ENTREPRENEURSHIP — UNIT 1 TO UNIT 4 NOTES

UNIT 1: ENTREPRENEURSHIP — CONCEPT AND FUNCTIONS

1. Meaning of Entrepreneurship

Entrepreneurship is the process of identifying opportunities, organising resources, taking risks, and
creating value through a business or enterprise. It is not just starting a business; it is about innovation,
decision-making, and transforming ideas into useful goods or services.

Key features

● opportunity-based

● innovation-driven

● risk-bearing

● result-oriented

● value-creating

2. Entrepreneur, Entrepreneurship and Enterprise

These three terms are connected but different.

Entrepreneur

The person who starts and runs a business, takes risk, and innovates.

Entrepreneurship

The process of creating and managing an enterprise. It includes idea generation, planning, financing, and
organising.

Enterprise

The outcome of entrepreneurship. It is the business organisation that produces goods and services,
creates jobs, and contributes to development.
3. Meaning of Entrepreneur

An entrepreneur is a person who:

● sets up an enterprise,

● takes calculated risks,

● works under uncertainty,

● innovates,

● organises resources,

● and looks for high achievement.

Important qualities

● innovation

● independence

● persistence

● competitiveness

● leadership

● responsibility

● future orientation

Thinker-based views

● Cantillon: risk bearer

● Adam Smith: organiser for commercial purpose

● Schumpeter: innovator
 ● Drucker: opportunity seeker and change exploiter

4. Functions of an Entrepreneur

The file classifies functions into four major groups.

A. Entrepreneurial Functions

1. Innovation

Introducing new products, new methods of production, new markets, or new sources of raw materials.
This is the most basic entrepreneurial function.

2. Risk-taking

Accepting uncertainty and possible loss in business decisions, investment, and expansion.

3. Organisation building

Bringing together land, labour, capital, machinery, and other resources and making major business
decisions.

B. Promotional Functions

1. Discovery of an idea

Spotting a business opportunity or unmet need.

2. Detailed investigation

Checking demand, labour, power, raw materials, finance, and market feasibility.

3. Assembling requirements

Arranging land, machinery, site, suppliers, partners, and patents if required.

4. Financing the proposition

Estimating fund requirements and arranging capital through shares, loans, debentures, or other sources.

C. Managerial Functions
1. Planning

Deciding what to do, when to do it, how to do it, and who will do it.

2. Organising

Arranging resources and activities in an orderly way.

3. Staffing

Recruitment, selection, placement, promotion, transfer, appraisal, and remuneration.

4. Directing

Guiding employees so that planned work is carried out properly.

5. Leadership

Influencing and guiding people to achieve goals effectively.

6. Communication

Exchange of ideas, feelings, information, and instructions. The file says entrepreneurs spend most of their
working time communicating.

7. Motivation

Creating interest and willingness in workers to perform well.

8. Supervision

Watching over work to ensure proper performance and correct use of resources.

9. Co-ordination

Making sure all departments and activities work together toward common goals.

10. Controlling

Setting standards, measuring actual performance, comparing results, and taking corrective action.

D. Commercial Functions

1. Production

Creation of goods and services.

2. Finance
Arranging and managing money for setup, operation, and expansion.

3. Marketing

Movement of goods and services from producer to consumer with focus on satisfaction of wants.

4. Personnel

Managing employees, their welfare, compensation, and working conditions.

5. Accounting

Systematic recording of business transactions and financial position.

5. Need for Entrepreneurship

Entrepreneurship is needed mainly for economic development. In a mixed economy like India, both
private entrepreneurs and government support are important.

