CHAPTER1

What is Entrepreneurship?: An entrepreneur is an individual who owns a firm, bu

siness, or venture, and is responsible for its development. Entrepreneurship is
the practice of starting a new business or reviving an existing business, in ord
er to capitalize on new found opportunities.
Generally, entrepreneurship is a tough proposition as a good number of the new b
usinesses fail to take off. Entrepreneurial activities differ based on the type
of business they are involved in. It is also true that entrepreneurial ventures
create a number of new job opportunities. A large number of entrepreneurial proj
ects look for venture capital or angel funding for their startup firms in order
to finance their capital requirements. Besides, government agencies and some NGO
s also finance entrepreneurial ventures.
Entrepreneurship is often associated with uncertainty, particularly when it invo
lves creating something new for which there is no existing market. Even if there
is a market, it may not translate into a huge business opportunity for the entr
epreneur. A major aspect in entrepreneurship is that entrepreneurs embrace oppor
tunities irrespective of the resources they have access to.
A number of entrepreneurs are of the opinion that managing their own business of
fers far greater security than being an employee elsewhere. They feel entreprene
urship enables them to acquire wealth quickly and cushion themselves against fin
ancial insecurity. Additionally, an entrepreneur’s future is not at peril owing to
the faulty decisions of a finicky employer. So, while some people feel that bei
ng employed is less risky, entrepreneurs feel that they are better off starting
a business of their own.
Today, there is the increasing awareness about entrepreneurship. People aren’t con
fining themselves to one business. They are following one business with another.
Such entrepreneurs are referred to as “serial entrepreneurs.” Sometimes these entre
preneurs become angel investors and invest their money in startup companies. As
a person gains greater insight into business and entrepreneurship, his chances o
f succeeding in business improve.
Qualities of entrepreneur
Being an entrepreneur is about more than just starting a business or two, it is
about having attitude and the drive to succeed in business. All successful Entre
preneurs have a similar way of thinking and posses several key personal qualitie
s that make them so successful in business. Successful entrepreneurs like the am
bitious Richard Branson have an inner drive to succeed and grow their business,
rather than having a Harvard Business degree or technical knowledge in a particu
lar field.
All successful entrepreneurs have the following qualities:
Inner Drive to Succeed
Entrepreneurs are driven to succeed and expand their business. They see the bigg
er picture and are often very ambitious. Entrepreneurs set massive goals for the
mselves and stay committed to achieving them regardless of the obstacles that ge
t in the way.
Strong Belief in themselves
Successful entrepreneurs have a healthy opinion of themselves and often have a s
trong and assertive personality. They are focused and determined to achieve thei
r goals and believe completely in their ability to achieve them. Their self opti
mism can often been seen by others as flamboyance or arrogance but entrepreneurs
are just too focused to spend too much time thinking about un-constructive crit
icism.
Search for New Ideas and Innovation
All entrepreneurs have a passionate desire to do things better and to improve th
eir products or service. They are constantly looking for ways to improve. They r
e creative, innovative and resourceful.
 Openness to Change
If something is not working for them they simply change. Entrepreneurs know the
importance of keeping on top of their industry and the only way to being number
one is to evolve and change with the times. They re up to date with the latest t
echnology or service techniques and are always ready to change if they see a new
opportunity arise.
Competitive by Nature
Successful entrepreneurs thrive on competition. The only way to reach their goal
s and live up to their self imposed high standards is to compete with other succ
essful businesses.
Highly Motivated and Energetic
Entrepreneurs are always on the move, full of energy and highly motivated. They
are driven to succeed and have an abundance of self motivation. The high standar
ds and ambition of many entrepreneurs demand that they have to be motivated!
Accepting of Constructive Criticism and Rejection
Innovative entrepreneurs are often at the forefront of their industry so they he
ar the words "it can t be done" quite a bit. They readjust their path if the cri
ticism is constructive and useful to their overall plan, otherwise they will sim
ply disregard the comments as pessimism. Also, the best entrepreneurs know that
rejection and obstacles are a part of any leading business and they deal with th
em appropriately.
True entrepreneurs are resourceful, passionate and driven to succeed and improve
. They re pioneers and are comfortable fighting on the frontline The great ones
are ready to be laughed at and criticized in the beginning because they can see
their path ahead and are too busy working towards their dream.
CHAPTER2
Gender basis & women entrepreneurship
Why Women Become Entrepreneurs
Women often leave the corporate world to become entrepreneurs, by starting their
own businesses, to provide additional flexibility and life balance in managing
their traditional responsibilities as wife and primary caretaker of children. T
he primary concern for many women is the combined responsibility of work and fam
ily (Buttner and Moore, 1997). Helms explains that women often start their own
business for “three types of personal gains: personal freedom, security, and/or s
atisfaction” (Helms, 1997). She describes “freedom seekers” as those who are dissatis
fied with their employment due to pay inequities or discrimination and desire th
e freedom to choose their preferred type of work (i.e. hours of work, environmen
t, and people they work with). The work flexibility provided by entrepreneurshi
p is appealing for women in terms of location, often working at home or close to
home, and the hours of work. “Security seekers” are those who have been prompted t
o become an entrepreneur due to some personal misfortune, such as layoff, downsi
zing, divorce, death or retirement of their spouse. These “security seekers” start
a business to improve or maintain their family social or economic status. The “sa
tisfaction seekers” are housewives who do not have any previous work skills or exp
erience but want to prove to others or themselves that they can be productive an
d useful in society (Helms, 1997).
