A Project On

A Study on Problems Faced by The Start-Ups

A Project Submitted to

University of Mumbai for partial completion of the degree of

Bachelor of Management Studies

Under the Faculty of Commerce

By

Soham Gunaji Dalvi

Roll No: 420195

Under the Guidance of

Prof. ANITA DAS

UNIVERSAL MSG-SGKM COLLEGE OF ARTS, SCIENCE, AND COMMERCE

Plot No. 17, Tilak Road, Opp. Lion’s Garden, Ghatkopar (East), Mumbai 400 077

APRIL 2023
 CERTIFICATE

This is to certify that Mr. Soham Gunaji Dalvi has worked and duly completed his Project
Work for the degree of Bachelor of Management Studies under the Faculty of Commerce in
the subject of Marketing and his project is entitled, “A Study on Problems Faced by The
Start-Ups ” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that
no part of it has been submitted previously for any Degree or Diploma of any University.

It is his own work and facts reported by his personal findings and investigations.

Prof. Anita Das

Name and Signature of

Guiding Teacher

Date of submission:25th March 2022.

 Declaration by learner

I the undersigned Mr. Soham Gunaji Dalvi hereby declare that the work embodied in this
project work titled “ A Study on Problems Faced by The Start-Ups ”, forms my own
contribution to the research work carried out under the guidance of Prof. Anita Das is a result
of my own research work and has not been previously submitted to any other University for
any other Degree/Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Soham Gunaji Dalvi.

Name and Signature of the learner

Certified by

Signature of the Guiding Teacher

Prof. Anita Das

 Acknowledgment

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal Ms. Nawal Khan for providing the necessary facilities
required for completion of this project.

I would also like to express my sincere gratitude towards my project guide Prof. Anita Das
whose guidance and care made the project successful.

Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me throughout
my project.

Soham Gunaji Dalvi.

Name & Signature of the Learner

[Link]. TOPIC PAGE NO.
1. Introduction to the Industry
1.1 Definition of Start-up
1.2 Start-up India
1.3 Start-up Company
1.4 Here are the 19 plans given by Government
1.5 Entrepreneurship
2. Literature review
2.1 Imperfect education system & conservative
lifestyle
2.2 Lack of support system & entrepreneurship
Ecosystem.
2.3 India lacks enough angel investors
2.4 Human Talent
2.5 Women Entrepreneur
3. Research Methodology
3.1 Objectives of the study
3.2 Data Collection Method
3.3 Women Entrepreneur in India
3.4 Reasons for limited start-up in India
3.5 Importance of Finance Agency’s in India
3.6 Entrepreneurial Development Plan
4. General Analysis
PESTLE analysis
Challenges and Opportunities
Challenges faced by women entrepreneur
5. 5.1 Findings
5.2 Suggestions
5.3 Conclusions
6. 6.1 Article
6.2 Case Studies
7. Bibliography &
Bibliography & Webliography
 EXECUTIVE SUMMARY

India is a country of many great legends that were famous all over the world because of their
work, sharp mind & high skill. India’s youth are very talented, highly skilled & full of
innovative ideas. But they do not get opportunities due to a lack of solid support & proper
guidance in the right direction. In this way, the BJP government launched “the START-UP
INDIA STAND UP INDIA” scheme on 16 January 2016 to help India’s youth go in the right
direction using their new & innovative ideas. This scheme was launched to motivate &
promote new businesses & grow their career as well as the economy of the country. This
program is a big start to enable startups through financial support so that they can use their
innovative ideas in the right direction. There are tremendous opportunities for Start-up
entrepreneurs in India. The key areas are Like Textile, Media, Health Sector, Event Planner,
Tourism, Automobile, etc. So, there are various opportunities where entrepreneurs can start
their Start-ups. But along with opportunities, there are some challenges also that Startup
entrepreneurs may have to face like Infrastructure Deficit in India, Risk Factors and the Right
Talent Acquisition, etc. Despite of these challenges, Government, as well as Startup
entrepreneurs, should have to work together to face these challenges & make this program
effective. The study will focus on the Start-up India scheme, opportunities available under
this scheme as well as challenges that may have to be faced & suggestions to overcome the
challenges to make the Start-up India program successful. Skill India Programme, Start-up
India, and Stand Up India program are the buzzwords of today in the manufacturing,
Production, and Services sectors. As the present government has taken the oath to inculcate
skills in every youth and help them towards start-ups and establish their own enterprise and
become the owner of their own rather than doing jobs with others and intern help in
employment and GDP development. It is also observed that SC/ST/Women categories are
marginalized in this area since inception and it was the dream of Dr. B. R. Ambedkar that
equal opportunities be given to them also to grow and showcase their talents, ideas, and
ability to prove themselves as a successful entrepreneur, a person, and citizen of India. The
present study is to understand the progress of this program and its success. The results of the
study state that nearly 70% of the units expressed positive growth and expressed that if
financial support would’ve not been availed through this platform, it would be a dream to
start up their own industries, and women entrepreneurs also feel that they are more
empowered and able to establish their identity.

