a challenge, however, ever coin has two sides; it is a challenge for
some, and opportunity for the others. Brexit added fuel to the fire, while the new president of The USA
has given early indications of lower corporate taxes, and destination taxes for US based corporations.
Make in India, is also a part of this de globalized world, where we are promoting to make in India rather
than anywhere else in the world. This is an opportunity for the Indian start-ups, more importantly, lesser
brain drain, companies abroad will look to hire from India, and therefore greater talent pool will be
available for start-ups. India is a more closed economy as compared to China, and we do have substantial
exports to the US, but this will be unaffected, although de- globalization could have adverse-effect on
larger corporations who will scale down operations and become more frugal, this would also present
opportunities for start-up companies to fill the void.

Connectivity:

Indian telecom industry has nearly 100 crore subscribers, mobile connectivity has made inroads in the
rural and urban population. Government of India’s digital push is going to improve connectivity and data
to the next level. The race to cheapest data has started and disruption is certain. The cheap data has helps
everyone to get their hands on it, start-ups will have an easier time to tap into markets, territories and
even traditional businesses.

62
• Challenges faced by Women Entrepreneur:

Conflicts between Work and Domestic Commitment’s: Women's family obligations also bar them
from becoming successful entrepreneurs in both developed and developing nations. "Having primary
responsibility for children, home and older dependent family members, few women can devote all their
time and energies to their business" (Starcher, 1996). Married women entrepreneurs have to make fine
balance between the business and their home.

Problems access to finance: Women entrepreneurs are lacking access to finance because women
generally do not have property in their names to use them as a collateral security for obtaining funds from
external source. The bank also considers the women as less credit worthy and discourages the women
entrepreneurs. The family members of her have little confidence in the capability of the women to run the
business.

Lack of family support: This is common issue for every woman in India. Sometimes the family may
make the women feel guilty of neglecting household duties in her pursuit of business obligations.
Cultural traditions may hold back a woman from venturing into her own business.

63
Limited mobility: Unlike men, women modality for travelling from place to place in India is limited due
to the various reasons. Women on their own find it difficult to accommodate in smaller towns even the
dual responsibility that the women have to cope with making business success as well as looking after the
home restrict in their mobility

Male Dominated Society: Important barrier to the empowerment of women through enterprise is the
main chauvinist predominant social factor and believes are not conducive to the blossoming of women
entrepreneur. This consideration act as a stumbling block in their strife for equal status with men in the
economic activity.

Indian women give more emphasis to family ties and relationships: Married women have to make a
fine balance between business and family. The business success also depends on the support the family
members extended to women in the business process and management.
Role Conflict: Entrepreneurship needs a high level of commitment, devotion and dedication. Women
taking on mantle of entrepreneurship suffer from stress and strain caused by role overload and role
conflicts.

Lack of proper Education: The greatest barrier of the entrepreneurial career among women is the lack
of education. In India 60% of women are illiterate and illiteracy is the major problem of socio-economic
backwardness. Lack of information and experience creates further problems in setting up of business.

Discrimination in childhood: Right from early childhood, girl child is taught not to be aggressive. They
are discouraged to move out of the family and take up the business. This attitude of the family members
makes women week and passive in approach.

Low need for Success: Need for achievement independence autonomy are the prerequisites for the
success of the entrepreneurship. But women are proud to bask in the glory of their parents, husband,
children etc. Their preconceived notions about the role in the life inhibit achievement and independence.

64
Low Risk Bearing Ability: Women in India need a protected life and they are confined to the four walls
of house. They are less educated and economically not self-dependent and lack the entrepreneurial
initiative or training, inferiority complex, unplanned growth etc. all this reduces the ability of women to
bear a risk.

65
 CHAPTER 5
FINDINGS & SUGGESTIONS
5.1 Findings:

Any businesses start with a dream, but it takes more than just a dream for them to grow into
successful businesses—including the tenacity to overcome the many challenges facing start-ups
today. Start-ups take time, effort, and energy. Funding is a major concern for start-ups and small
businesses. When the economy tanked, it made it harder to convince investors and banks alike to
part with the cash that‘s essential for growth in the early days of a business. Credit today is tight,
and it‘s not clear precisely when it will become more readily available. Plus, there‘s a growing
trend of smaller initial investments in early stage start-ups. Intensifying the challenge of raising
funds, major leaps in technology have led investors to raise the bar in terms of how much
legwork entrepreneurs are expected to do before even pitching their companies.

5.2 Suggestions:

Solutions for reason of failures:

➢ Entrepreneurs should conduct in-depth market researches to understand the need of the society and
then proceed to the product design phase.
➢ Entrepreneurs need to analyse their business idea and think out of the box. An ideal example can be
the number of start-ups in the ecommerce industry, but rarely anyone focuses on logistics-based
start-up ideas, where the need is.
➢ Start-ups should aim to hire those people who share the same zeal to make the start-up successful.
➢ Entrepreneurs should reach out to multiple venture capitalists and know who is better aligned
towards the goals of start-ups.

66
➢ Business process should involve meetings of the management team and technical teams on weekly
basis to ensure a smooth workflow.
➢ Start-ups should be policy driven and offer same salaries to team members. It should offer
incentives for performance-based work. Doing so will help manage the funding in an appropriate
way.
➢ Entrepreneurs can enrol themselves at personality development classes. to improve their soft skills
or hire an experienced person for business communication.
➢ Entrepreneurs should keep a close watch on the growing demand for their product and focus on
response time and capacity planning.
➢ An entrepreneur should keep up with changing market dynamics to see a decline in the demand for
their product and take necessary steps to run the start-up profitably.