Importance

● lifeline of a nation

● provides innovation

● promotes inclusive growth

● increases profits

● creates employment

● gives social benefits

6. Myths of Entrepreneurship

The file mentions common myths:

● starting a business is easy

● it needs a lot of money

 ● start-ups cannot be financed with debt

● banks do not lend to start-ups

● entrepreneurs only choose attractive industries

● success depends only on talent

● most businesses are financially highly successful

7. Advantages of Entrepreneurship

● excitement and adventure

● originality

● independence

● better earning potential

● freedom to choose ideas and work style

8. Disadvantages of Entrepreneurship

● no fixed salary

● fewer benefits initially

● unpredictable work schedule

● heavy responsibility

● handling inexperienced staff

9. Process of Entrepreneurship

The file gives eight steps.

1. Self-discovery — know strengths, weaknesses, interests

2. Identifying opportunities — spot unmet needs and problems

3. Generating and evaluating ideas — choose the best idea

4. Planning — research and prepare business plan

5. Raising start-up capital — arrange funds

6. Start-up — launch the venture

7. Growth — expand and adapt

8. Harvest — sell the business or move to a new venture

UNIT 2: AN ENTREPRENEUR

1. Types of Entrepreneurs

A. According to Danhof

Innovative entrepreneur

Introduces new products, methods, markets, or services.

Imitative entrepreneur

Copies or adapts existing innovations.

Fabian entrepreneur

Cautious, shy, and slow to change.

Drone entrepreneur

Resists change and continues old methods even at a loss.

B. Based on business type

● Business entrepreneur

● Trading entrepreneur

● Industrial entrepreneur

● Corporate entrepreneur

● Agricultural entrepreneur

C. Based on technology

● Technical entrepreneur

● Non-technical entrepreneur

● Professional entrepreneur

D. Based on motivation

● Spontaneous entrepreneur

● Induced entrepreneur

● Motivated entrepreneur

E. Based on generation

● First generation

● Second generation
 ● Third generation entrepreneur

2. Competencies of an Entrepreneur

A competency is a set of behaviours that helps identify, evaluate, and develop ability.

Main competencies

● initiative

● creativity and innovation

● risk-taking and risk management

● problem-solving

● leadership

● persistence

● quality performance

● information seeking

● systematic planning

● persuasion and influencing others

Launching competencies

● identifying opportunities

● arranging resources

● starting the venture properly

Management competencies
 ● production

● marketing

● finance

● sustaining enterprise operations

3. Ethical Entrepreneurship

Ethical entrepreneurship means achieving business goals through ethical means.

Why ethics matters

● builds trust

● ensures long-term success

● protects consumers and workers

● avoids legal and social damage

● improves business reputation

Ethical standards mentioned in the file

● provide quality and correct quantity

● respect environmental concerns

● pay fair wages

● do not use child labour

● use natural resources carefully

4. Entrepreneurial Values
The file gives four core entrepreneurial values.

1. Innovation and creativity

2. Independence / self-reliance

3. Respect for work

4. Quest for outstanding performance

5. Attitudes of an Entrepreneur

Attitude is a psychological tendency that shapes behaviour. It is learned, invisible, and affects action.

Features of attitude

● affects behaviour

● invisible

● acquired over time

● pervasive across life situations

Sources of attitude

● direct personal experience

● group associations

● influential others

Essential entrepreneurial attitudes

● passion for business

● trustworthiness
 ● flexibility with core values

● no fear of failure

● timely decisions

● self-care

● ego control

● self-belief

● accept criticism gracefully

● strong work ethic

● bounce back from setbacks

● step out of comfort zone when needed

6. Motivation

Entrepreneurial motivation is the internal drive that makes an entrepreneur work hard for goals. It affects
direction, intensity, and persistence.

Process of motivation

Need → tension → drive → action → goal fulfilment → tension reduction.

Maslow’s Hierarchy of Needs

1. Physiological needs

2. Safety needs

3. Social needs

4. Esteem needs

5. Self-actualization needs

McClelland’s Theory of Needs

 1. Need for achievement

2. Need for affiliation

3. Need for power

7. Entrepreneur vs Employee

Basis Entrepreneur Employee

Motive Starts a venture Works in an enterprise

Status Owner Worker

Risk Bears risk Limited risk

Reward Profit, uncertain Salary, fixed

Innovation Creates and changes Executes plans

Qualifications Broad entrepreneurial traits Job-specific qualifications

8. Intrapreneurship

An intrapreneur is an “inside entrepreneur” who works within a large organisation and uses
entrepreneurial skills without bearing ownership risk.

