UNIVERSITY OF MUMBAI

(2023-2024)

A PROJECT REPORT ON

“A STUDY OF FINANCIAL PROBLEMS FACED

BY START UPS”

SUBMITTED BY:
MR. SHANKAR MUKHIYA
ROLL NO.3539

BACHELOR OF BANKING AND INSURANCE

SEMESTER VI
(2023-2024)

PROJECT GUIDE
RAJU D. GOLE

Sadhana Education Society’s

L.S. RAHEJA COLLEGE OF ARTS AND COMMERCE
Juhu Road, Santacruz (West),
 Mumbai- 400054
UNIVERSITY OF MUMBAI
(2023-2024)

A PROJECT REPORT ON

“A STUDY OF FINANCIAL PROBLEMS FACED

BY START UPS”

SUBMITTED BY:
MR. SHANKAR MUKHIYA
ROLL NO. 3539

BACHELOR OF BANKING AND INSURANCE

SEMESTER VI
(2023-2024)

PROJECT GUIDE
RAJU D. GOLE

Sadhana Education Society’s

L.S. RAHEJA COLLEGE OF ARTS AND COMMERCE
Juhu Road, Santacruz (West),
Mumbai- 400054
 DECLARATION

I, MR. SHANKAR RAMESH MUKHIYA, the student of Bachelor of

Banking & Insurance Semester VI (2023-2024) hereby declare that I have
successfully completed the project on A STUDY OF FINANCIAL
PROBLEMS FACED BY START UPS for the academic year 2023-
2024. The project is done under the guidance of Mr. Raju D. Gole and this
project work is submitted in the partial fulfilment of the requirements for the
award of the degree of Bachelor of Banking & Insurance.

The information submitted is true and original to the best of my knowledge.

MR. SHANKAR RAMESH MUKHIYA

( Roll no.3539 )
 CERTIFICATE

This is to certify that Mr / Miss SHANKAR RAMESH MUKHIYA

, Roll No. 3539 of Bachelor of Banking & Insurance Semester VI
(2023-2024) has successfully completed the project on A STUDY OF
FINANCIAL PROBLEMS FACED BY START UPS under the
guidance of Mr. Raju D. Gole for the academic year 2023-2024.

Mr. RAJU D. GOLE Dr. DEBAJIT N. SARKAR

(Course Coordinator) (Principal)
Mr. RAJU D. GOLE
(Project Guide/Internal Examiner) (External
Examiner)

ACKNOWLEDGEMENT

I would like to express my gratitude to all those who gave me the possibility to
complete this project. I take this opportunity to thank the University of Mumbai
for giving me chance to do this project.

I am deeply indebted to my project guide Mr. Raju D. Gole from L. S. Raheja

College of Arts & Commerce whose stimulating suggestions and
encouragement helped me all the time of research.

I wish to express my gratitude to Mr. Raju D. Gole, Course Coordinator and Dr.
Debajit N Sarkar, Principal of L.S Raheja College of Arts & Commerce for
their support.

I am thankful to my college library and computer lab staff for providing me

with all necessary amenities which were of great help during the project.

My subject teachers were also very supportive as they looked closely at the final
version of the thesis for English style and grammer, correcting both and offering
suggestions for improvement.

Above all, I would like to thank my parents and friends for their patience, love
and support which enabled me to successfully complete my project.
EXECUTIVE SUMMARY
 TABLE OF CONTENTS

Sr. No. Particulars Page No.

1. Introduction 1

2. Objectives of the study

3. Limitations of the study

4. Significance of the study

5. Research Methodology
a. Research Approach
b. Research Design
c. Sampling Design
6. Company Profile

7. Data Analysis and Interpretation

8. Findings

9. Conclusion

10. Recommendations

Bibliography/Webliography and References

Annexure (Questionnaire)
 A STUDY ON FINANCIAL
PROBLEM FACED BY THE START-
UP's
 1.INTRODUCTION TO THE COMPANY

1.0Definition of Start – ups:

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, government-sponsored Small Business
Administration loans from local banks, or grants from non-
profit organizations and state governments.
Paul Graham says, “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."

