UNIT 6 BECOMING AN ENTREPRENEUR

Structure

6.0 Objectives
6.1 Introduction
6.2 Entrepreneurship as a Person
6.3 Traits and Characteristics of Entrepreneurs
6.4 Delicate. Uniqueness of Entrepreneurs
6.5 Opportunities in Self-employment
6.6 Idea Generation
6.6.1 Selecting an Idea
6.6.2 Generation of Idea
6.6.3 Recalling Your Selected Ideas
6.7 Business Opportunities
6.8 Identifying My Business Choice - SWOT
6.9 Crucial Factors for Setting Up the Small Business
6.10 Preliminaries in Setting Up a Business or Trade
6.1 1 -
Product Specific Formalities
6.12 Business Blueprint
6.13 Let Us Sum Up
6.14 Answers to Check Your Progress
., 5 Key Words
1 Terminal Questions

6.0 OBJECTIVES

After going through this unit, you should be able to help your clients to:
collect information regarding various business opportunities in different trades;
identify various business opportunities;
finalize business trade; and
state and describe various trade formalities.

6.1 INTRODUCTION
An important feature of being entrepreneurial is that you endow with something of value
to others. The greater the requirement people have for yow products or services; the
superior will be the incentive. If you work to facilitate others people, to elevate their
standards of living and to augment theirs lives, you will be serving the needs of society.
In the previous unit you have seen the explanation given to the concept of
entrepreneurship, and how to develop entrepreneurial competency to start self-
employment activities. Once your clients are ready to become self-employed, the next job
is to decide what should be done. This is the connotation of being an entrepreneur. In this
unit, we shall discuss in detail the process of becoming an entrepreneur.
I brushing personal characteristics, financial means and resources inside your environment.
Every entrepreneur has matchless temperament, and it's the rationale of entrepreneur to
categorize some of this uniqueness. All entrepreneurs possess individual styles of owning
and running their busines'ses. On the other hand, there are numerous personal uniqueness
you may desire to expand which can facilitate your business to become successful. In this
unit we deal with those uniqueness, which assist entrepreneurs to be victorious. Most
> Leadership: Successful entrepreneurs are winning lsaders, whether they show An Entrepreneur
the way to little employees or a small amount of hundred employees. By the
exceptionally nature of their work, entrepreneurs are leaders because they must
hunt for opportunities; commence projects; gather the physical, financial and
human resources needed to carry out projects; set goals for themselves and
others; and express and guide others to accomplish goals. To be attentive of
improved ways to a accomplish takes is to be an effectual leader. You are likely
to be a successful leader if you trust in continuous growth, enhanced efficiency
and the continued success of your organization. There are two main areas of
leadership Behaviour (a) a goal setting, planning, a goal achievement, mission
orientation; and (b) a motivating, human relations, person-orientation.
> Risk-taking: Entrepreneurs be fond of obtaining realistic risks because they
would like to be successful, that is, they take great satisfaction in accomplishing
intricate but realistic takes by pertaining their own skills. Consequently, low-risk
situations and high-risk situations are evaded, as this source of fulfillment is
doubtful in either case. In short, the entrepreneur likes trickiness but achievable
challenge. As the size of your business expands, your problems and opportunities
become more abundant and multifaceted. Business enlargement and
improvement want that you are not frightened to make decisions and are willing
to presume certain risks. Most people are scared to take risks because they want
to be protected and keep away themselves from failure. On the other hand, all
phases of your work involve risk-taking, which is a fundamental part of being an
entrepreneur. You have to work under the strains and conditions of risk-taking
and should comprehend that the likelihood of failure is always in attendance.

> Decision-making: To subsist entrepreneurial, you must be creative,

particularly when it comes to decision-making. You should muscularly believe in
yourself and your aptitude to making good decisions. It is this decision-making
aptitude that is the distinctive market of an entrepreneur. It is you, who will
construct the decisions having the greatest impact on the future of your
organization. In many cases, the more significant the decision you have to make,
the less pertinent information will be accessible. Quantitative data are typically
accessible for making routine decisions; but these facts and numbers are liable to
be less vital when making top-level decisions affecting the organisation's future.