In examining different theories and the reasons why women become entrepreneurs,
I would argue that there is no set and standard profile that can be predictably
applied. For every woman who is an entrepreneur or wants to become one, they ea
ch have their own set of reasons, motivation, and many cannot be categorized or ‘l
abeled’. I believe that the general profile of women entrepreneurs is similar to
their male counterparts as they all are generally innovative, risk takers, auton
omous, independent, have a high tolerance for ambiguity and possess an internal
locus of control. Although some researchers classify the differences between me
n and women due to their desires, underlying reasons why they wanted to become e
ntrepreneurs, and family duties, they still possess the same personality/profile
that is required of any entrepreneur regardless of their gender.
Female and Male Differences
Helm argues in her paper that men and women have different reasons for entering
business and that women have “internal-stable reasons (“I want to be my own boss”), wh
ile men have external-stable reasons (“I saw a terrific market opportunity”) (Helm,
1997, p. 17). In contrast, Weiler and Bernasek state the reasons as a more pref
erable alternative then working in a discriminatory labour market or corporation
and that self-fulfillment (rather than profits) is the most significant measure
of success for women entrepreneurs. Similar to Weiler and Bernasek’s theory, But
tner and Moore argue that women become entrepreneurs due to the blocks in career
advancement as a result of gender discrimination resulting in the popular term “g
lass-ceiling effect” (women cannot access the highest levels in an organization or
corporation due to their gender). This is not a barrier that men face, but I w
ould argue that this type of discrimination can actually strengthen a women’s dete
rmination to succeed.
In comparing the management styles of women and men entrepreneurs, Bruni, Gherar
di and Poggio explain that women display distinctive features and abilities, “tran
sformational leadership”. This type of leadership/management style encourages pos
itive interactions and trust-based relationships with subordinates with whom the
y also share power and information. Gundry, Ben-Yoseph and Posig describe this
as the “relational” practices engaged by women entrepreneurs. This would include co
llaborative, decentralized decision-making and an empowered team atmosphere. Th
eir management style emphasizes open communication and “their business goals refle
ct a concern for the communities in which their businesses resided” (Gundry, Ben-Y
oseph and Posig, 2002, p. 72). In contrast to other researchers, Gundry, Ben-Yo
seph and Posig stated that women in non-traditional industries value money both
as a motivator and the preferred outcome. Yet, Buttner and Moore’s research findi
ngs indicate that women’s important goals are for professional growth, development
, challenge, and self-fulfillment, while men’s are preferred higher income.
Barriers against female entrepreneurship:
1. Capital Finance

There are many barriers for women entrepreneurs when facing the prospects of sta
rting a new business. Research finds the primary barrier is the access to capit
al finance. “Lack of access to capital has been a primary obstacle for women entr
epreneurs
2. Lack of Networks
As mentioned earlier, another prominent barrier that women entrepreneurs face is
the lack of networks of information, assistance, and mentors:
Networks, which generally are touted as providing valuable information conduits
to efficient markets, may once again be at the source of women’s difficulties, as
their firms may find themselves struggling against an established male-dominated
system of customers, suppliers, and creditors.
Social entrepreneur
Social entrepreneurs are individuals with innovative solutions to society’s most p
ressing social problems. They are ambitious and persistent, tackling major socia
l issues and offering new ideas for wide-scale change.
Rather than leaving societal needs to the government or business sectors, social
entrepreneurs find what is not working and solve the problem by changing the sy
stem, spreading the solution, and persuading entire societies to take new leaps.
Social entrepreneurs often seem to be possessed by their ideas, committing their
 lives to changing the direction of their field. They are both visionaries and u
ltimate realists, concerned with the practical implementation of their vision ab
ove all else.
Each social entrepreneur presents ideas that are user-friendly, understandable,
ethical, and engage widespread support in order to maximize the number of local
people that will stand up, seize their idea, and implement with it. In other wor
ds, every leading social entrepreneur is a mass recruiter of local changemakers—a
role model proving that citizens who channel their passion into action can do al
most anything.
Over the past two decades, the citizen sector has discovered what the business s
ector learned long ago: There is nothing as powerful as a new idea in the hands
of a first-class entrepreneur.
Why "Social" Entrepreneur?
Just as entrepreneurs change the face of business, social entrepreneurs act as t
he change agents for society, seizing opportunities others miss and improving sy
stems, inventing new approaches, and creating solutions to change society for th
e better. While a business entrepreneur might create entirely new industries, a
social entrepreneur comes up with new solutions to social problems and then impl
ements them on a large scale.
Sustainable Entrepreneurship
Sustainable entrepreneurship is a spin-off concept from sustainable development
that can be defined as the continuing commitment by business to behave ethically
and contribute to economic development while improving the quality of life of t
he workforce, their families, local communities, the society and the world at la
rge as well as future generations. Sustainable entrepreneurship is an approach t
hat is applied mostly by large, often industrial companies. In their wake, a who
le range of sustainability certificates came about. Because of the proliferation
of complex and costly procedures to obtain them, Small and Medium size Enterpri
ses (SMEs) have almost unanimously ignored and repudiated the idea of sustainabl
e entrepreneurship.