Importance
 ● retains talented staff

● encourages innovation

● prevents employees from leaving to start their own ventures

● benefits both employee and organisation

Example from the file

Google’s “Innovation Time Off” gave employees time to work on projects that could benefit the company
and its customers, leading to products like Gmail and Google News.

UNIT 3: ENTREPRENEURIAL JOURNEY

1. Concept

The entrepreneurial journey is the complete path from idea generation to feasibility, planning, launch,
growth, and expansion or exit.

2. Personality Types of Entrepreneurs

The file gives seven types.

Trailblazers

Competitive, ambitious, goal-oriented, independent, decisive, and calculated risk-takers.

Go-getters

Driven, sociable, independent, and good at both people and processes.

Managers

Analytical, process-oriented, independent, and focused on systems and outcomes.

Motivators

People-oriented, persuasive, and good at building relationships.

Authoritarians
Rule-based, detail-oriented, cautious, and logical.

Collaborators

Sociable, friendly, and effective in customer-oriented environments.

Diplomats

Adaptive, energetic, deadline-driven, and good at multitasking.

3. Business Ideas

The file explains common misconceptions and the real way ideas emerge.

Misconceptions

● great ideas appear suddenly

● all ideas are logical

● customers alone can give all answers

● a meeting can generate all ideas

● implementation is the only problem

Reality

Good ideas usually come from:

● systematic observation

● research

● creativity

● continuous thinking

4. Ways to Generate Ideas

1. Environment scanning

Studying newspapers, magazines, trade reports, consumer material, ads, and trends.

2. Creativity and creative problem solving

Using unique approaches such as attribute listing and free association.

3. Brainstorming

A group discussion that generates many ideas.

4. Focus groups

Small groups provide feedback on proposed products or services.

5. Market research

Studying market demand, supply, and customer behaviour.

6. Intuition

A “gut feeling” based on experience and subconscious knowledge.

5. Importance of Evaluating Ideas

The file gives four main reasons.

● decide what is important

● identify strengths and weaknesses

● use limited resources wisely

● reduce risk and improve returns

6. Feasibility Study

A feasibility study checks whether an idea is practical and workable before the business plan is prepared.

Types
 ● market feasibility

● technical feasibility

● financial feasibility

● organisational feasibility

Features

● checks whether the idea will work

● studies advantages and disadvantages

● helps build the business plan

● supports funding decisions

7. Business Plan

A business plan is a written summary of how a business will organise its resources and reach its goals.

Purpose

● gives a blueprint

● helps in funding

● guides organisation and direction

● helps measure progress

● communicates with investors and lenders

Elements

1. Introduction
 2. Business venture

3. Organised plan

4. Production plan

5. HR plan

6. Marketing plan

7. Financial plan

8. Appendix / miscellaneous

8. Business Plan Execution

The file says business plans often fail not because of a wrong strategy, but because of poor execution.

Why plans fail

● weak execution

● poor communication

● wrong people in wrong jobs

● lack of alignment

● lack of review and correction

9. Role of Family and Society

Family and society influence the decision to become an entrepreneur.

Family role

● gives emotional and financial support

 ● shapes career thinking

● affects willingness to take risk

Society role

● affects respect for business

● influences acceptance of failure

● can encourage or discourage entrepreneurship

10. Women Entrepreneurship

Women entrepreneurs face many barriers, especially in Indian society.

Main problems

● patriarchal society

● lack of opportunities

● lack of education

● social barriers

● bias from creditors

● limited access to organised sector

Positive trend

Women entrepreneurship is growing and becoming more visible in India.

UNIT 4: ENTREPRENEURSHIP AS INNOVATION AND PROBLEM SOLVING

1. Core Idea

Entrepreneurs are problem solvers. They identify problems, create solutions, and generate value. The
more problems they solve, the more value and profit they create.