> Planning: Planning facilitates to ascertain company goals. As your company

grows, the superior need there is for planning; you're being to use more time in
planning and take away your precious moment in doing monotonous operating
activities. In the majonty of business there are two kinds of planning activities,
First, there are the entrepreneurial activities, including such tasks as making
contacts with bankers, accountants, lawyers, and others who facilitates with the
financial and legal aspects of your business. Obtaining marketing surveys,
conducting product research and designing budgets are all entrepreneurial aspects
of business planning. Second, there are those aspects of the business, which
may be painstaking and routine. These comprise organizing monthly financial
reports, monitoring and revising budgets, administrating the flow of production
and marketing products and services. Using time efficiently. Finally Time
management should be given more emphasis, as time is something that you
cannot put aside: You merely lose more and more of it, as the day move. By the
end of the day there is no left to utilize! All entrepreneurs require supervising
time efficiently, and the solution to using time in actual fact is all the way
through better management.
Entrepreneurshii~and
Small Business 6.5 OPPORTUNITIES IN SELF-EMPLOYMENT
We shall start with a discussion on how does one become an entrepreneur. To become a
self-employed individual, one must update one's knowledge regarding various
opportunities. The most important step is to find out what opportunities exist in various
trades. It is also important for you to know what kind of skill training could be imparted
to your clients.

The following is an illustrative list where economic opportunities and self-employment

possibilities exist. The list has been prepared to enable you to help your clients in
identifying opportunities across product categories. Please help the learners to find out
more about the various products that they may be interested in, The technical training of
all flrcso pradurts nreprovi~ledby blarious i ) i ~ l i t u l i o nIdke
~ Shratnlk Vidtyapetk, eft,

Repair and
Muintenanee of
Refrigerators and Air
co~lditioners
(Domestic)
rogramrna des~gning
Maintenancc of Computer Maintenance

Electrical appliances Maintenance of Car Air

conditioners

Maintenance of
Electrical Motors

Operation and
Maintenance of

Figure 6.2 : Illustration List of Opportunities in Self-employment.

Alternative Mode of Employment

Apart from the above-mentioned technology there are an alternative mode of

employment. This mode of employment will make a person a technical hand in their
respective areas and give them an edge to compete with their counterparts.
 Becoming An Entrepreneur

Figure 6.3 : Alternative Mode of Electrical Energy Mechanism

1 Repairs and maintenance: Repair and maintenance is an evergreen
employment as once these goods are purchased its annual maintenance contract
starts. To maintain repairs there types of goods both of enterprise and proper
training required. In this head we are considering some items but are not
confined. They are portable generator sels, Diesels generator, Industrial generator
for corporates & institutes, Computer hardware & Peripheral, Inverters
2 Building technology: the way real estate business are upcoming and growth in
the prices of the properties all over the country. The building technology seems
to be the bumlng issues as lot of brands had been created like DLF, Ansals,
Unitech, etc. The scope in building technology is in Masonry for men
construction Workers; Art of Plastering for women construction workers ;
Carpentry; Campus Gardening; Painting Plumbing and sanitary work.
3 Welding technology: In this head welding fabrication, gas welding and
industrial items. which required welding, are taken into consideration.
4 Agro based and allied technology: Agro based and allied technology products
are totally depends on agriculture economy and the functioning of this equipment
more involved in farming. These are Diesel Engines, Pump Sets; Portable Pump
sets; Tractors.
5 Textile technology: In the textile technology the Block Printing, Tie and Dye,
Fabric Painting, Batik Painting.
6 Printing technology: In The printing technology there are certain ingredients
which can take care of the entire printing such as: Screen Printing; Block
Printing; Book binding and file cover making; Desk Top Publishing; Lamination;
.Clock and Watch Repairing ; Digital watch repairing.
7 Home sciencelhouse hold industries/handicrafts: Bakery and Confectionery;
Food Preservation; Cookery; Dress Making, Designing and Embroidery; Fashion
Designing; Pattern Making and Mass Cutting (Garments); commercial Painting;
Dolls and soft toys making; Jute craft; Knitting (Crochet and U Pin); Gift
envelops and greeting card making; Artificial flowers making and Decoration;
Maintenance and Operation of sewing machines; Beauty Culture and Health
Care; Mehendi Application; Herbal Cosn~eticsPreparation; Chair caning;
Furniture Polishing; Bag Making.
Note: You rnay think of many otller arcas, if you scan your own environment carefully.
Entrepreneurship and Check Your Progress A
S~nslliBusiness

1 Fill in the blanks.

(a)In each of these unfilled needs, there is a possible business

(b) Invention in the laboratories may give rise to

(d) Ideas that appear to be crazy may prove to be a boon.