INTRODUCTION TO THE COMPANY

1.1 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 for a start-up to work on
technology, 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.

1.2 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 focus relating to this initiative is to discard restrictive State 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 is defined as an entity that is
headquartered in India, which was opened less than seven years ago and has an annual
turnover of 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. The initial capital of 200₹billion (US$2.8 billion) has been
allocated for this scheme The start-up scenario in India has gone a huge makeover, now
people are not alien to the concept of start-ups. Earlier people had no idea what this concept
is all about, thanks to the rise in media’s encouraging coverage towards start-ups recently.
The concept of the start-up is somehow different for Indians and not so different for people of
developed economies. Start-ups are something to do with new products/processes for the
entire market or a fraction of the market. Start-ups must not be confused with small
businesses, as the biggest difference is INNOVATION. Recently the government of India has
launched the “Start-up India” initiative to foster/support and encourage start-up efforts in
India. The results are very satisfactory with the initiative being accepted with open arms in
the country, various state governments have also started similar efforts. India stands at a
very important crossroads, India stood at number three in overall technology-driven start-ups
in the world (The 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 graduates as the
patterns of start-ups in India further suggest, they are undertaken in very unconventional
terrain like medical etc. The important question remains is, how start-ups are shaping the very
structure of the 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 that is conducive and
optimum for start-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 to 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- scenario is looking very convince 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. As it is a known fact that when someone starts a
new enterprise or tries to get into entrepreneurship, they face many problems like
finance, land permissions, 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. 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 business’ 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 centres. In Bengaluru, Chennai, Gurgaon, Hyderabad, Mumbai,
Noida, Pune, Trivandrum and Vijayawada. The result of first ever startup state ranking were
announced in December 2018 by the Department of Industrial Policy and Promotion (DIPP)
based on the criteria of policy, incubation hubs, seeding innovation, scaling innovation,
regulatory change, procurement, communication, North-Eastern states, and hill states.

2018 Start-up State Ranking are as follows:

Best performer: Gujarat

Top performers: Karnataka, Kerala, Odisha, and Rajasthan

Leader: Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, and Telangana

Aspiring leaders: Haryana, Himachal Pradesh, Jharkhand, Uttar Pradesh, and West
Bengal

Emerging states: Assam, Delhi, Goa, Jammu & Kashmir, Maharashtra, Punjab,
Tamil Nadu, and Uttarakhand

Beginners: Chandigarh, Manipur, Mizoram, Nagaland, Puducherry, Sikkim, and Tripura

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 the Central government with 1:1. Telangana has
launched the largest incubation centre in India as "Hub". Andhra Pradesh has allocated a
17,[Link]. 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 organised a two-day Start-up
Conclave in Bhubaneswar on November 28, 2016.

1.3 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. 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.

1.4 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, labour 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. 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 centre’s at national institutes.
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 the
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.

1.5 Entrepreneurship: Earlier people had no idea what this concept is all about, thanks to
the rise in media’s encouraging coverage towards start-ups recently. The concept of
start-up is somehow different for Indians and not so different for people of developed
economies. Start-ups are something to do with new product/process for the entire market or
fraction of the market. Start-ups must not be confused with small businesses, 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 India. 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 startups 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.