2. The Japanese Fish Story

The story shows how entrepreneurs solve problems through innovation.

Problem-solution flow

● fish needed to stay fresh → bigger boats

● fish lost freshness → freezers

● fish tasted frozen → fish tanks

● fish became dull in tanks → shark added

Lesson

A challenge keeps the system active. Entrepreneurs need problems and pressure to innovate and
improve.

3. Entrepreneurs as Problem Solvers

Entrepreneurial actions are efforts to solve problems for customers and society. When an entrepreneur
solves a problem, new value is created.

Examples from the file

● KFC: solved the food need of hungry travellers

● Kellogg’s Cornflakes: accidental innovation created a new industry

4. Innovation in Entrepreneurship
Creativity is the ability to think of new ideas. Innovation is the ability to make those ideas work in practice.
Entrepreneurs are known for both.

Importance

● helps in new product creation

● creates new markets

● improves existing products

● changes industries

● produces value from ideas

Innovations mentioned in the file

● penicillin

● potato chips

● pacemaker

● microwave oven

● ink-jet printer

● X-rays

5. Social Entrepreneurship

Social entrepreneurship combines a social mission with business-like discipline, innovation, and
determination.

Social entrepreneur

A social entrepreneur aims for large-scale social benefit, especially for disadvantaged people. Profit is a
means, not the final goal.

Example: Grameen Bank

Muhammad Yunus used microcredit to help poor women start businesses and move out of poverty. This
became a sustainable model of social change.

Characteristics of social entrepreneurs

● social catalysts

● socially aware

● opportunity-seeking

● innovative

● resourceful

● accountable

Indian examples

● Vinoba Bhave

● Ela Bhatt

● Verghese Kurien

● Bunker Roy

● Nand Kishore Chaudhary

● Harish Hande

6. Case Studies: SEWA and Lijjat Papad

These examples show how entrepreneurship can improve lives and empower communities.

SEWA

Organised poor self-employed women and helped them with:

 ● employment

● credit

● childcare

● healthcare

● collective strength

Lijjat Papad

Started with a tiny amount of money and grew into a large cooperative built on:

● quality

● simplicity

● equal profit sharing

● discipline

● social impact

7. Concept of Risk

Business risk means the possibility of an unfavourable occurrence or loss.

Types of risk

Insurable risk

Can be covered by insurance, such as fire or theft.

Non-insurable risk

Cannot be insured or predicted accurately, such as price fluctuations or sudden demand changes.

8. Internal and External Risks

A. Internal Risks

These arise from within the business. They can often be controlled to some extent.

Types

● Human factors: strikes, negligence, dishonesty, incompetence

● Technological factors: outdated methods, technological obsolescence

● Physical factors: fire, theft, machine failure, transit damage

B. External Risks

These arise from outside the business and are mostly beyond control.

Types

● Economic factors: demand changes, price fluctuations, competition, inflation

● Natural factors: earthquake, flood, cyclone, famine

● Political factors: war, government change, policy change, riots

● Change in tastes and preferences of consumers

9. Role of Technology in New Forms of Business

Technology has changed the way business is done.

1. Information collection

Collecting customer data like age, buying habits, and preferences helps businesses serve better.

2. Business intelligence

Using data to improve decisions, performance, and strategic planning.

3. Smart mobility

Mobile devices like smartphones support business growth and access anywhere.
4. Cloud computing

Stores data online so it can be accessed remotely. This lowers cost and increases flexibility.

5. Social media

Helps businesses communicate, advertise, listen to customers, and create new business models.

10. Barriers to Entrepreneurship

A. Environmental barriers

1. Economic

Lack of capital, materials, labour, or market access.

2. Social

Social attitudes, caste, mobility issues, and traditional thinking.

3. Cultural

Values and beliefs that do not support risk-taking or creativity.