Technoprenuers
A technoprenuer is an entrepreneur who is technology savvy, creative, innovative
, dynamic, dares to be different and take the unexplored path, and very passiona
te about their work. They take challenges and strive to lead their life with gre
ater success. They don t fear to fail. They take failure as a learning experienc
e, a stimulator to look things differently and stride for next challenge. Techno
prenuers continuously go through an organic process of continual improvement and
always try to redefine the dynamic digital economy.
Technology and entrepreneurial skills are driving many economies to prosperity.
The most famous of them all is, Bill Gates, who makes Microsoft a household name
all over the world. Steve Jobs - well known for his innovations. iPod - most ca
rried gadget by young population. Look at the success of Google - brain child of
Sergey Brin and Larry Page. Who don t know Google?
Technopreneurship is not a product but a process of synthesis in engineering the
future of a person, an organization, a nation and the world. In a digital, know
ledge based society, strategic directions or decision-making processes will be d
emanding and complex. This requires tertiary level and professional development
programs and training to produce strategic thinkers who will have the skills to
succeed in a dynamically changing global environment. Traditional educational pr
ograms, however, lack the methodology to transform today s students into creativ
e, innovative, visionary global leaders who understand the importance of technop
reneurship.
CHAPTER3
Manager vs. entrepreneur: Major personal differences
There is a huge difference between a "Manager and an Entrepreneur." While they b
oth hold some similarities, i.e., have to be a driven person, with the goal in s
ight at all times. Also, their interaction with other people is generally in a m
ore firm tone, when directing insight into a particular project or idea.
Managers, for the most part manages other personnel within a company structure.
This can range from a supervisor on the flour in a factory setting, and/or the i
ndividual that is in charge of the payroll up in the front office. All these peo
ple have a great deal of responsibility and manage other people in their normal
daily work schedule. It can range from entry level management, all the way to wh
at is known as senior level management. Consisting of people, who hold the title
s of President, CFO, Chairman, etc.
The one common element to all this above mentioned structure is that they all re
port to someone else within the company. Including the President of the company,
he still has to report to the board, or to the Chairman of the board. Either wa
y all these people still have to report to another person at some point in the a
verage work day.
This is the main difference between a "Manager and an Entrepreneur," the mere fa
ct that managers work on someone else schedule, or a set schedule from the compa
ny in which you work. Entrepreneurs for the most part work on their own time sch
edule. Depending on what the current project at hand may be, will dictate what t
he coming schedule will be like for the duration of the project. If you are a mo
re free spirited type of person, this lifestyle will undoubtedly be more appeali
ng than the normal work week of nine to five.
Being an Entrepreneur is something that has to be constantly worked at, in order
to maintain a healthy financial lifestyle. Generally this type of person has so
mething to bring to the "proverbial" table that will make actually being an Entr
epreneur a doable venture. Whether your interest lay in land acquisitions, or in
vestments of some sort, or being an adventure seeking person and making a living
out of writing articles on different projects. This choice for making a living,
definitely gives the individual more time to live life in a more free manner, w
ithout the norm of set appointments daily. Hence, not waking to a supervisor eve
ry day, just your own sweet self reflecting back in the mirror.
Intrapreneur
When a company’s growth begins to dwindle, boardroom meetings grow strained and th
e finger pointing starts. Executives cry out, "We need a new strategy! We need t
o hire better people! Our culture is to blame! Our compensation is wrong!" The f
ounder, if he or she is still around, sadly states, "We have more people, resour
ces, and money than ever. But now we are so big we can’t even get out of our own w
ay!" Embarrassed, a politically perceptive staffer serves up a popular buzzword.
"Intrapreneurs! What we need are Intrapreneurs!" The "hip" executive explains t
hat Intrapreneurs are "Inside Entrepreneurs" who will follow their founder’s examp
le. The Intrapreneur, he or she promises, will buck the corporate malaise, risk
his or her career to get things done and, is willing to "do the right thing to s
erve the customer". As everyone looks around the room for this potential savior
of growth, what do they see? Executives’ eyes around the table react in three diff
erent ways:
1. Most managers’ eyes look down hoping this latest idea dies before making t
hem change or take chances.
2. The owner’s eyes look up and out the window reminiscing about the "good ol
d days" when he or she ran a much smaller and focused company. Back then, everyo
ne was an Intrapreneur with "fire in their bellies".
3. One or maybe two sets of younger, brighter eyes sparkle, expressing hope
that their time has come to break suffocating company rules and politics stifli
ng opportunities they see but cannot pursue. Optimistically, but sometimes fatal
ly, these people seize the moment and volunteer as "champions" of this new compa
ny initiative.
What happens? Management chooses an Intrapreneur hoping that this "champion" is
victorious. If successful, will this person become the company’s leader? On the ot
her hand, will he or she leave and become an Entrepreneur? Too often, the buddin
g Intrapreneur is "beaten" into submission by, and is "forced" to rejoin the fir
st group.
Despite their righteousness, why don’t more Intrapreneurs succeed? Because in doin
g what is right, Intrapreneurs hold a mirror up to their peers, forcing them to
confront what they and their company have become. Just like a middle-aged, weeke
nd warrior exercising after years of complacence, when a staid company tries to
perform like a growth business, the picture is not very pretty.
When You Are The Intrapreneur, What Should You Do? Should You Take The Challenge
?