67
To remove the obstacles for Women Entrepreneur:

The basic requirement in development of women entrepreneurship is to make aware the women
regarding her existence, her unique identity and her contribution towards the economic growth and
development of country. The elimination of obstacles for women entrepreneurship requires a major
change in traditional attitudes and mindsets of people in society rather than being limited to only creation
of opportunities for women. Hence, it is imperative to design programmes that will address to attitudinal
changes, training, supportive services. The basic instinct of entrepreneurship should be tried to be reaped
into the minds of the women from their childhood. This could be achieved by carefully designing the
curriculum that will impart the basic knowledge along with its practical implication regarding
management (financial, legal etc.) of an enterprise. Adopting a structured skill training package can pave
the way for development of women entrepreneurship. Such programmes can train, motivate and assist the
upcoming women entrepreneurship in achieving their ultimate goals. Various schemes like the World
Bank sponsored programmes can be undertaken for such purposes. The course design should focus on
imparting input on profitability, marketability and practical management lessons. Besides, there should
be consideration in helping the women entrepreneurs in balancing their family life and work life. As a
special concern, computer illiterate women can be trained on Information Technology to take the
advantage of new technology and automation.

The initiatives taken from these well-established entrepreneurs for having interaction with such
upcoming women entrepreneurs can be proved to be beneficial in terms of boosting their morale and
confidence. The established and successful women entrepreneurs can act as advisors for the upcoming
women entrepreneurs. It may result in more active involvement of women entrepreneurs in their
enterprises. Infrastructure set up plays a vital role for any enterprise. Government can set some priorities
for women entrepreneurs for allocation of industrial plots, sheds and other amenities. However,
precautionary measures should be undertaken to avoid the misuse of such facility by the men in the
name of the women. Even in today’s era of modernization the women entrepreneurs depend on males of
their family for marketing activities. This is simply because they lack the skill and confidence for
undertaking such activities. Women development corporations should come forward to help the women
entrepreneurs in arranging frequent exhibitions and setting up marketing outlets to provide space for the
display of products or advertisement about services made by women.

68
 CONCLUSION

The entrepreneurial landscape in India is evolving, marked by a significant increase in startups and a
growing culture of risk-taking among entrepreneurs. However, several challenges persist, including
inadequate funding, lack of support networks, and a conservative societal mindset that often discourages
risk-taking.

Key Points:

1. A major hurdle for Indian startups is securing adequate funding. Venture capital, bootstrapping, and
angel investors are crucial, but their availability is limited compared to Western countries. Government
initiatives like 'Start-up India, Stand up India' aim to address these issues but more

2. Educational and Cultural Barriers: The education system in India often fails to equip students with
practical skills like marketing, sales, and leadership, which are vital for entrepreneurial success.
Additionally, a conservative lifestyle and the cultural preference for stable jobs over risky ventures
further impede the growth of startups

3. Support Ecosystems: The lack of robust support ecosystems such as incubators, accelerators, and
mentorship programs is another significant barrier. While these are slowly emerging in major cities, their
reach and impact are still limited, making it difficult for entrepreneurs to access the necessary resources
and guidance

4. Promotional Organizations and Initiatives: Various organizations and initiatives are working to support
women entrepreneurs and other underrepresented groups. Programs like Mahila Vikas Nidhi and Rastriya
Mahila Kosh provide targeted assistance, aiming to empower more individuals to pursue entrepreneurial
venture

69
Start-ups are the future growth engines of our country and government should do all it can to foster the
growth of entrepreneurship culture in India.

➢ Already Facebook, Google and Yahoo have acquired start-ups based in India and the likes of
Flipkart, Inmobi, MuSigma show us that world class companies can have origins in India also. It just
needs a little push in right direction.
➢ Government initiatives like the $1.68bn funds for the 00Make in India and the new company law
are a step-in right direction.

―The quicker you let go of old cheese, the sooner you will find new cheese‖
-Spencer Johnson

70
 BIBLIOGRAPHY
 https://vipulprakashan.com/product/business-planning-and-entrepreneurship-
management/

 https://economictimes.indiatimes.com/articles/articlelist/30990540 . cms?f ro m=mdr

 D‘souza, K., & Mittal, R. (2014). Issues, Challenges, and Opportunities of Indian
Startups. Journal of Emerging Technologies and
Innovative Research (JETIR).
https://www.jetir.org/papers/JETIR2110281.pdf

 Garg, A. (2020). Startups in India - Financial Challenges. International

Journal of Research
https://journals.pen2print.org/index.php/ijr/article/view/6418

 Indian Journal of Social Science and Economic Research (2023). Case Analysis
of Indian Startups and the Financial Trends. https://ijsser.org/2023files/ijsser_08
141.pdf

 Federal Reserve Bank of St. Louis. (2023). The Financial

Challenges of Startups
https://www.stlouisfed.org/publications/bridges/spring-2016/ the-financial-
challenges-of startups.

 "Addressing the key financial challenges start-ups face" - Inside

Small Business URL:
https://insidesmallbusiness.com.au/finance/addressing-the-key-financial-
challenges-start-ups-face
 "Common Financial Problems Start-Ups Face And How to Solve Them" -
StrategyDriven URL: https://www.strategydriven.com/2019/06/01/common-
financial-problems-start-ups-face-and-how-to- solve-them
 "Startups in India- Financial Challenges" - International Journal
of Research URL:
71
https://journals.pen2print.org/index.php/ijr/article/view/6418

72