4. Political

Policy instability, poor legal support, or political unrest.

B. Personal barriers

1. Motivational

Lack of drive or loss of enthusiasm.

2. Perceptual

Wrong thinking, bias, or inability to see opportunities clearly.

11. Business Incubation

Business incubators are organisations that support start-ups with:

● physical space
 ● capital

● coaching

● services

● networking

How incubators help

● connect startups with angel investors

● help with venture capital presentations

● assist in loan applications

● support access to government grants

12. Government Support and Institutions

The file lists many support systems for entrepreneurship.

Schemes

● MSME schemes

● SIDBI microfinance and loan support

● NSIC schemes

● tax holiday scheme

● composite loan scheme

● industrial estate scheme

● factoring services

● cluster development programme

 ● national equity fund scheme

Institutions

● NIESBUD

● NIMSME

● NSIC

● EDII

● REDI

● SISI

● SIDO

● NAYE

QUICK ONE-LINE REVISION

● Entrepreneur = person

● Entrepreneurship = process

● Enterprise = outcome

● Innovation = basic function

● Risk = uncertainty/loss possibility

● Social entrepreneurship = business for social good

● Intrapreneurship = entrepreneurship inside an organisation

● Feasibility study = checks if idea is workable

● Business plan = written roadmap

 ● Incubator = support system for start-ups

INTEGRATED MIND MAP

ENTREPRENEURSHIP

├── UNIT 1: CONCEPT & FUNCTIONS

│ ├── Meaning

│ ├── Entrepreneur / Entrepreneurship / Enterprise

│ ├── Functions

│ │ ├── Entrepreneurial

│ │ ├── Promotional

│ │ ├── Managerial

│ │ └── Commercial

│ ├── Need for Entrepreneurship

│ ├── Myths, Advantages, Disadvantages

│ └── Process of Entrepreneurship

├── UNIT 2: AN ENTREPRENEUR

│ ├── Types of Entrepreneurs

│ ├── Competencies

│ ├── Ethical Entrepreneurship

│ ├── Values

│ ├── Attitudes

│ ├── Motivation
│ ├── Entrepreneur vs Employee

│ └── Intrapreneurship

├── UNIT 3: ENTREPRENEURIAL JOURNEY

│ ├── Personality Types

│ ├── Business Ideas

│ ├── Idea Generation

│ ├── Idea Evaluation

│ ├── Feasibility Study

│ ├── Business Plan

│ ├── Plan Execution

│ ├── Family & Society

│ └── Women Entrepreneurship

└── UNIT 4: INNOVATION & PROBLEM SOLVING

├── Entrepreneur as Problem Solver

├── Innovation

├── Social Entrepreneurship

├── Risk Taking

│ ├── Insurable

│ └── Non-insurable

├── Internal & External Risks

├── Technology in Business

│ ├── Information Collection

│ ├── Business Intelligence

│ ├── Smart Mobility

 │ ├── Cloud Computing

│ └── Social Media

├── Barriers to Entrepreneurship

└── Business Incubation & Support Systems

UNIT 5 — CONCEPT OF MARKET

1) Meaning of Market

● The word market comes from the Latin word “marcatus”

● It means:

○ merchandise

○ ware

○ traffic

○ trade

○ a place where business is conducted

● Earlier, market meant only a physical place

● Later, it came to mean a region, then a system of buyers and sellers, and now a digital and global
network of exchange

2) Evolution of Market

Traditional market

● Physical place

● Periodic fairs, bazaars, mandis

● Goods brought to one location

● Buyers and sellers meet face to face

 ● Focus on place and commodity

Modern market

● Market is not just a place

● It is a region where buyers and sellers interact freely

● Demand and supply operate

● Price tends to move toward equality

● Communication can be by phone, mail, telegraph, etc.