If you, the Intrapreneur, are offered such a firm-changing opportunity, consider
this. You may have the chance to take your career to new heights by helping to
drive the future of your company. Whether you are asked to develop a product, se
rvice, channel, or application, will you make your mark or seal your fate? Shoul
d you:
1. Seize the moment?
2. Pass on the opportunity or, leave to become an entrepreneur?
CHAPTER4
INDIAN FAMILY BUSINESS
Family businesses constitute most businesses in India, as anywhere else. Economi
c liberalisation and rapid expansion in the industrial base in recent years have
not only created growth opportunities for many but also have tested their resou
rce capabilities to respond to them; some have chosen to follow the role of a cu
stodian of their existing wealth and followed the preservation route, while some
others have followed more of an entrepreneurial route of exploiting opportuniti
es with or without relevant resources, with mixed results. One of the key resour
ces for all of them is their family, and their prime concern is wealth and welfa
re of their family. A major dilemma many of them have faced particularly in the
last decade since economic liberalization began is to choose between combination
s of risks and returns of business growth and conservation of wealth of the fami
ly. This, of course, is intertwined with the missions of their businesses and fa
milies.
Family as a social institution is one of the oldest surviving (Goode, 1982), but
only in recent years family business, an important arm of it started receiving
academic attention. After a detailed review of the existing literature, Zahra an
d Sharma (2004) concluded that family business research has a long way to go fro
m the present fragmented and descriptive state. There are conceptual differences
between family and business (Ward 1987, 2004), though opinions on treating them
as conflicting systems vary. Family businesses are found to split up like amoeb
a as they grow, and very few of them survive beyond three generations, supportin
g the age old saying, “shirt sleeve to shirt sleeve in three generations” (Carlock a
nd Ward 2001, McCulloch 2004).
Most discussions in this area are based on research in advanced countries. In mo
st developing countries, including India, it still remains a black box; academic
s and industry observers were puzzled to witness the recent break up in the seco
nd generation of the Ambani family, the largest private sector group worth over
US $ 20 billion. Even anecdotal evidence is limited to a few biographical sketch
es (Tripathi, 2004; Piramal, 1998) and consultant impressions (Dutta 1997; Sampa
th 2001). Sharma and Manikutty’s (2005) study of diversified family groups is one
of the few notable research pieces from India in this area. In essence, not much
is known either about the survival rate or the factors contributing to the succ
essful survival of family businesses in India. Taking the survival bar as three
generations, it will be interesting and instructive to know how family businesse
s perform in the fourth generation. Since the implicit assumption here is that t
he family has survived as a single entity, it is important to know how the famil
y’s involvement in business is and also how the family and outside professionals m
anage the business.
Relevance of success of family business
For historical, evolutionary reasons, most countries have family businesses cons
tituting the largest category in terms of ownership; estimates do vary, but is a
bove 75 percent in all cases (Duman 1992, Paisner 1999; Watts and Tucker 2004).
About a third of the companies listed in Fortune 500 are family businesses (Lee
2004). Since they normally do not have short term orientation but are interested
in growing the family wealth with necessary precautions and have a different se
t of strategic goals compared to non-family owned private companies (Ward, 1987;
Sharma, Chrisman and Chua, 1997), their long term contribution to economy is si
gnificant. This is true with the Indian economy too.
However, long term sustenance of family business depends on its smooth survival
across generations as shown in Figure 1. Families that successfully survive thre
e or four generations have a complex web of structures, agreements, councils and
forms of accountability to manage their wealth (Jaffe and Lane 2004). This seem
s to be much more evident in the west compared to emerging economies such as Ind
ia. Reflecting the complexity of the process involved, succession planning has b
een an area of keen interest for researchers. This could be for a variety of rea
sons. One, organizational transition from an entrepreneurial stage to a system d
riven, professionally managed firm is not easy (Churchill, 1983), and involves e
volutions, revolutions and crisies (Greiner, 1998). Two, there is often a simult
aneous process of transformation taking place in the family and business with th
e size of activities of both growing (Kepner 1991; Morris et al 1997; Sharma, Ch
risman and Chua 2003)
There are also challenges of multiple stakeholders for the leadership position (
Lansberg,1999). Very often, there is lack of communication between the incumbent
and incoming generations. The incumbents do not know how to handle the successi
on challenge, while the incoming generation does not know how to raise it. Studi
es in the American context
showed that families choose their most competent member(s) to manage the busines
s, disregarding age, gender or bloodline (Chrisman, Chua and Sharma, 1998). This
is a reflection of the family’s willingness to separate family hierarchy from org
anizational hierarchy. Given the level of socio-economic and cultural contexts p
revailing, it is difficult to be true in the Orient including India. However, po
st-succession role of the incumbent is not often planned leading to complication
s. This could lead to what is often described as “return of the father in 18 month
s” into the business reflecting the retiring persons return to take charge of the
business again. Hence, there is a need for determining the possible role of the
incumbent as a mentor or non-executive chairperson.
It is also possible for the person to pursue a totally different profession such
as teaching! Retirement related planning is increasingly becoming important wit
h growing longevity of people.
Although ownership and management succession are the key concerns of a large num
ber of business families, they do not devote enough attention to the process inv
olved. Studies (Watts and Yucker, 2004) have reported that families hesitate to
address this issue.