(e) An attractive glass container has a function for canying wine but is often used as

2 What do you mean by different types of technology list where economic

opportunities and self-employment possibilities exist.
......................................................................................................

3 Explain the difference between electrical technology and modem technology.

...................................................................................................

........................................................................................................
4 Explain the following statements by contributing the real life examples.
a) Combining two or more ideas. I
b) New ways of doing old things.

Briefly comment on the following:

a) Sense business opportunities is concerned with generating business ideas.
................................................................................................

...................................................................................................
. . .

b) ~dentifya business opportunity is scientific.

BecomingAn Entrepreneur
 - - - -
Entrepreneurship and
Small Business 6.6 IDEA GENERATION

6.6.1 Selecting an Idea

Creating yourself as a flourishing entrepreneur depends, in division, upon choosing a

excellent idea. .That idea must not merely be good for the market, but good for the
development and fine for the entrepreneurs. It should also be controllable by you without
much,dependence on others. Prominently, the idea should furnish staisfacting results to
you. As an entrepreneur, when you are penetrating for an idea worthy of your obligation,
don't follow one ldea at a time. Build up 5 or 10 in analogous in anticipation of one
emerges so suitable that it begins to rule your thoughts. To implement one idea at a time
has quite a few shortcomings. Foremost, because your are continuously receiving
haphazard information from what you understand and from people you communicate to,
having a number of back-burner ideas gives you a superior probability of finding
utilization for information you lift up. Secondly, if you are practicing a solitary idea by
inventing commitment before you feel it, you may put yourself into a rigid comer.
Selecting an idea is moderately complicated and the entrepreneur has to recall
independently his inherent competence in finalsing an idea. In the idea stage, suggestions
for new products are obtained from all people sources; customers, competitors, R & D,
distributors and company employees. Frequently, one of the creative problem-solving
techniques discussed below are used to develop marketable ideas. The recommended
ideas required to be cautiously screened to establish which are superior enough to--t
the criteria of a more detailed investigation. Established objectives and defined growth
areas make available a foundation for developing these criterions. After scanning the
environment, the next thing to think about is how to sense business opportunities. In
other words, it is concerned with generating business ideas.