The entrepreneur is a factor in and the study of entrepreneurship reaches back to the work of
Richard Cantillon and Adam Smith in the late 17th and early 18thcenturies. However,
entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries
and empirically until a profound resurgence in business and economics since the late
1970s. In the 20th century, the understanding of entrepreneurship owes much to the
work of economist Joseph Schumpeter in the 1930s and other Austrian economists
such as Carl Manger, Ludwig von Mises and Friedrich von Hayek. According to
Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or
invention into a successful innovation. Entrepreneurship employs what Schumpeter
called "the gale of creative destruction" to replace in whole or in part inferior innovations
across markets and industries, simultaneously creating new products including new business
models. In this way, creative destruction is largely responsible for the dynamism of industries
and long-run economic growth. The supposition that entrepreneurship leads to economic
growth is an interpretation of the residual in endogenous growth theory and as such is hotly
debated in academic economics. An alternative description posited by Israel Kerzner suggests
that the majority of innovations may be much more incremental improvements such as the
replacement of paper with plastic in the making of drinking straws.
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 sceptical 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 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. Even if young Indian individuals have
intention to start their own business ,their family usually places a considerable amount of
negative pressure on them to forget entrepreneurship and look for a “stable job” instead.

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,” headed. “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. 2.5 Women Entrepreneur:
Melanne Verveerin, 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 Balasubramanian,
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. 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 frame work, 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.
 [Link] 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: The 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

The research objective should be RELEVANT, FEASIBLE, LOGICAL, OBSERVABLE,

UNEQUIVOCAL & MEASURABLE.

An objective is a purpose that can be reasonably achieved within the expected time frame and
with the available resources.

The objective of the research project summarizes what is to be achieved by the study.

The research objectives are the specific accomplishments the researcher hopes to achieve by
the study.

The objectives include obtaining answers to research questions or testing the research
hypotheses.

(C) Objectives of the study are as follows:

1. To study the financial problems faced by 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.

4. To highlight the importance of financing agencies for start-ups in India.

5. To understand the Entrepreneurial Development Plan

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’ve 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.
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
organisations; (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, labour bureaus and other public/ private individuals and organizations.(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).

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 least51 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 entrepreneurs. Women entrepreneurs are gaining a strong
hold in most of the developing countries including India, Brazil etc. Another recent trend is
women are increasingly coming on the fore front in private and government business
organizations and occupying the top positions everywhere-like Indra Nooyi, Chanda
Kochhar, Shikha Sharma, Kiran Mazumdar Shaw, Naina Lal Kidwai, etc. Again, there is
increased awareness and women entrepreneurs are increasingly finding easy to finance their
business. Women entrepreneurs are also taking up issues of environmental changes too.
(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 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’s
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. While the
number of women operating their own businesses is increasing globally, women
continue to face huge obstacles that stunt the growth of their businesses, such as lack of
capital, strict social constraints, and limited time and skill.(B)Reasons for becoming Women
Entrepreneurs :The glass ceilings are shattered and women are found indulged in every of
businesses. The entry of women into business in India is traced out as 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. 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. The challenges and
opportunities provided to the women of digital era are growing rapidly that the job seekers
are turning into job creators. Many women start a business due to some traumatic
event, such as divorce, discrimination due to pregnancy the corporate glass
ceiling, the health of a family member, or economic reasons such as a layoff. But a
new talent pool of women entrepreneurs is forming today, as more women opt to leave
corporate world to chart their own destinies. They are flourishing as designers,
interior decorators, exporters, publishers, garment manufacturers and still exploring new
avenues of economic participation.(C)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 a number of welfare measures for women.
Establishment of the Central Social Welfare Board, organization of Mahala
Mandal’s and the Community Development Programmes 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 programmes. 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 were in need of 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. Steps taken in Seventh Five-Year Plan: In the
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
groups 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.

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 agro-based

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 alleviate
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 adopted by the Government to provide assistance to women entrepreneurs.
(c) Swarna Jayanti Gram Swarozgar Yojana and Swarna Jayanti Sekhari Rozgar Yojana were
introduced by the government to provide reservations for women and encouraging them to
start their ventures. (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 Programmes(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. There are different bodies such as NGOs,
voluntary organizations, self-help groups, institutions and individual enterprises from rural
and urban areas which collectively help the women entrepreneurs in their activities.
[Link] Programmes: 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. 7. Rastriya Mahila Kosh: In 1993,
Rastriya Mahila Kosh was set up to grant micro credit to pore women at reasonable rates of
interest with very low transaction costs and simple procedures.
 States No. of units No. of Women Percentage
Registered Entrepreneurs
Tamil Nadu 9618 2930 30.36
Uttar Pradesh 7980 3180 39.84
Kerala 5487 2135 38.91
Punjab 4971 1618 33.77
Maharashtra 4339 1394 32.12
Gujrat 3872 1538 39.72
Karnataka 3822 1026 26.84
Other States & UTS 14576 4185 28.72
Total 57452 18848 32.82

Promotional Organizations to help Women Entrepreneur:

Federation of Indian Women Entrepreneur–The FIWE was started in 1993 at the fourth
international 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.