Succession dilemma is also closely related to the family policy on entry of new
generation, retirement of incumbents and mechanisms for resolving conflicts. A n
umber of case studies on family business taught in leading business schools have
brought out the critical role of open communication within the family in develo
ping and sustaining harmony and growth. Entry of new members from the family dep
ends also on the ‘space’ available in the organization, which in turn depends on the
success of the business. While management literature on strategy is rich on vis
ion, not much has been known about the need for synergizing values and vision of
family and business on an ongoing basis. This is particularly so in a dynamic e
nvironment. Family business authors (eg. Carlock and Ward, 2001) have developed
approaches to strategy making in business and family. As discussed by Paisner (1
999), developing a sustainable mechanism for business ownership that does not le
ad to inequitable wealth distribution and avoid amoebic type break up, is also a
n important area of concern. Paisner’s idea of a trust route seems to be good, but
needs to be empirically validated.
Families are united over generations by their vision, values and emotional bonda
ge. There is growing realization that families have a social role to fulfill and
be responsible for specific activities including community development through
charity (Gallo, 2004 and Grant Thornton, 2001). All the five family businesses s
tudied here, like most other big groups, have their independent entities for cha
rity in the form of trusts, often run by lady members of the family. This is one
way of giving recognition and occupation for ladies, who are not generally invo
lved in business. There exist an unwritten rule in all the families studied here
that daughters-in-law do not get involved in business while daughters anyway, g
o to their in-law’s house. The current generation shows signs of this rule changin
g, slowly. Another source of challenge is in the nature of competitiveness. For
instance, when the Indian economy was opened up in 1991, most Indian Companies,
of which a huge majority were family owned, were put under competitive pressures
for the first time. Many firms, particularly those that grew under government p
rotection (Khanna and Palepu 1997) did not have a strategy to respond and take i
t as an opportunity rather than threat for a variety of reasons (Ray…..). This cre
ated huge tensions in business families, sometimes leading to division of assets
. It is also true that most businesses face such competitive pressures at differ
ent stages in their life, under the influence of economic cycles, product life c
ycles and firm life cycle.
Competitiveness to survive and grow depends on the organizational capabilities,
which flow from the family directly and from the resources hired from outside. T
he need to hire non family resources to build organizations is well recognized.
However, an area of conflict is the decision on the roles and responsibilities o
f outside professionals. Following the arguments of Agency theory (Williamson 19
75, Eisenhardt 1989) and the sensitivities of separating ownership and managemen
t in family business, conflicts do arise between owner families (principals) and
non-family professionals (agents). However, whether they do act as self-centred
managers or forms partnership with principals through emotional and non-monetar
y relationships (Ghoshal, 2004), depends on the situation. Studies of business h
istories of a number of groups (Tripathi, 2004, Karanjia, 1997) confirm that the
se relationships are not purely of the classical principalagent type. There is s
trong personal and family level bondages out of love and respect, generated over
a period of time between the principals and agents. The extent to which such re
lationship determines the survival and growth of family businesses needs separat
e research, particularly in the days when professionals’ loyalty is suspected to b
e towards their profession and not individual organizations. In essence, the mos
t important areas of concern for the success
CHAPTER5
What is American & British trading in entrepreneurship
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CHAPTER6
MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT 2006
An Act to provide for facilitating the promotion and development and enhancing t
he competitiveness of micro, small and medium enterprises and for matters connec
ted therewith or incidental thereto. Whereas a declaration as to expediency of c
ontrol of certain industries by the Union was made under section 2 of the Indust
ries (Development and Regulation) Act, 1951; And whereas it is expedient to prov
ide for facilitating the promotion and development and enhancing the competitive
ness of micro, small and medium enterprises and for matters connected therewith
or incidental thereto; Be it enacted by Parliament in the Fifty-seventh Year of
the Republic of India as follows:
1. Short title and commencement.-(1) This Act may be called the Micro, Small and
Medium Enterprises Development Act, 2006.
(2) It shall come into force on such date as the Central Government may, by noti
fication, appoint; and different dates may be appointed for different provisions
of this Act and any reference in any such provision to the commencement of this
Act shall be construed as a reference to the coming into force of that provisio
n.
2. Definitions.-In this Act, unless the context otherwise requires,—
(a) “Advisory Committee” means the committee constituted by the Central Government u
nder sub-section (2) of section 7; (b) “appointed day” means the day following immed
iately after the expiry of the period of fifteen days from the day of acceptance
or the day of deemed acceptance of any goods or any services by a buyer from a
supplier.