6.6.2 Generation of Idea

The process of identifying a business opportunity is scientific and for this one has to'
generate lot of business ideas. Let us see how the ideas can be generated to sense a
business opportunity.
a) Solving people's problems: You will often fmd that people at large at any given
point in time have requirements which are not fulfilled by the existing products and
services. People may desire convenience, time saving, better products, a different
variety and so on. In each of these unfilled needs, there is a possible business
opportunity. It is generally said that problems give rise to opportunities. Therefore,
understanding and sensing problems of others can give many business ideas.
Listening to a housewife wishing for a water filter, which should be attached to the
faucet to give direct supply of filtered water, gives a business idea for a new type of
water filter. Listen carefully to peoples' problems about unmet needs, unfilled
requirements and you may hit upon a business opportunity.
b) Combining two or more ideas :Selling different items in one-shop presents the
'new' idea of a departmental store, which provides added convenience to consumers.
c) New ways of doing old things :Popularizing the gas lighter as a substitute for a
match box for lighting gas ovens gives the idea of a new product. Instead of selling
pizza in a bakery shop the sale through mob~levans at different locations is a 'new
idea' for a business.
d) Improving the product/service : Milk, which was usually supplied in bottles when
packed in sachet or tetra-packs, was seen as a 'new idea', as it gave new convenience
to both the buyer and the seller.
 e) Extending somebody else's successful idea to other settings : The successful Becoming An Entrepreneur
introduction of a new product service gives ideas for repeating to catch growing
markets in other places e.g. electric mosquito repellent in most of the developing
countries.
f ) Adding new value to an old product, finding new uses for an existing product :
Ball point pens used for writing with name of castomers printed on them become a
'new idea' for their use as publicity material and gift item
g) Doing market research : Determining demand-supply gaps through market research
I gives 'new idea' for products and services.
1 h) Use of 'Hobby' : A hobby of collecting flowers may give rise to a business idea of
'dried flower' art objects
i) Building up the skills : Skills very often give ideas of skill-based enterprises.
Typing skill can be used for starting a typing school. Skills of dress making and
embroidery could be applied to create a profitable business.
j) Turning waste materials into something useful :Availability of waste paper gives
the idea of an enterprise making paper products.
k) Bringing ideas home from holidays, visits : Difficulties faced in arranging
accommodation during holidays/visits may give rise to the idea of starting a travel
agency (for ticketing, etc.) providing these facilities.Brain storming :It is a popular
technique for generating new ideas. A group of persons sit together and generate as
many business ideas as possible. One idea leads to another. Ideas that appear to be
crazy may prove to be a future boon.
1) Talking and listening to people : By being a keen listener, one can find out what
people need or what new suggestions they have to offer for setting up new ventures
or improving existing products.
m) Day dreaming and fantasizing :Finding out possibilities "if things could happen
this way" may enable you to look for creative solutions. For example, an attractive
glass container has a function for carrying wine but is often used as decorative piece.
Thinking of product use with changes in size and shape Take the case of a plastic
paperweight. Reduction in size gives an idea of a dice; whereas an increase in size
may lead to the idea of a plastic stool for a drawing room.
n) Commercializing inventions : Inventions in the laboratories may give rise to ideas
for their commercialization.
o) Changing fashion and life style :Changes in fashion require new products and
services - short hair- styles for ladies or new haircuts for males leads to the need for
more parlours, as well as opportunity for some entrepreneurs to start a business of
serving people in their own homes.

6.6.3 Recalling Your Selected Ideas

A Robust with your skills and knowledge

Are the tasks of the enterprise the one you will benefit from doing yourself?
r Are your expecting a good return?
Do you believe in the product or service ?
Do you encompass skill in &is type of business ?
I' Do the basic success factors of this business accommodate your skills ?
I
Whether the need it fits denote impressive to you personally?
Whether you like and recognize the potential customers ?
,.
Entrepreneurship and B Robust with the market
Small Business
Does the product or service you recommend have clearly perceivable benefit
Is there a cost efficient mode to get the message and the product to the
customers ?
Is there a genuine customer requirement?
Whether customers trust in the product coming from your corporation?
Would you obtain a price that gives you good margins?
C Robust with the venture
Could you visualize who might fund it ?,
Does it appear cost-effective (high margin - low investment)?
Does it pursue the team work and fit in the enterprise culture ?
Is there a rationale to consider your enterprise could be very good at the
business?
Will it show the way to outsized markets and growth?

What will happen if your ideas will be redundant?: normally, as an entrepreneur, you
may come across that your idea is not up to the mark or rather has been rejected andlor is
not successful as predict. There are a few things you can accomplish:

Locate an important person to whom you convey your idea by considering

Pay attention carefully, comprehend what is wrong, recover your idea and your
presentation, and endeavor again.
Renounce and pick a new idea.

6.7 BUSINESS OPPORTUNITIES

A prospective entrepreneur is interested to engross himself in merely those business

processes, which are practicable and have a demand in the market. At the same time he
is required to decide on a particular alternative out of unlike options obtainable to him.
For instance, he has to decide on a meticulous business or industry then he is required to
appraise what will be the form of that particular product or service and possibilities. In
reality, an entrepreneur is termed as an opportunities hunter. He is supposed to
recognize, investigate and then decide on a feasible business opportunity. Business
opportunity is an eye-catching project in terms of sufficient rate of return, which
motivates the entrepreneur to acknowledge that particular project for making investment
decision. Entrepreneurs in general evaluate diverse possibilities and decide on just
highest reward paying opportunity for implementation. Thus a business prospect is being
competent of as commercially feasible. In this background, two major criterion are vital
for making a option s a business opportunity.
Favourable market demand or surplus of demand over obtainable supply on hand
in the market and
Ample rate of return on investment that is usually equal to normal rate of return
and risk premium attached to that particular business prospect.