Emerging market

● Market is now people-oriented

● Market is increasingly internet-based

● Whole world becomes a possible market

● Physical presence is not necessary

3) E-Business and E-Commerce

E-Business

● Conduct of:

○ industry

○ trade

○ commerce

● Done using:

○ computer networks
 ○ internet

● Scope is very wide

● Includes:

○ production

○ product development

○ accounting

○ finance

○ HR

○ management

E-Commerce

● Electronic buying and selling

● Interaction among:

○ enterprises

○ customers

○ suppliers

○ business partners

○ financial institutions

○ government organisations

● Mostly focused on transactions

Difference

● E-business = wider term

 ● E-commerce = narrower term

● E-commerce is a part of e-business

4) Role of E-Business / E-Commerce

● Quick response to customer doubts

● Latest information available through websites

● Wider and global markets

● Shorter distribution channel

● Fewer middlemen

● Lower cost and time

● Less risk in payment

● Easy launch of new products

● Lower personnel cost

5) Market Environment

Meaning

● Forces that affect a firm’s ability to build and maintain relationships with customers

Micro environment / internal environment

● Producer / seller

● Customers

● Competitors

● Suppliers
 ● Marketing intermediaries

Producer / seller

● Creates products and markets

● Decides strategies

● Can shape market trends

● Innovation and ethics help create market advantage

Customers

● Most important force

● “Consumer is King”

● Their needs, income, lifestyle, habits, beliefs, and education shape demand

● Affect:

○ sales

○ profit

○ goodwill

○ expansion

Competitors

● Force business to improve quality, price, and performance

● Competition may be local, national, or international

Suppliers
 ● Provide raw materials and inputs

● Strong supplier relationship is essential for smooth production

Marketing intermediaries

● Wholesalers

● Retailers

● Agents

● Brokers

● Transporters

● Warehouses

● Banks

● Promoting agencies

Macro environment / external environment

● Demographic forces

● Economic forces

● Technological forces

● Political forces

● Natural forces

● Cultural forces

Demographic

● Population size
 ● Density

● Age

● Gender

● Race

● Occupation

● Location

Economic

● Purchasing power

● Income

● Savings

● Spending pattern

● Inflation / recession conditions

Technological

● New products

● New production methods

● New selling methods

● New communication systems

Political

● Laws

● Regulations
 ● Government policies

● Taxes

● Stability or instability

Natural

● Scarcity of resources

● Pollution

● Climate problems

● Environmental pressure

Cultural

● Values

● Beliefs

● Customs

● Traditions

● Social practices

6) Market Research

Meaning

● Systematic and objective study of factors affecting business operations and transfer of goods
from producer to consumer

Why it is needed
 ● Identifies opportunities

● Finds problems

● Supports marketing decisions

● Improves performance

● Reduces uncertainty

Good marketing information

● Clear

● Complete

● Relevant

● Accurate

● Confidential

● Authentic

● Economical

● Precise

● Reliable

● Objective

● Punctual

● Strategically useful

7) Market Survey

Meaning

● Organised, in-depth primary data collection from source

Methods

● Personal interview

● Telephonic interview

● Direct mail

● E-mail

● Online interview

● Questionnaire

● Field work

Steps

1. Planning the survey

2. Field work

3. Analysis and interpretation

4. Report making

Importance

● Understand customer needs

● Reduce risk

● Help attain objectives

● Give market overview

● Forecast sales

● Improve decision-making

● Support pricing and packaging decisions

Types

● Census survey

● Sample survey

8) Expanding Markets

Strategic alternatives

● Stability strategies

● Expansion / growth strategies

● Retrenchment / divestment strategies

● Combination strategies

Expansion strategies

Intensive expansion

● Market penetration

● Market development

● Product development

Integrative expansion

● Vertical expansion

● Horizontal expansion

Diversification
 ● New business lines

● Related or unrelated to existing business

UNIT 6 — BUSINESS FINANCE AND ARITHMETIC

1) Why this unit matters

● Entrepreneurs must understand business numerically

● Basic arithmetic is essential:

○ addition

○ subtraction

○ multiplication

○ division

○ percentage

2) Cash Register / Cash Book

Meaning

● Record of all cash transactions

● Book of original entry for cash receipts and cash payments

Importance

● Keeps financial record

● Helps track money movement

 ● Basis for cost, revenue, profit, and cash analysis

3) Cash Inflow and Cash Outflow

● Cash inflow = money coming into business

● Cash outflow = money going out of business

4) Cost Structure

Main components

● Start-up cost

● Fixed cost

● Variable cost

Start-up cost

● Expenses required to begin business

● Examples:

○ land

○ building

○ machinery

○ equipment

○ registration

○ rent advance

○ initial stock

○ inauguration cost
 ○ software/computer setup

Fixed cost

● Remains constant in the short run

● Examples:

○ rent

○ salary

○ insurance

○ office overhead

○ administrative expenses

Variable cost

● Changes with output level

● Examples:

○ raw material

○ packing material

○ commission

○ direct labour

○ transport per unit

5) Unit of Sale, Unit Cost, Unit Price

Unit of sale
 ● One item or one service sold

Unit cost

● Cost of producing one unit

Unit price

● Selling price of one unit

Gross profit per unit

● Unit price minus unit cost

6) Expenses, Expenditure, Profit

● Expenditure = actual money spent

● Expense = cost of using resources to earn revenue

● Profit = excess of revenue over expenses and costs

Non-cash expense

● Example: depreciation

7) Income Statement

Meaning

● Statement showing profit or loss for a period

Main parts

● Revenue

● Cost of goods sold

● Fixed cost

● Gross profit

● Net profit

● Tax adjustments where needed

Importance

● Shows financial performance

● Helps compare periods

● Helps planning and control

8) Cash Flow Projection

● Expected movement of cash into and out of business

● Important because profit does not always mean cash availability

9) Break-Even Analysis

Meaning

● Point where total revenue equals total cost

● No profit

● No loss
Importance

● Helps pricing

● Helps target setting

● Helps profit planning

● Helps decision-making

Limitation

● Less useful for multi-product firms because products may have different costs and margins

10) Taxes

Direct tax

● Paid directly to government

● Cannot usually be shifted

● Examples:

○ income tax

○ wealth tax

○ corporation tax

○ property tax

Indirect tax

● Paid as part of price of goods/services

● Can be shifted to buyer

 ● Examples:

○ customs duty

○ excise duty

○ sales tax

○ VAT

○ service tax

Why taxes matter

● Government revenue

● Public welfare

● Social and economic development

UNIT 7 — RESOURCE MOBILIZATION

1) Meaning of Resource

● Resource = anything needed to support business activity and achieve goals

● Resources may be:

○ physical

○ human

○ financial

○ material

○ intangible
2) Resource Mobilization

● Process of getting required resources

● Must be:

○ timely

○ cost-effective

○ suitable for organisational goals

3) Types of Resources

Physical resources

● Land

● Building

● Plant

● Machinery

● Tools

● Technology

● Infrastructure

Human resources

● Managers

● Workers

● Skilled staff

● Professionals

● Support staff
Financial resources

● Capital

● Loans

● Shares

● Credit

● Retained profits

Material resources

● Raw materials

● Supplies

● Production inputs

Intangible resources

● Goodwill

● Reputation

● Brand value

● Knowledge

● Expertise

4) Human Resources

Main idea

● People are the most important resource in an enterprise

● Business success depends on the right people in the right job at the right time
What must be planned

● Qualification

● Skill

● Experience

● Aptitude

● Number of employees needed

● Future expansion needs

Why important

● Machines and money cannot work alone

● Humans run, manage, and improve business processes

5) Mentorship

Meaning

● Developmental partnership where one person shares knowledge, skills, information, and
perspective for another’s growth

