A Project On

A Study on Financial 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
UNIVERSAL MSG-SGKM COLLEGE OF ARTS, SCIENCE AND COMMERCE
Plot No. 17, Tilak Road, Opp. Lion’s Garden, Ghatkopar (East), Mumbai 400 077
 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 Finance and his project is entitled, “A Study on Financial 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 Financial 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

SR.NO. 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 17,000-sq.ft.
Technological Research and Innovation Park as a Research and Development laboratory. It has
also created a fund called "Initial Innovation Fund" of 100 crore₹ (US$14 million)
for entrepreneurs. The government of Madhya Pradesh has collaborated with the Small
Industries Development Bank of India (SIDBI) to create a fund of 200₹ crore (US$28 million).
Rajasthan has also launched a "Start-up Oasis" scheme. In order to promote start-ups in Odisha,
the state government 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.
 3.RESEARCH 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. 5.Training 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.

1.Systematic Activity: Entrepreneurship is not a mysterious gift or charm and something that
happens by chance! It is a systematic, step-by step and purposeful activity. It has certain
temperamental, skill and other knowledge and competency requirements that can be acquired,
learnt and developed, both by formal educational and vocational training as well as by
observation and work experience. Such an understanding of the process of entrepreneurship is
crucial for dispelling the myth that entrepreneurs are born rather than made.

2. Lawful and Purposeful Activity: The object of entrepreneurship is lawful business. It is

important to take note of this as one may try to 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,
niesbud.nic.in), Entrepreneurship Development Institute of India (visit, www.ediindia.org) that
conduct entrepreneurship awareness and entrepreneurship development programmes (EAPs
and EDPs) a further fillip to this activity. An important enabler or disabler of entrepreneurship
is the prevailing 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.

4.GENERAL 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 158.It is
uncannily difficult to start a business in India and myriad laws and regulations means it takes
about 30 days to comply compared to just 9 days in OECD countries. The government’s role
has so far been limited to giving out grants and loans, but without an effective, enabling
environment, implementation is far off the target. 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.
5.FINDINGS, 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

https://www.researchgate.net.

Start-up India-https://en.wikipedia.org/wiki/Startup India.

Economic Times Website-Challenges and Opportunities

Case Studies-www.entrepreneur.com
BIBLIOGRAPHY
Mascarenhas, Romeo S, Business Planning and Entrepreneurship

Management, Published by-Vipul Prakashan ,2017.

Article-The Economic Times News Paper