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 centre
at Ponvel, 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. WIT had plans to launch computer training for women.

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.

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 Indian
market.

Top reason why most Indian startups fail:

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.

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.

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 mentor-ship 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.

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 is 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 agencies 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.

(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 Public Banks: These type of
Venture Capitalist funds is promoted by Public Banks. SBI Capital Markets Ltd and Can
bank Venture Capital Fund are some examples of these kinds of VC funds. 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. Promoted by Private Sector
Companies: This category consists of Venture Capital funds promoted by private Sector
Companies. Like: Infinity Venture India Fund, IL&FS Trust Company Limited (ITCL).
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:  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.
(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.

(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 calibre
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 a custom investment based
on the funds you need which give you an edge. Lastly, the high net-worth individuals
charge you lower fees.

(I)Bank Loans: This might probably be the first option when you have an idea of your
own startup. 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. 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%.

(H) 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 to invest, 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 practising 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?) 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 writings, 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. We would like to define entrepreneurship as a systematic, purposeful and creative
activity of identifying a need, mobilising resources and organising 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 mobilise 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.

[Link] 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 legitimise 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.

3. Innovation: From the point of view of the firm, innovation may be cost saving or revenue-
enhancing. If it does both 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 organisational forms for doing things better, cheaper, 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 pathbreaking, 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.

4. Organisation of Production: Production, implying creation of form, place, time personal

utility, requires the combined utilisation of diverse factors of production, land, labour, capital
and technology. Entrepreneur, in response to a perceived business opportunity mobilises
these resources into a productive enterprise or firm. It may be pointed out that the
entrepreneur may not be possessing 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. 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.

5. 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, capital providers 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 realised 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 favouring 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-premiership, Net premiership,
Green/Environmental or Eco-premiership, Intra-corporate/firm or Intra-premiership and
Social entrepreneurship. In fact, entrepreneurship has come to be regarded as a ‘type of
behaviours’, whereby one, (i) rather than becoming a part of the problem, proactively tries to
solve it; (ii) uses personal creativity and intellect to develop innovative solutions; (iii) thinks
beyond resources presently controlled in exploiting the emerging opportunities or attending
to the impending problems; (iv) has the conviction to convince others of one’s ideas and seek
their commitment towards the project; and (v) has the courage of heart to withstand
adversities, persist despite setbacks and be generally optimistic.

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. Just as managers are expected to play entrepreneurial roles in the times of
need, likewise the entrepreneurs must also demonstrate managerial abilities for the success of
their ventures. Irrespective of whether the entrepreneurs pave way for the managers or they
themselves assume the managerial responsibilities, it is possible to distinguish between the
term’s entrepreneurship and management.

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.

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
mobilising 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.

3. Generation of Employment: Every new business is a source of employment to people with

different abilities, skills and qualifications. As such entrepreneurship becomes a source of
livelihood to those who do neither 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.
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 ‘eChau 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?
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, 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.

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,
sectoral/ 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).

Identification of Specific Product Offering: While the environment scan leads to the
discovery of more generalised business opportunities, there is a need to zero in on to a
specific product or service idea. For example, trade liberalisation 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 organised 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
proforma 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. 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 rationalise why?). Well-
developed financial system, good infrastructure, helpful bureaucracy all these have a
favourable impact on entrepreneurship. Specially designed and dedicated institutions such as
National Institute for Entrepreneurship and Small Business Development (visit,
[Link]), Entrepreneurship Development Institute of India (visit, [Link])
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 sociocultural 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 leaped 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.

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.

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 is your
audience and what are their backgrounds, what could be the possible 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 behaviour. 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. 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
behaviour 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 organisational/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
selfinterests 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. 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 the entrepreneur is profit maximization.