Mentor

● Trusted guide

● Adviser

● Wise counsellor

Role of mentor
 ● Teaching

● Coaching

● Giving feedback

● Building confidence

● Helping decisions

● Connecting resources and networks

Business role

● Helps diagnose business issues

● Helps prepare documents

● Helps find partners

● Helps access finance

● Helps connect experts like lawyers, accountants, consultants, suppliers

Benefits

● Improves growth

● Builds confidence

● Supports learning

● Helps retain talent

● Improves productivity

6) Capital Structure

Meaning
 ● Mix of long-term funds used by business

● Includes own funds and borrowed funds

Importance

● Supports stability

● Balances risk and control

● Prevents over-capitalisation

● Prevents under-capitalisation

7) Fixed Capital

● Needed for long-term assets

● Examples:

○ land

○ building

○ machinery

○ plant

○ equipment

8) Working Capital

● Needed for daily operations

● Used for:

○ salaries

○ raw material
 ○ bills

○ routine expenses

○ inventory management

Factors affecting working capital

● Nature of business

● Size of business

● Production cycle

● Credit policy

● Inventory policy

● Automation level

● Seasonality

● Turnover rate

9) Sources of Finance

Internal / own sources

● Personal savings

● Ploughing back of profits

● Equity shares

● Preference shares

● Seed capital

External / borrowed sources

 ● Bank loans

● Financial institutions

● Debentures

● Public deposits

● Trade credit

● Private lenders

● Grants

Venture support

● Angel investors

● Venture capitalists

● Seed financing

10) Why resource location matters

● Good location reduces:

○ transport cost

○ production cost

○ working capital burden

● It improves:

○ efficiency

○ profitability

○ speed of operations
INTEGRATED MIND MAP — UNIT 5 TO UNIT 7
ENTREPRENEURSHIP
│
├── UNIT 5: CONCEPT OF MARKET
│ ├── Meaning of Market
│ │ ├── Latin origin: marcatus
│ │ └── trade / merchandise / place of business
│ ├── Evolution of Market
│ │ ├── Traditional market
│ │ ├── Modern market
│ │ └── Emerging market
│ ├── E-Business vs E-Commerce
│ │ ├── E-Business = full business online
│ │ └── E-Commerce = buying/selling online
│ ├── Market Environment
│ │ ├── Micro environment
│ │ │ ├── Producer
│ │ │ ├── Customer
│ │ │ ├── Competitor
│ │ │ ├── Supplier
│ │ │ └── Marketing intermediaries
│ │ └── Macro environment
│ │ ├── Demographic
│ │ ├── Economic
│ │ ├── Technological
│ │ ├── Political
│ │ ├── Natural
│ │ └── Cultural
│ ├── Market Research
│ ├── Market Survey
│ │ ├── Planning
│ │ ├── Field work
│ │ ├── Analysis
│ │ └── Report making
│ └── Market Expansion
│ ├── Stability
│ ├── Expansion
│ ├── Retrenchment
│ └── Combination
│
├── UNIT 6: BUSINESS FINANCE AND ARITHMETIC
│ ├── Cash Book / Cash Register
│ ├── Cash Inflow and Outflow
│ ├── Cost
│ │ ├── Start-up cost
│ │ ├── Fixed cost
│ │ └── Variable cost
│ ├── Unit of Sale / Unit Cost / Unit Price
│ ├── Expenditure and Expenses
│ ├── Profit
│ ├── Income Statement
│ ├── Cash Flow Projection
│ ├── Break-Even Analysis
│ └── Taxes
│ ├── Direct tax
│ └── Indirect tax
│
└── UNIT 7: RESOURCE MOBILIZATION
├── Meaning of Resource
├── Resource Mobilization
├── Types of Resources
│ ├── Physical
│ ├── Human
│ ├── Financial
│ ├── Material
│ └── Intangible
├── Human Resources
│ ├── Right person
│ ├── Right job
│ └── Right time
├── Mentorship
│ ├── Mentor
│ ├── Guidance
│ ├── Coaching
│ └── Networking
├── Capital Structure
├── Fixed Capital
├── Working Capital
├── Sources of Finance
│ ├── Internal
│ ├── External
│ └── Venture support
└── Importance of Location