Explanation.—For the purposes of this clause,— (i) “the day of acceptance” means,— (a) the
day of the actual delivery of goods or the rendering of services; or (b) where
any objection is made in writing by the buyer regarding acceptance of goods or s
ervices within fifteen days from the day of the delivery of goods or the renderi
ng of services, the day on which such objection is removed by the supplier; (ii)
“the day of deemed acceptance” means, where no objection is made in writing by the
buyer regarding acceptance of goods or services within fifteen days from the day
of the delivery of goods or the rendering of services, the day of the actual de
livery of goods or the rendering of services; (c) “Board” means the National Board f
or Micro, Small and Medium Enterprises established under section 3; (d ) “buyer” mea
ns whoever buys any goods or receives any services from a supplier for considera
tion; (e) “enterprise” means an industrial undertaking or a business concern or any
other establishment, by whatever name called, engaged in the manufacture or prod
uction of goods, in any manner, pertaining to any industry specified in the Firs
t Schedule to the Industries (Development and Regulation) Act, 1951 or engaged i
n providing or rendering of any service or services; (f) “goods” means every kind of
movable property other than actionable claims and money;
medium enterprise” means an enterprise classified as such under sub-clause
micro enterprise” means an enterprise classified as such under sub-clause
small enterprise” means an enterprise classified as such under sub-clause
3.Establishment of Board.- (1) With effect from such date as the Central Governm
ent may, by notification, appoint, there shall be established, for the purposes
of this Act, a Board to be known as the National Board for Micro, Small and Medi
um Enterpris
4.Removal of member from Board.- (1) The Central Government may remove a member
of the Board from it, if he— (a) is, or at any time has been, adjudged as insolven
t; or (b) is, or becomes, of unsound mind and stands so declared by a competent
court; or (c) refuses to act or becomes incapable of acting as a member of the B
oard; or (d) has been convicted of an offence which, in the opinion of the Centr
al Government, involves moral turpitude; or (e) has so abused, in the opinion of
the Central Government, his position as a member of the Board as to render his
continuance in the Board detrimental to the interests of the general public.
5.Functions of Board.- The Board shall, subject to the general directions of the
Central Government, perform all or any of the following functions, namely:— (a) e
xamine the factors affecting the promotion and development of micro, small and m
edium enterprises and review the policies and programmes of the Central Governme
nt in regard to facilitating the promotion and development and enhancing the com
petitiveness of such enterprises and the impact thereof on such enterprises; (b)
 make recommendations on matters referred to in clause (a) or on any other matte
r referred to it by the Central Government which, in the opinion of that Governm
ent, is necessary or expedient for facilitating the promotion and development an
d enhancing the competitiveness of the micro, small and medium enterprises; and
(c) advise the Central Government on the use of the Fund or Funds constituted un
der section 12.
6. Powers and functions of Member-Secretary of Board.- Subject to other provisio
ns of this Act, the Member-Secretary of the Board shall exercise such powers and
perform such functions as may be prescribed. CHAPTER III Classification of ente
rprises, advisory committee and memorandum of micro, small and medium enterprise
s CHAPTER III Classification of enterprises, advisory committee and memorandum o
f micro, small and medium enterprises
7. Classification of enterprises.-(1) Notwithstanding anything contained in sect
ion 11B of the Industries (Development and Regulation) Act, 1951, the Central Go
vernment may, for the purposes of this Act, by notification and having regard to
the provisions of sub-sections (4) and (5), classify any class or classes of en
terprises, whether proprietorship, Hindu undivided family, association of person
s, co-operative society, partnership firm, company or undertaking, by whatever n
ame called,— (a) in the case of the enterprises engaged in the manufacture or prod
uction of goods pertaining to any industry specified in the First Schedule to th
e Industries (Development and Regulation) Act, 1951, as— (i) a micro enterprise, w
here the investment in plant and machinery does not exceed twenty-five lakh rupe
es; (ii) a small enterprise, where the investment in plant and machinery is more
than twenty-five lakh rupees but does not exceed five crore rupees; or (iii) a
medium enterprise, where the investment in plant and machinery is more than five
crore rupees but does not exceed ten crore rupees; (b) in the case of the enter
prises engaged in providing or rendering of services, as— (i) a micro enterprise,
where the investment in equipment does not exceed ten lakh rupees; (ii) a small
enterprise, where the investment in equipment is more than ten lakh rupees but d
oes not exceed two crore rupees; or (iii) a medium enterprise, where the investm
ent in equipment is more than two crore rupees but does not exceed five crore ru
pees. Explanation 1.—For the removal of doubts, it is hereby clarified that in cal
culating the investment in plant and machinery, the cost of pollution control, r
esearch and development, industrial safety devices and such other items as may b
e specified, by notification, shall be excluded.
“8. Memorandum of micro, small and medium enterprises.- (1) Any person who intends
to establish,— (a) a micro or small enterprise, may, at his discretion, or (b) a
medium enterprise engaged in providing or rendering of services may, at his disc
retion; or (c) a medium enterprise engaged in the manufacture or production of g
oods pertaining to any industry specified in the First Schedule to the Industrie
s (Development and Regulation) Act, 1951
9.Measures for promotion and development.- The Central Government may, from time
to time, for the purposes of facilitating the promotion and development and enh
ancing the competitiveness of micro, small and medium enterprises, particularly
of the micro and small enterprises, by way of development of skill in the employ
ees, management and entrepreneurs, provisioning for technological upgradation ma
rketing assistance or infrastructure facilities and cluster development of such
enterprises with a view to strengthening backward and forward linkages, specify,
by notification, such programmes, guidelines or instructions, as it may deem fi
t.
10.Credit facilities.- The policies and practices in respect of credit to the mi
cro, small and medium enterprises shall be progressive and such as may be specif
ied in the guidelines or instructions issued by the Reserve Bank, from time to t
ime, to ensure timely and smooth flow of credit tosuch enterprises, minimise the
incidence of sickness among and enhance the competitiveness of such enterprises
.