Entrepreneurial Values and Attitudes:

While explaining human behaviour, one often comes across the terms’ 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 behavioural 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.

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, paperwork can wait’. 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.
McClelland’s research upheld the proposition that differences in the levels of achievement
motivation as revealed by the analysis of the stories and the readers accounted for the
differences in the level of economic development. How? What would be the process?
McClelland observed that entrepreneurship becomes the medium through which the
achievement motivation manifests the best and through which the development takes off.

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.

Business Plan

1. Executive Summary

2. Business/industry background

3. Product/service to be offered

4. Market analysis

5. Sales and marketing strategy

6. Production/operations strategy

7. Management

8. Risk factors

9. Funds required
Resource Mobilisation
Scanning the environment for entrepreneurial opportunities

Development of product/service idea

Assessment of feasibility of the idea and the preparation of a business plan

Appraisal by the funding agencies

Project commissioning and launch

Adaptation and management growth

Review

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.

Management Control:

8. Managing finance

9. Managing production

Technology:

10. Acquiring and overseeing assembly of the factory

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

12. Upgrading the production process and product quality

13. Introducing new production techniques and products.

[Link] ANALYSIS

4.1 PESTLE Analysis:

PESTLE analysis is a business measurement tool to assess the overall macro environment of
business. PESTLE is acronym for Political, Economic, Social, Technological, Legal and
Environmental. It is a part of the external analysis while conducting market research, and it
gives an overview of multiple macro-environmental 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 principal issues in this segment are
political stability, tax guidelines, trade regulations, safety regulations, labour 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.

Startups India Action Plan Impact: Startups action plan will change the buying pattern and
behaviour 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 labour inspections for the first
3 years from labour 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

4.2 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. 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 [Link] 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. In this regard it will be interesting to see
the contours of the recently announced Start-up Fund in this year’s budget. For startups 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 startups 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 succour 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.

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 drives 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. Problems
around its health, education, infrastructure, sanitation are unique to the country and solutions
from western world cannot solve it. 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. Start-ups that look to
service and cater to the large population in solving a pain point or providing a utility in one of
the world’s most important consumer markets, stand to do well.

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 rural 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 logistics and even something like access to bank accounts. Higher
mobile penetration has also led to increased financial inclusion and flow of credit to the
unbanked. Growth in mobile penetration is transforming the way businesses and consumers
communicate and work. With data enabled mobile phones, the very nature of start-ups and
businesses have changed. For example, start-ups that develop mobile apps now have an
everincreasing market to cater to. India is at crossroads where it now has to cater to the
aspirations of a billion people. Existing frameworks can prove to be inadequate and there is a
great need to leverage a billion minds and become a global power. 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. He also drives charity for underprivileged known as Turning Life Foundation.

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.

4.3 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.

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.

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.

Lack of Self Confidence: Women lack of self confidence in their own abilities which is partly
due to socio cultural environment. Having accepted a subordinate status for long even at
home members of their family do not appear to have total confidence in their abilities and on
their decision making.
[Link], SUGGESTIONS & CONCLUSIONS
5.1 Findings:

Many 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.
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.

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 todays’ 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.

5.3 Conclusion:
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 ‘Make 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
 6.1 Article
Case 1: Failed Startup in B2C Sector Mr. K chartered accountant by profession and
technocrat by heart, has attempted to bridge the gap in eLearning space with his platform-
based solution. The serial entrepreneur at the age of 43, with 20+ years of industrial
experience and the expertise of founding three startups earlier, has embarked on the new
journey with two more partners who are technically savvy. 1.1 Product The startup chose to
work on the emerging technology, Platform as a Service (PaaS), and planned for a grand
product. It took 30 months for the startup to build the product resulting in additional cost
leading to the realization that “Plan for MVP (minimum viable product) with product
roadmap and do not.
 6.2 CASE STUDIES
(A)Cheez-burger:

Entrepreneur: Ben Huh, founder of Seattle-based Cheez-burger, which owns the websites Fail
Blog and I Can Has Cheez-burger (home of the LOLcat).

Setup: Huh was a 22-year-old journalism major when he moved to Chicago and founded
software analytics firm Raydium in January 2000. He'd worked at startups but didn't have
much experience or a network to raise money easily. Still, he cobbled together $750,000 over
two rounds.