A Objective of recognition of Business Opportunities

Appraise the likelihood of developing and utilizing physical resources.

Assess and guesstimate the capital, labour transport, power fuel, raw material for
feasible industries.
Categorize those industries, which are not based on local resources
 Learn the short and long run development possibilities of the province with
respect to agriculture.
l Review the collision of achievement in financial resources.
Study and scrutinize the SMEs potential.

B Factors that influence the Business Opportunities

Accessibility of industrial inventory: accessibility of inventory also determines
the business opportunities as it comes to a decision the level of future production.
l Chance of Export: Export potentiality is an imperative criterion for measuring
competence of a particular industry.
l Congregation information regarding the tentative developed industry: An
entrepreneur is probable to take a judgment about the incorporation of particular
industrial unit after forcefully the process of identifying business opportunities.
l Ease of use of Internal Resources: . Ease of use of valuable break and
sufficient rate of return stimulate entrepreneur to embark on entrepreneurial
activity but against with the condition that he has to have some seed capital of his
own.
l Form of External support: Recognition of business opportunity also involves
the marking of sources from which financial and other facilities are predictable to
come.
Height of risk in the business: There are dissimilar types of risk usually drawn
in in a particular business. These risks are technological risks, financial risks,
societal risks and ecological risks.
Level of inner Demand: An entrepreneur should endeavor to assess the
blueprint of inner demand of anticipated product or industry in which he is
planning to engross himself.
l Psychoanalysis of existing units performance: Objective analysis of
performance of accessible units is to be commenced to make certain success in
detection of business opportunities.

Having understood this, let us go through the following case study.

Azadnagar is a new compact township being designed and developed outside a

metropolitan city like New Delhi. In order to meet a varlety of daily requirements
and needs of the residents of the township two types of complexes have also been
created. They are the shopp~ngcomplex, and the manufacturing and repair-cum-
service complex. The shopping complex located in the main commercial zone has
small shops of different sizes available on hire-purchase system. Shops and sheds in
'
the other complex are also available on hire-purchase system.
A list of general, day-to-day needs of a community, for which small businesses could
be easily started, was also provided. Some of these needs were to be met through:
l Tailoring establishments

Laundry
Provision store
Enhrepreneurship and Similarly, small manufacturing-cum-repair requirements of the residents could be
Sma111Business
met through small units in the manufacturing and repair-cum-service complex.
Appropriate units could be started in this complex. Some of the needs to be provided

11 in this complex are as follows:

Nuts and bolts manufacturing

Repair-cum-servicing units
Automobile garage and petrol pump and
111 Packaging and transport services 111

IS Self Assessment Activity 3

Take a piece of chalk. List out the different usages of chalk other than writing on the
blackboard. Once you make the list, tick (4)the ones which you think will have
better busii~essopportunities.

& Self Assessment Activity 4 ,

Through the shopping and service complexes, therefore those who want to be
self-employed could select number of self-employment opportunities. Ask your
clients to list the opportunities they would like to choose for themselves? What are
their reasons for choosing the same?
......................................................................................................

6.8 IDENTIFYING MY BUSINESS CHOICE - SWOT

After you have exposed your clients to various opportunities in business the next crucial
step is to help them to identify their own business choice. Identification process is crucial
and has to be done step by step. The best way to identify the business choice is to go for a
SWOT analysis The SWOT analysis is a process through which any
project/product/processes is scanned on its Strengths (S), Weakness (W), Opportunities
(O), and Threats (T). The whole purpose is to list them to get clarity and making an
attempt to convert weakness into strength and threats into opportunity. This process is
applicable for any product or any market opportunity. Let us look at an example of pickle
making, which could be a lucrative opportunity for being self-employed. However,
before finalizing you need to look at different aspects of pickle business in the context of
its viability. Let us how a product match is done through SWOT analysis.
 Becoming An Entrepreneur

cumbersome

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4 Establishing brand , '

............................................................................... ... ... ... ... . .