1.1 Start-up India:

Start-up India is an initiative of the Government of India. The campaign was

first announced by Indian Prime Minister, Namenda 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 start-up 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
aligned with the concept of start-ups. Earlier people had no idea what this
concept is all about, thanks to the media’s encouraging coverage of start-ups
recently. The concept of a 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 the
USA and UK respectively very nature of start-ups in InTechnology-based based
which is fuelled by young T’s graduates s the patterns of start–up’s in die
further suggests, they have undertaken very unconventional terrain like medical,
etc. The important question that remains is, how start-ups are shaping the very
structure of the economy elsewhere here (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 both conducive and optimum for start-ups. The reason is
very simple, start-ups are necessary for the entrepreneurial and innovative
growth of any nation. Some nations 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 on the front lines with developed
nations in the world, innovation is the key to becoming so. Fortunately, India
has endowed the youngest population which is primarily required for setting up
start-ups. The growing inclination towards “Having something of my own”
attitude is also helping in bringing new ideas into successful implementation.
India has produced some of the leading start-ups in the world, which are
working as the lighthouse for the rest. The prominent examples are OYO
Rooms and Zomato (both catering to very different market segments and
objectives). In short, the tart-up scenario looks very convincing and bright as the
investments are growing in Indian start-ups from worldwide investing bodies
both organized and individuals. A recent example of such investment is the
huge multibillion-dollar investments in various start-ups functioning in India
like Ola and Flipkart. In a way, the start-up era has started in India and it is 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 Gov. 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 a lot of
positivity and confidence among the entrepreneurs of India. According to PM
Narender Modi the start-ups, their technology, and innovation are exciting and
effective instruments for India's transformation. An idea can be converted into a
start-up. Even sometimes the crisis becomes an opportunity and it gives birth to
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 mobilize it 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
to the growth of start-up businesses.

Softbank, which is headquartered in Japan, has invested US$2 billion into

Indian start-ups. The Japanese firm has pledged to invest US$10

Billion. Google declared to launch a start-up, based on the highest votes in

which the top three start-ups will be allowed to join the next Google Launchpad
Week, and the final winner could win an amount of US$100,000in Google
cloud credits. Oracle on 12 February 2016 announced that it will establish nine

incubation centers. In Bengaluru, Chennai, Gurgaon, Hyderabad, Mumbai,

Noida, Pune, Trivandrum, and Vijayawada.

The result of the first-ever start-up state ranking was 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.

The 2018 Start-up State Ranking is 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 center in India as "T-Hub". Andhra Pradesh has allocated a 17,000-
sq.ft. Technological Research and Innovation Park as a Research and
Development laboratory. It has also created a fund called the "Initial Innovation
Fund" of 100 crores (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 crores (US$28 million). Rajasthan has
also launched a "Start-up Oasis" scheme. To promote start-ups in Odisha, the
state government organized a two-day Start-up Conclave in Bhubaneswar on
November 28, 2016.
1.2 Start-up 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 to 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
goes 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.

1.3 Here are the 15 plans Modi has for start-ups:

1. Self-certification:
The start-ups will adopt self-certification to reduce regulatory liabilities. The
self-certification will apply to laws including payment of gratuity, labor
contract, provident fund management, and 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 the app:
An online portal, in the shape of a mobile application, will be launched to help
start-up founders 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 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 investment
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
In case of an investment of
higher value than the market
price, it will be exempt
from paying tax
In case of an investment of higher value than the market price, it will be exempt
from paying tax
10. Building entrepreneurs:
Innovation-related study plans for students in over 5 lakh schools. Besides,
there will also be an annual incubator grand challenge to develop world-class
incubators.
11. Atal Innovation Mission:
The Atal Innovation Mission will be launched to boost innovation and
encourage talented youths.
12. Setting up incubators:
A private-public partnership model is being considered for 35 new incubators
and 31 innovation centers at national institutes.
13. Research parks:
The government plans to set up seven new research parks, including six on the
Indian Institute of Technology campuses and one on 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 an innovation-related program for students in
over 5 lakh schools.

1.4 Entrepreneurship:

Entrepreneurship is the process of designing, launching, and running a new

business, which is often initially a small business. The people who create these
businesses are called entrepreneurs.

Entrepreneurship has been described as the "capacity and willingness to

develop, organize and manage a business venture along with any of its risks to
make a profit". While definitions of entrepreneurship typically focus on the
launching and running of businesses, due to the high risks involved in launching
a start-up, a significant proportion of start-up businesses have to close due to
"lack of funding, bad business decisions, an economic crisis, lack of market
demand-or a combination of all of these.