"Uh-oh" moment: Eighteen months later, he hit a wall. "You're hopeful to the end, but we
were flat out of money and couldn't meet payroll," he says. Huh tried raising more money,
but the dot-com crash was in full effect, and there was none to be had. For two weeks, he
says, he could barely leave his room. "These investors had put a fortune on their faith in me,
and you feel like you should have rewarded their faith," he recalls. "You feel like you can't do
another company again."

The way out: Six years passed before Huh decided to buy I Can Haz Cheeseburger and begin
building his funny-blog empire. During that time, he came to terms with the fact that
investors understood the risks, and that Raydium might not have worked even if he'd raised
enough money. He compares the process of starting over to getting back on a bicycle: "You
know how painful it can be, but you do it anyway," he says. "I think you are better prepared,
mentally and financially, but you never know if it's going to be successful. That's called
maturity."

Success: Huh took over Cheez-burger in September 2007. The blog network now receives 25
million unique visitors and half a billion-page views per month, and has raised more than $32
million to jump-start a platform that will allow anyone to create memes. Cheez-burger boasts
90 employees, a handful of whom star on the Bravo reality TV show LOLwork.

Take-away: Draw some kind of line between business and personal life, especially when it
comes to finances. Huh mixed his credit cards and ended up shouldering company debt when
Raydium folded. "But once you realize those limits, go for them," he says. "Think of it as the
best education money can't buy."
(B)The Muse:

Entrepreneur: Kathryn Minshew, CEO and co-founder of New York-based The Muse, a
career-development platform with original content, interactive job boards and comprehensive
company profiles.

Setup: In December 2010 Minshew quit her job at the Clinton Health Access Initiative to run
Pretty Young Professionals (PYP), a women's networking site she had started with three co-
workers a couple of months before. She bootstrapped the company and guaranteed a small
payroll with personal savings, working as an unpaid CEO and editor in chief. By spring 2011
she'd managed to attract only 9,000 users. Then, a redesign increased user to 20,000, and the
other members of the founding team began to get more involved.

"Uh-oh" moment: The group splintered in half after an argument about how best to run the
company, and the threat of a lawsuit loomed. "We split our equity on a piece of notebook
paper. We didn't have lawyers; I didn't think we needed them," Minshew recalls. "I spent
three weeks alternating between the fatal position and the whiteboard trying to figure out
how strongly I wanted to fight for the existing company vs. how prepared I was to strike out
and do it over."

The way out: Minshew decided on a do-over, watching PYP's rebranding from the side lines.
In September 2011 she launched The Daily Muse (now called The Muse), and PYP's entire
staff, plus another co-founder, joined her. The Huffington Post and TechCrunch covered the
launch; the site drew more visitors in its first month than PYP had in its best. "The
community knew what happened and stood behind us with tweets and shares," Minshew
says. "It was painful, but being forced to start over was a unique sort of gift, because having
been through a lot together, the team comes out of it with the confidence that nothing is
going to stop us." In November, she was accepted into the prestigious Y Combinator
accelerator program. She added mobile, local and social media functionality to her platform
to look more like a "billion-dollar" startup.

Success: She's still out $20,000 in savings, but by the end of 2012 the website had nearly 2
million users in more than 160 countries, increasing at a rate of 30 percent every month.
The Muse, now with eight employees, has partnerships with 60-plus companies, including
Intel, Sephora, NPR, Pinterest, Twitter and foursquare.

Take-away: In a business partnership, formalize the process and paperwork, and hire a
lawyer who can spot problems you never dreamed would arise--just in case things get
personal. And of course, choose your partners wisely. "It's so important to find people who
share your values and ethics," she says. "There are a lot of things you can paper over, and
having different sets of opinions is valuable, but not when it comes down to code of
conduct."
WEBLIOGRAPHY
Sharifi, Omid, PhD Scholar, Aligarh University, Understanding the

financing challenges faced by start-ups in India-Research Paper.

Study on Women Entrepreneurship in India

[Link]

Start-up India-[Link] India.

Economic Times Website-Challenges and Opportunities

Case [Link]
BIBLIOGRAPHY
Mascarenhas, Romeo S, Business Planning and Entrepreneurship

Management, Published by-Vipul Prakashan ,2017.

Article-The Economic Times News Paper