........ ........... .....
................ . . .. .. .. ............................ . . .. .. .. .. ............

Figure 6.4 : SWOT Analysis

,
What can you see in the table? Can you help your clients to add few more points? How
can we decide whether we should go in for the "pickle business"? For this there is a need
i
to convert weaknesses into strengths and threats into opportunities. For example,

i seasonality of raw material which is seen as weakness can also be a strength as more than
one kind, of pickles could be made since the raw material is seasonal. Similarly the threat
1 "customer taste may change" could also give rise to do lot of value addition in the
existin8 product, according to the changing tastes and preferences and thus it becomes an
oppomnity. For this you may have to explore variety of information, analyzing skills and
look for channels of marketing. However, at the end of the SWOT analysis if you find
. .
that 80% of the weakness and the threats are under your control you should finalize your
decisiun.

6 Self Assessment Activity 5

As a potential self-employed entrepreneur what activity would you select : small

business or small manufacturing and repair-cum-servicing activity?

You are expected to describe your choice of the activity through a two state selection
process as follows:
 I
Entrepreneurship and i) Firstly, choice of a small business or a small manufacturing and repair-cum-
Small Business
service unit.
ii) Secondly, you are required to choose the specific opportunity or business in
either category.
Components of opportunity:
Demand and Market Component
Cost & Pricing Component
Locational component
Merchandise required and process component
Policy Incentive Component (Promotional Component)

Your Choice

Can you now state four reasons at each stage of your choice?
In selecting the specific opportunity you may use your own understanding of smal
business/small industry and self-employment.
- 1 .....................................................................................................
2 ........................................................................................................
3 .....................................................................................................
4. ....................................................................................................
Your clients as a selflemployed entrepreneurs must understand their own selectio~iof an
opportunity fully because it is going to be their career and they will earn their livelihood
from it.
1
6.9 CRUCIAL FACTORS FOR SETTING UP THE SMALL
BUSINESS

After your clients have understood the process of selecting an opportunity, the next step
is to understand the main factors which are very crucial for setting up the small business.
Let us go through the following exercise. The choice of the speczjk activity (small
business/small manufacturing or repair-cum-service unit) is likely to be influenced by
anyone or combination of the following factors. One of the factors could be

INVESTMENT

Figure 6.5 :.Crucial Factors for Setting Up the Small Business

 An Entrepreneur
a) Maximum possible investment of funds that they can make. What will this amount be
in your case?
Is funds required to initialize the business (Yes/No)

b) Location of the activity in center of the town or outskirts; in case of Azadnager it will
be Shopping Complex or manufacturing and repair-cum-serv~cecomplex. Implied in
either location are many aspects of your business.
Location becomes a specific advantage because it takes care of the following aspects:
i. Close to road,
ii. Market proximity,
iii. Availability of skilled labour,
iv. Other infiastructural advantages.
If location is more important for your client, try to evaluate how are the other rema~ning
aspects related to it? The aspects are: investment, demand and market, rent for sllop,
nature of product or business. Help your clients work out this relationship in the space
given along each question.

Is location the most important consideration for you? (Yes/No)

Similar to location you may like to examine one more aspect of your business, i.e. size of
the shop.
c) Size of the shop length, breadth, depth, height etc. that the business likely to occupy.
Hence, the kind and scale of activity, which can be, started i.e. how large or extensive
activity mean as against small in your case?

Is size per se important in your decision to choose an activity? (YesINo)

d) Ownership whether you want to start your activity based on private ownership or
partnership i.e, owned by you alone or partners. For example, you should be able to
answer for yourself the question why private ownership? or why partnership?

Is the form of organization important to you? (Yes/No)

e) Experience is the activity that you choose based on your own experience or partner's
experience? How have you finally selected the activity?