A broader definition of the term is sometimes used, especially in the field of

economics. In this usage, an Entrepreneur is an entity that can find and act upon
opportunities to translate inventions or technology into new products: "The
entrepreneur can recognize the commercial potential of the invention and
organize the capital, talent, and other resources that turn an invention into a

commercially viable innovation." In this sense, the term "Entrepreneurship" also

captures innovative activities on the part of established firms, in addition to
similar activities on the part of new businesses.

Entrepreneurship is the act of being an entrepreneur, or "the owner or manager

of a business enterprise who, by risk and initiative, attempts to make profits".
Entrepreneurs act as managers and oversee the launch and growth of an
enterprise. Entrepreneurship is the process by which either an individual or a
team identifies a business opportunity and acquires and deploys the necessary
resources required for its exploitation. Early-19th-century French economist
Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it
"shifts economic resources of an area of lower and into an area of higher
productivity and greater yield". Entrepreneurs create something new, something
different they change or transmute values. Regardless of the firm size, big or
small, they can partake in entrepreneurship opportunities. The opportunity to
become an entrepreneur requires four criteria. First, there must be opportunities
or situations to recombine resources to generate profit. Second,
entrepreneurship requires differences between people, such as preferential
access to certain individuals or the ability to recognize information about
opportunities. Third, taking on risks is necessary. Fourth, the entrepreneurial
process requires the organization of people and resources.

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 18th
centuries. However, entrepreneurship was largely ignored theoretically until the
late 19th and early 20th centuries and empirically until a profound resurgence in
business and economics in 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 Menger, 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 private
windows supposition that entrepreneurship leads to economic growth is an
interpretation of 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.Objectives
2.1 Objectives:
(A) Meaning:
 A research objective is a clear, concise, declarative statement, which
provided 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 through 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. LITERATURE REVIEW

3.1 The Imperfect Education System and Conservative Lifestyle:

The education system is one of the hindrances for start-ups. In college, students
are usually trained with advanced techniques but lack the marketing, sales, and
operational ability and leadership skills needed to advance their enterprises. In
Addition, a conservative lifestyle also contributes as one of the obstacles. As the
culture of the family remains, the family remains skeptical to change and
prefers options that can provide a steady income rather than engaging in risk.
This places pressure on the budding entrepreneur who falls victim to the
dichotomy of providing for the family instead of following some “whimsical”
dream (Au & Kwan, 2009).

3.2 Lack of Support Networks and Entrepreneurship Ecosystem:

One of the major challenges is that there is a severe shortage of start-up support
networks and entrepreneurship ecosystems. In many western countries, there are
special institutions that serve as incubators, start-up accelerators, and start
competitions for entrepreneurs to put their ideas to the 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 is 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 a platform that links investors and
entrepreneurs so that entrepreneurs can obtain the necessary funding to test out
their ideas. The lack of these facilities makes it more difficult for entrepreneurs
to find investors. In return, investors are more difficult to find entrepreneurs as
well. Even if entrepreneurs can find investors, they will face an entirely
different set of challenges. Indian culture inherently does not promote
entrepreneurship. Conversely, it encourages stability, and employment at large
state-owned or private organizations, and above all, teaches people to be risk
averse. Even if young Indian individuals have the intention to start their
business, their family usually places a considerable amount of negative pressure
on them to forget entrepreneurship and look for a “stable job” instead.

3.3 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 said
India rank ranks third in global start-up ecosystems, with more than 4,200 new-
age companies. Tandon said, “The case is very different in countries like the
US. People are just waiting to invest in good companies. We should also have
something like that.” Mainly, investors (in India) are afraid because there is a
high risk of failure in these investments and also there is a lack of policy on
such investments,” he added. “Why will investors put money in such
companies? They need tax benefits and several 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 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 who 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’
is. They are the aspiration,” he Ratan Tata has invested in umbseverales
including Ola, Snapdeal, Paytm, Urban Ladder, and Bluesto ne. Wipro boss
Azim Premji has funded compass such as Myntra magi, among others, through
his investment arm Premji Invest.

