entrepreneurship.
Entrepreneurship is the process of identifying opportunities, organizing resources, and assuming
the risk of creating and running a business to offer innovative products or services. It involves
initiative, innovation, and risk-taking to generate economic value.
different types of entrepreneurship.
Innovative entrepreneurship: Focuses on innovation and new ideas.
Imitative entrepreneurship: Adopts and modifies existing models.
Fabian entrepreneurship: Very cautious and skeptical about changes.
Drone entrepreneurship: Resistant to change even if they suffer losses.
entrepreneurial ideas.
Personal experiences and hobbies
Market gaps or unmet needs
Academic and industrial research
Feedback from customers
Brainstorming or ideation sessions
Franchises and industry reports
Government policies for promoting SSIs
MSME Development Act
Credit Guarantee Fund
Mudra Loans
Start-up India
SIDBI support
Need for streamlined implementation, awareness campaigns, and timely disbursement.
project appraisal.
Project appraisal is a detailed assessment of the viability of a project based on its financial,
technical, economic, social, and legal aspects. It helps investors and managers decide whether to
proceed with the project.
Small Scale Industry (SSI).
SSI refers to industries with limited investment and scale. According to MSME definitions in
India, a business is classified as an SSI if its investment in plant and machinery does not exceed
₹1 crore and turnover is below ₹5 crore.
Role of innovation in entrepreneurship
Innovation helps entrepreneurs offer unique products or services, improve existing offerings,
reduce costs, and gain competitive advantages. For example, Ola and Uber revolutionized
transportation through app-based ride-sharing models.
entrepreneurial success
Vision and planning
Access to capital
Market understanding
Team and human resource management
Customer focus
Adaptability and resilience
Government policies and infrastructure
Difference between invention and entrepreneurial idea
Invention: Creation of a new product or process (e.g., electric car engine).
Entrepreneurial idea: Applying that invention in the market (e.g., launching Tesla to
sell electric cars).
An invention becomes valuable only when transformed into a profitable business idea.
Components of a project feasibility study
Technical feasibility: Technology, processes, location, materials
Market feasibility: Demand-supply analysis, target market, competition
Financial feasibility: Cost estimates, funding, revenue projections
Legal feasibility: Regulatory compliance and licensing
Operational feasibility: Human resources, workflow, supply chain
Difference between financial and economic appraisal
Financial appraisal focuses on profitability, payback period, ROI, NPV, and cash flows
for the firm.
Economic appraisal assesses broader societal impacts like employment generation,
regional development, and environmental effects.
Risks and rewards in launching a new venture
Risks:
Financial loss
Business failure
Market uncertainty
Legal liabilities
Rewards:
Profit and wealth creation
Independence and self-employment
Innovation and impact on society
Recognition and legacy
Ethical implications of entrepreneurial decisions
For example, a firm choosing to pay workers minimum wage despite high profits might face
ethical scrutiny. Ethical entrepreneurship includes transparency, fair labor practices, and
sustainability. Long-term success is tied to ethics.
Entrepreneurial ideas for solving social issues
Low-cost sanitary napkins (e.g., Arunachalam Muruganantham model)
Affordable online education platforms
Biodegradable packaging alternatives
Rural solar electrification startups
Skill training centers for rural youth
Need for special financial support to SSIs
SSIs are vulnerable during downturns due to limited cash flow. Government-backed credit
guarantees, subsidies, and interest waivers can ensure continuity, protect jobs, and stabilize the
economy.
Contribution of SSIs to employment generation
SSIs use labor-intensive processes, provide jobs in rural and semi-urban areas, encourage self-
employment, and reduce urban migration. They are key in inclusive growth and GDP
contribution.
Steps in starting a new venture
1. Opportunity recognition
2. Market research
3. Business plan development
4. Fundraising
5. Legal registration
6. Business launch and marketing
. Traits of a viable entrepreneurial idea
Solves a real problem
Scalable and profitable
Matches entrepreneur's skills and resources
Sustainable and innovative
Meets market demand
Key financial metrics in project appraisal
Net Present Value (NPV)
Internal Rate of Return (IRR)
Payback Period
Return on Investment (ROI)
Importance of project appraisal
It enables sound investment decisions by analyzing technical feasibility, market potential,
financial returns, and risks. Helps minimize losses and ensures efficient resource allocation.
Classification criteria for SSI in India
Investment in plant & machinery ≤ ₹1 crore
Annual turnover ≤ ₹5 crore
(As per latest MSME guidelines, these may change slightly.)
Entrepreneur vs Manager
Entrepreneur Manager
Creates business Manages existing business
Takes risk Minimizes risk
Focuses on innovation Focuses on execution
Owns the venture Employee of organization
Opportunity recognition with example
Identifying gaps in the market and solving them.
Example: Zomato saw the lack of restaurant discovery and food delivery platforms and
capitalized on it.
. Ownership structures
Sole Proprietorship: One owner, full control
Partnership: Two or more partners, shared profit/loss
LLP: Limited liability, operational flexibility
Private/Public Ltd.: Separate legal entity, more regulation, capital from shareholders
How trends influence business ideas
Trends like health consciousness, sustainability, digital transformation create new demands. E.g.,
increased demand for plant-based foods led to startups like Beyond Meat.
Impact of globalization on SSIs
Pros: access to global markets, technology, knowledge
Cons: competition from MNCs, pricing pressure, quality benchmarks
Requires innovation and government support for survival.
Economic trends and entrepreneurial opportunities
During inflation, demand may fall. In recession, frugal and need-based innovations thrive.
Digital trends post-COVID created opportunities in ed-tech, health-tech, and e-commerce.
Critique of idea generation sources
Social Media: Trend-driven, user-based insights, but lacks depth
Hackathons: Foster innovation, real-time collaboration, but may lack practicality
Combining both provides dynamic and validated ideas.
. SSIs vs Medium/Large enterprises
Criteria SSI Medium/Large
Investment ≤ ₹1 crore > ₹1 crore
Scale Local/Small National/Global
Employment 10–50 workers Hundreds to thousands
Infrastructure Basic Advanced & automated