I Is experience facilitate in dealing business intricacies (Yes/No)

Self Assessment Activity 6

What combination of the above factors has influenced you? Make a small list of these
questions that you need to ask for a business situation before helping your client to zerc
in on to a business opportunity:
What is the type of need (basic necessity, currency, fashion, food, trend?
Is there enough room in the market for the volume intended?
Would you be able to produce cheaply enough for you to operate profitably ?
.............................................................................................
 - -

Entrepreneurship and
SmaU Business IN SETTING
6.10 PRELIMINAF~~ES UP A BUSINESS OR
TRADE

For any enterprise - industry, service or business - there are a few formalities, legal or
otherwise, that need to be completed for starting and running an enterprise. In case of
industrial enterprise a variety of licenses, approvals and clearances may be required under
law. However, these would depend upon the nature of business or product being
manufactured. Some of these are maxidatory while others are optional. For example, your A

clients have to get registered with Income-Tax Department. In case they are dealing with
a product as an industrial or business enterprise Sales Tax registration is essential. For
polluting industries, clearance from the Pollution Control Board is mandatory. There are
certain steps involved in setting up a business or trade.
Familiar with your market: "Read everything you can about your market and
business in general," Use the links underneath to furnish yourself with the necessary
skills, education and experience. You must be knowledgeable about ycur sector to
persuade people to put faith in you.
Devoted to your market: "It's hard to be mixed up in a business you don't love,".It
takes passion, conviction and personal involvement to succeed. Never distrust
yourself - think about and go for it."
Chat about your ideas with people you trust: Pool knowledge and spring back around
ideas. Be penminded and serious.
Don't be frightened to spend money developing and researching your idea: If you
imagine it's significance it, it will entail financial faith. And if you don't invest, why
should you look forward to anyone else to?
Networking is vital, and great for free advice and support: You can meet other start-
ups, iilvestors and a whole host of useful contacts.
Numerous people have a good idea but are too terrified to do anything about it: Get on
with it. "If a business doesn't work, it doesn't matter. walk off and do something else,"
You may like to explain the need to seek necessary license, approval, clearance or
registration for aspects like brand name, copyright, trademark, patents, quality
branding, partnership firm etc. These are optional.

6.11 PRODUCT - SPECIFIC FORMALITIES

Some clearanceslregistration shall be product specifr : ;I ?-equiredto be obtained from

different departments as indicated in the following i ,-A.

Item Department
Pharmaceuticals 01; ~cstate
drug control

Central Excise Department

1
I
I
like potasium chlorate, fire crackers, etc.
Inflammable goods like petrol, kerosene,
Benzene, etc. I
Inspector of explosives
1
Bakery items, confectionery, ice Local authoritylhealth depts.
candies, etc.
Trading and Service Enterprises: For trading and service t7tl!erprises,registration is Becoming An Entrepreneur 1
required under the Shop & Establishment Act. Such legal formalities have to be
compiled with the concerned authority, which can be central, state or local bodies. You
will read in detail about these in Unit 9 of this course.

6.12 BUSINESS BLUEPRINT

The business sketch can provide an entrepreneur about the glimpse or rather a tentative
business draft to proceed and endow with a suggested outline of the material that should
be included in your business sketch. The final sketch may vary according to your needs
or because of the individual requil-cments. Each business can endorse from the
preparation of a watchfully written plan. The rationale for writing thk business sketch is
that it is the blueprint of your business and will endow with you with the tools for
analysis and transform. Finally business plan is a prerequisite if you are planning to seek
a loan. It will provide potential lenders with detailed information on all aspects of your
company's past and current operations and make available future projections.

Business Plan Outline

I I ~ o v e sheet:
r ~ k l page
e I 11. statement of purpose I 111. Details of the
I I I business
Company Name
Company address
company phone
1 What your company is
(also who what where
and when).
1 Legal
Description of the
business
number (include area What your objectives Products or services
code) are. Site & Location
Logo (if you have one) If you need a loan why Management
Names titles addresses you need it. (Promoters and
phone numbers How much you need. Founder).
(include area code) of Why you will be Personnel
owners successful. Methods of Book-
Month and year your How and when you keeping
plan was issued plan to repay your loan. Insurance
Name of preparer = Security