3.4 Human Talent:

Compared to large mature enterprises, small start-ups are in an exponentially

more dilemma and encounter many severe challenges in recruiting due to the
reason that they cannot pay high salaries to their 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 cultural differences. It is a disaster
for a company that needs to execute its business plan with minimal errors to just
survive the month.

3.5 Women Entrepreneurs:

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 Balasubramaniam identified the important women’s
entrepreneurial motivation factors and their impact on entrepreneurial success.
The study identified ambition, skills and knowledge, family support, market
opportunities, independence, government subsidy, and satisfaction are the
important entrepreneurial motivation factors. The study also concluded that
ambition, knowledge, and skill independence dimensions of entrepreneurial
motivation s have a significant impact on entrepreneurial success.

Jalbert, (2000) performed a study to explore the role of women entrepreneurs in

a global economy. It all exam men’s business associations can strengthen
women‘s position in business and international trade. The analysis is performed
based on facts and data collected through fieldwork (surveys, focus groups, and
interviews) and mining published research. The study has shown that t
women Bess 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 searches done on entrepreneurship including women
entrepreneurship. Its summaries various studies in this way that female
entrepreneurs are relatively well educated in general but perhaps n I
management, 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 firstborn or only children, unlikely to start a business in traditionally male-
dominated industries & experiencing a need of diction managerial training.
Singh, (2008), identifies the ores influencing factors behind the entry of wonton
in entrepreneurship. He explained the characteristics of businesses and the
Indian co country’s obstacles & challenges. He mentioned the obstacles in the
growth of women’s entrepreneurship are mainly lack of interaction with
successful entrepreneurs, social unacceptance as women entrepreneurs, family
responsibility, gender di imagination, missing networks, and low pried priority
given by bankers to provide loans to women entrepreneurs. He suggested
remedial measures like promoting-mic micro-enterprises looking at institutional
framework, projecting & pulling to grow & support the winners, etc. The study
advocates for women in the rated ministry & social & welfare development
ministry of the Government of India.
4. RESEARCH
METHODOLOGY
 4.1 Data Collection Method:

The data collected in this research project is based on secondary data.

The facts and figures are taken from different resources.

(A) Meaning:

Secondary data means data that are already available i.e., they refer to the
data which have already been collected and analyzed by someone else.
When there searcher utilizes 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 organizations;
(c) technical and trade journals;
(d) books, magazines and newspapers;
(e) reports and publications of various associations connected with
business and industry, banks, stock exchanges, etc.;
(f) reports prepared by research scholars, universities, economists, etc. In
different fields; and
(g) public records and statistics, historical documents, and other sources
of published information. The sources of unpublished data are many; they
may be found in diaries, letters, unpublished biographies and
autobiographies and also may be available with scholars and research
workers, trade associations, labour bureausand 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). A clear benefit of using secondary data is that much of
the background work needed has already been carried out, such as literature
reviews or case studies. The data may have been used in published texts and
statistics

Elsewhere, and the data could already be promoted in the media or bring in
useful personal contacts. Secondary data generally have a pre-established
degree of validity and reliability which need not bere- examined by the
researcher who is re-using such data.

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

Administrative data, which is not originally collected for research, may not be
available in the usual research formats or may be difficult to get access to.

4.2 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 entrepreneur. 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, NainaLal
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 in the area of women entrepreneurship in gender-focused
global entrepreneurship survey, released in July 2013 by PC maker Dell and
Washington based consulting firm Global Entrepreneurship and Development
Institute (GEDI). Of the 17 countries surveyed India ranks 16th, just above
Uganda. Countries like Turkey, Morocco and Egypt has out performed India.
Status of higher education in women in India came out to be lower than most
countries in the world. At present, women entrepreneurial role is limited in the
large-scale industries and technology-based businesses. But even in small scale
industries, the women’s participation is very low. As per the third all-India
census of Small-Scale Industries, only 10.11%of the micro and small enterprises
were owned by women, and only 9.46% of them were managed by women.
While the number of women operating their own business is increasing
globally, women continue to face huge obstacles that stuntthe 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 line of
business. The entry of women into business in India is traced out as an
extension of their kitchen activities, mainly 3P’s, Pickle, Powder and Pappas.
But with the spread of education and passage of time women started shifting
from 3E’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 me ether 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 or the corporate glass ceiling,
the health of a family member, or economic reasons such as a lay off. 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
Ahala Mandal’s and the Community Development Programs were a few steps
in this direction.