11.Procurement preference policy.- For facilitating promotion and development of
micro and small enterprises, the Central Government or the State Government may
, by order notify from time to time, preference policies in respect of procureme
nt of goods and services, produced and provided by micro and small enterprises,
by its Ministries or departments, as the case may be, or its aided institutions
and public sector enterprises.
12.Funds.- There shall be constituted, by notification, one or more Funds to be
called by such name as may be specified in the notification and there shall be c
redited thereto any grants made by the Central Government under section 13.
13. Grants by Central Government.-The Central Government may, after due appropri
ation made by Parliament by law in this behalf, credit to the Fund or Funds by w
ay of grants for the purposes of this Act, such sums of money as that Government
may consider necessary to provide.
14.Administration and utilisation of Fund or Funds.- (1) The Central Government
shall have the power to administer the Fund or Funds in such manner as may be pr
escribed.
(2) The Fund or Funds shall be utilised exclusively for the measures specified i
n sub-section (1) of section 9.
(3) The Central Government shall be responsible for the coordination and ensurin
g timely utilisation and release of sums in accordance with such criteria as may
be prescribed. CHAPTER V Delayed payments to micro and small enterprises CHAPTE
R V Delayed payments to micro and small enterprises
15.Liability of buyer to make payment.- Where any supplier, supplies any goods o
r renders any services to any buyer, the buyer shall make payment therefor on or
before the date agreed upon between him and the supplier in writing or, where t
here is no agreement in this behalf, before the appointed day: Provided that in
no case the period agreed upon between the supplier and the buyer in writing sha
ll exceed forty-five days from the day of acceptance or the day of deemed accept
ance.
16.Date from which and rate at which interest is payable.- Where any buyer fails
to make payment of the amount to the supplier, as required under section 15, th
e buyer shall, notwithstanding anything contained in any agreement between the b
uyer and the supplier or in any law for the time being in force, be liable to pa
y compound interest with monthly rests to the supplier on that amount from the a
ppointed day or, as the case may be, from the date immediately following the dat
e agreed upon, at three times of the bank rate notified by the Reserve Bank.
17.Recovery of amount due.- For any goods supplied or services rendered by the s
upplier, the buyer shall be liable to pay the amount with interest thereon as pr
ovided under section 16.
18.Reference to Micro and Small Enterprises Facilitation Council.- (1) Notwithst
anding anything contained in any other law for the time being in force, any part
y to a dispute may, with regard to any amount due under section 17, make a refer
ence to the Micro and Small Enterprises Facilitation Council.
CHAPTER7
Small business
A small business is a business that is privately owned and operated, with a smal
l number of employees and relatively low volume of sales. Small businesses are n
ormally privately owned corporations, partnerships, or sole proprietorships. The
legal definition of "small" varies by country and by industry. In the United St
ates the Small Business Administration establishes small business size standards
on an industry-by-industry basis, but generally specifies a small business as h
aving fewer than 100 employees.In the European Union, a small business generally
has under 50 employees. However, in Australia, a small business is defined by t
he Fair Work Act 2009 as one with fewer than 15 employees. By comparison, a medi
um sized business or mid-sized business has under 500 employees in the US, 250 i
n the European Union and fewer than 200 in Australia.
In addition to number of employees, other methods used to classify small compani
es include annual sales (turnover), value of assets and net profit (balance shee
t), alone or in a mixed definition. These criteria are followed by the European
Union, for instance (headcount, turnover and balance sheet totals). Small busine
sses are usually not dominant in their field of operation.
Small businesses are common in many countries, depending on the economic system
in operation. Typical examples include: convenience stores, other small shops (s
uch as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants,
restaurants, guest houses, photographers, small-scale manufacturing etc.
The smallest businesses, often located in private homes, are called microbusines
ses (term used by international organizations such as the World Bank and the Int
ernational Finance Corporation) or SoHos. The term "mom and pop business" is a c
ommon colloquial expression for a single-family operated business with few (or n
o) employees other than the owners. When judged by the number of employees, the
American and the European definitions of a microbusiness are the same: under 10
employees. There is a notable trend to further segment different-sized microbusi
nesses; for instance, the term Very Small Business is now being used to refer to
businesses that are the smallest of the smallest, such as those operated comple
tely by one person or by 1-3 employees.
Why Small Businesses Fail
Small Business Administration has seen lots of small businesses come and, unfort
unately, go. According to the SBA, over 50% of small businesses fail in the firs
t five years. Why? What goes wrong?
In his book Small Business Management, Michael Ames gives the following reasons
for small business failure:
1. Lack of experience
2. Insufficient capital (money)
3. Poor location
4. Poor inventory management
5. Over-investment in fixed assets
6. Poor credit arrangements
7. Personal use of business funds
8. Unexpected growth
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
9. Competition
10. Low sales
These figures aren t meant to scare you, but to prepare you for the rocky path a
head. Underestimating the difficulty of starting a business is one of the bigges
t obstacles entrepreneurs face. However, success can be yours if you are patient
, willing to work hard, and take all the necessary steps.
On the Upside
It s true that there are many reasons not to start your own business. But for th
e right person, the advantages of business ownership far outweigh the risks.
You will be your own boss. Hard work and long hours directly benefit you, rather
than increasing profits for someone else. Earning and growth potential are far
greater. A new venture is as exciting as it is risky. Running a business provide
s endless challenge and opportunities for learning.