r IV. Marketing

Target market
V. Financial documents

Summary of financial
VI. Supporting

Competition needs Personal resumes

Methods of distribution Sources and uses of Personal financial
Advertising funds statement statement
Pricing Cash flow statement Credit reports
Product design (budget) Copies of leases
Timing of market entry Three-year income Letters of reference
Location projection Contracts
Break-even analysis Legal documents
Balance sheet Miscellaneous
Income (P & L) documents
statement
Business financial
history
Entrepreneurship and Strategy to accumulate the business blue print: When you are ended: Your business
SmaU Business
blueprint should appear professional, but the lender needs to be familiar with that you did
it. A business blueprint will be the most excellent indicator he or she has to judge your I

potential for success. It should be no more than 35 to 50 pages long. It should bring only I
the supporting documents that will be of instantaneous interest to your potential lender. I

~ e theeothers
~ in your own copy where they will be obtainable on short notice. Have
copies of your blueprint Make copies for yourself and each lender you wish to approach.
Do not give out too many copies at once, and keep track of each copy. If your loan is
refused, be sure to repossess your business blueprint.
i
Check Your Progress B

1 What do you mean by product specific formalities

2 What is a difference between private ownership and partnership. 1

a) For any enterprises there are few formalities that need to be completed for an

b) It is important that every opportunity has to be evaluated

through
C) is the most important considerations for the
infrastructural advantage
d) Entrepreneurs must understand their own of an opportunity
el is the activity that you choose on your own experience

4 Briefly comment on the following:

a) SWOT Analysis is a best way to identify a business
................................................................................................

b) There is a need to convert weakness into strength and threats into opportunities
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c) Specific activity is likely to be influenced by maximum possible investment
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Entrepreneurship and
Small Business 6.15 KEY WORDS

Business - Business refer to the state of being busy. In general term it is a commercial
activity for livelihood or generating profit.
Entrepreneurial - means burning personal characteristics.
Idea- is an explicit thought or perception that arises in the mind of a person as a
consequence of thinking.
Opportunity-a likelihood due to a complimentary combination of circumstances;
Planning - Planning facilitates to ascertain company goals
SWOT -Strengths, Weaknesses, Opportunities and Threats
USP -Unique Selling Proposition: a strong and distinguishing attribute

6.16 TERMINAL QUESTIONS

1. "Entrepreneurial qualities arein-born and cannot be acquired." Analyse this
statement and explain the characteristics of entrepreneur leadership. ,

2. "An entrepreneur is a person who functions as an innovator, manager and

coordinator" Discuss.
3. "Entrepreneurs are dreamers as well as risk bearers". Comment.
4. What are the qualities of a successful entrepreneur ? Suggest a suitable ideal form
for selecting entrepreneurs for a developing economy..
5 . "Developing economies need imitative rather than innovative entrepreneurs.
Comment.
6. "The entrepreneur is the economic agent which lifts the economic resources of an
area of lower productivity to the area of higher productivity and grater yield".
7. "The entrepreneur is a catalyst of development, with him we proper, without him we
are poor",. Explain with examples.
8. "A technical entrepreneur may be compared to a craftsman who develops improved
quality of goods because of his craftsmanship". How far is this statement correct?
9. Give a broad classification of Entrepreneurs. How are the 'Agricultural
Entrepreneurs' different from" Industrial Entrepreneurs"
10. Define entrepreneurship and elucidate the characteristics of entrepreneurial leaders.
1 1. Entrepreneurship is nothing but a conversion of dreams into viable action." Examine
this statement.
12. "Entrepreneurship is nothing but a combined effect of innovation and its effective
management." DO you agree with this statement ? Explain.
13. "Entrepreneurship is neither a science not an art. It is a practice based on
knowledge".
14. "Entrepreneurship is the process of initiating a new venture, organizing the resources
-that it requires and assuming the risk and uncertainty that it entails", Examine this
statement.
15. What are the objectives of identifying business oppo&nities ? Discuss the factors
affecting the identification of business opportunities.
16. What is business opportunity ? How are business opportunities identified ?
17. ar dent if is ti on of business opportunities is the first essential condition for the
entrepreneurship".
Note : These questions/exercises will help you to understand the unit better. Try to
write answers for them. But do not submit your answers to the university for
assessment. These are for your practice only.