In the second Five-Year Plan (1956-61), the empowerment of women was

closely linked with the overall approach of intensive agricultural development
programs.

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

The Fifth Five-Year Plan (1974-79) emphasized training of women, who 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 alleviated poverty. 30-40% reservation is Provided to
women under these schemes. Steps taken by Government during Ninth
Five-Year Plan: Economic development and growth are 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 Government

to provide assistance to women entrepreneurs

c) Swarna Jayanti Gram Swarozgar Yojana and Swarna Jayanti Sekhari

Rozgar Yojana were introduced by 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 Udyan Nidhi

ii. Micro Cordite Scheme for Women

iii. Mahila Vikas Nidhi

iv. Women Entrepreneurial Development Programmes

v. Marketing Development fund for Women

 PERFORMANCE OF WOMEN ENTREPRENEURSHIP IN INDIA
STATES No. OF UNIT’S NO. OF WOMEN % OF WOMEN
REGISTERED ENTREPRENEURS ENTREPRENEURS
Tamil Nadu 9618 2930 30.46

Uttar Pradesh 7980 3180 39.84

Kerala 5487 2135 38.91
Punjab 4791 1618 33.77
Maharashtra 4339 1394 32.12
Gujarat 3872 1538 39.72
Karnataka 3822 1026 26.84
Madhya Pradesh 2967 842 28.38
Other States & 14576 4185 28.71
UTS

Total 57452 18848 32.80

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

KamilaTyabji. WIT centre at Panvel, 40kms, from Mumbai. The Kamila trust
UK was setup 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

4.3 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

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 start-ups 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 start-up ecosystem in India has a dearth of talent due to issues like brain
drain. Due to the competition among start-ups, 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 start-
ups do, they fail to provide abetter product, which eventually leads to a start-
up’s demise.

Limited Access to Funding:

Entrepreneurs have to fight hard to get funding for their start-ups 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 start-ups 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 start-up’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 start-up’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 how’s 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.

4.4 TO HIGHLIGHT THE IMPORTANTANCE OF FINANCING

AGENCY’S IN INDIA :

A start-up is a reflection of an out of the box idea which is put into execution
for the generation of revenues through the sale of products and services that are
unique and fills the gap of the consumer needs that are in the market. India is
fifth in the world in the aspect of the start-ups with 3100 start-ups functioning
since the last 3-4years. 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 than94% 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 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 partner 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. Layout
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
banker 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 tart 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 lower quietens. 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 time line 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
aninitial 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 youand 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
2014-15which 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.

(F) High Net-Individuals:

Lastly, our final source of funding is the High Net-worth individuals who are
individuals with example 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 accustom investment based on the funds you need which give you an
edge. Lastly, the high net-worth individuals charge you lower fees.

G)Bank Loans:

This might probably be the first option when you have an idea of your own
start-up. Banks offer loans to the entrepreneurs who are eligible and capable of
carrying out a sustainable and stable business project. For the sanction of the
loan, the bank takes into consideration the business model, the valuation of
various inventories and the project report along with other documentation. 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 its 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.

4.5 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, beside 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 un certain 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, zerox 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 break through 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 impossible that entrepreneurs in developing countries
may not be pioneering/innovative in introducing path breaking, radical
innovations. They may be the first or second adopters of technologies developed
elsewhere. That does not make their achievement small. For imitating
technologies from developed world to the indigenous setting is quite
challenging. A lady entrepreneur wanting to introduce thermal pads for
industrial heating faced tremendous reluctance form the owners of chemical and
sugar mills despite the established superiority of her products over the
conventional heating of the vessels by burning of wood/coke or using LPG.
Moreover, there is no need to suffer from “it was not invented here” complex-
there is no need to reinvent the wheel. The global electronics major, Sony did
not invent the transistor! It used the transistor to build entertainment products
that are world leaders.

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 Apperceived 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 aswell 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 he product.
Besides, entrepreneur may be required to develop even the sources ofsupply 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, land owner gets the contracted rent, capital providers gets the
contracted interest, and the work force 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

 The objectives of a research project summarise what is to be achieved b

 The objectives of a research project summarise what is to be a
 The objectives of a research project summarise what is to be achieved