CHAPTER8
Quick Start Business
A quick start business is one that you can implement and put into action right n
ow. Do you want to start a business now that is going to start putting money int
o your account? You can find links, information and directories on this site tha
t will lead you to the answers you have been searching for about a quick start b
usiness.
In starting any business, you should form a business plan. A business plan is go
ing to help you set goals. Set goals for your business that you can turn back to
, that you can reflect about when you need to take action to expand and create a
dditional sales for your business during the growing stages of business.
Your quick start business plan is going to tackle some quick topics such as:
• Who am I going to sell to?
• Where will the product come from?
• Do I need to invest a lot of money?
• Do I need a large space?
• Will I operate online or offline, or perhaps both?
• Where is my customer from?
• How much can I make on every product I sell?
When you can answer these questions, you have researched your quick start busine
ss fairly well and are ready to put your plan into action. The business owner, w
ho is well informed, is more likely to be successful in the long run. Avoid inve
sting or starting any business without being able to answer those quick question
s listed above.
Tips for a quick start business owner
Before jumping into any business you should be aware of what an entrepreneur, wh
at a business owner most often needs to have within their self before starting a
business. The entrepreneur is one that is self-confident. You have to be confid
ent in your abilities, in your skills and in your dedication. Good ethics and go
od work habits are traits of an entrepreneur. We each have our own values, which
will apply to any and all situations within our lives. Being able to apply ethi
cs and work habits to a quick start business will give you an edge, to be more s
uccessful. Yet, another trait of the entrepreneur is good communication skills.
Quick start businesses are built to last. In order for a business to last and be
profitable, good communication between vendors, customers and you as the busine
ss owner will be vital.
Additionally, for your success we suggest that an entrepreneur is one that is ab
le to deal with failure, learn from mistakes and continue to move on in the busi
ness. Failures are a learning experience and will benefit you if you learn from
them and move on. Dwelling on mistakes and failures will spell doom for your bus
iness, no matter what type of business you start. Take charge of your life; take
charge of your business, be your own boss using your creative ideas along with
the quick start business ideas to build a business for yourself. You make your o
wn choices. As you investigate and learn about any type of quick start business,
you will find there is one out there, just waiting for you to put it into actio
n.
Franchise
Simply, a franchise business is a method a company uses to distribute its produc
ts or services through retail outlets owned by independent, third party operator
s. The independent operator does business using the marketing methods, trademark
ed goods and services and the "goodwill" and name recognition developed by the c
ompany. In exchange, the independent operator pays an initial fee and royalties
to the owner of the franchise.
The company that grants the independent operator the right to distribute its tra
demarks, products, or techniques is known as the franchiser. The independent, th
ird party business person distributing the franchiser s products or services thr
ough retail or service outlets is called the franchisee.
Outsourcing - What is Outsourcing?

So, what is outsourcing? Outsourcing is contracting with another company or pers

on to do a particular function. Almost every organization outsources in some way
. Typically, the function being outsourced is considered non-core to the busines
s. An insurance company, for example, might outsource its janitorial and landsca
ping operations to firms that specialize in those types of work since they are n
ot related to insurance or strategic to the business. The outside firms that are
providing the outsourcing services are third-party providers, or as they are mo
re commonly called, service providers.
Although outsourcing has been around as long as work specialization has existed,
in recent history, companies began employing the outsourcing model to carry out
narrow functions, such as payroll, billing and data entry. Those processes coul
d be done more efficiently, and therefore more cost-effectively, by other compan
ies with specialized tools and facilities and specially trained personnel.
Currently, outsourcing takes many forms. Organizations still hire service provid
ers to handle distinct business processes, such as benefits management. But some
organizations outsource whole operations. The most common forms are information
technology outsourcing (ITO) and business process outsourcing (BPO).
Business process outsourcing encompasses call center outsourcing, human resource
s outsourcing (HRO), finance and accounting outsourcing, and claims processing o
utsourcing. These outsourcing deals involve multi-year contracts that can run in
to hundreds of millions of dollars. Frequently, the people performing the work i
nternally for the client firm are transferred and become employees for the servi
ce provider. Dominant outsourcing service providers in the information technolog
y outsourcing and business process outsourcing fields include IBM, EDS, CSC, HP,
ACS, Accenture and Capgemini.
Some nimble companies that are short on time and money, such as start-up softwar
e publishers, apply multisourcing -- using both internal and service provider st
aff -- in order to speed up the time to launch. They hire a multitude of outsour
cing service providers to handle almost all aspects of a new project, from produ
ct design, to software coding, to testing, to localization, and even to marketin
g and sales.
The process of outsourcing generally encompasses four stages: 1) strategic think
ing, to develop the organization s philosophy about the role of outsourcing in i
ts activities; 2) evaluation and selection, to decide on the appropriate outsour
cing projects and potential locations for the work to be done and service provid
ers to do it; 3) contract development, to work out the legal, pricing and servic
e level agreement (SLA) terms; and 4) outsourcing management or governance, to r
efine the ongoing working relationship between the client and outsourcing servic
e providers.
In all cases, outsourcing success depends on three factors: executive-level supp
ort in the client organization for the outsourcing mission; ample communication
to affected employees; and the client s ability to manage its service providers.
The outsourcing professionals in charge of the work on both the client and prov
ider sides need a combination of skills in such areas as negotiation, communicat
ion, project management, the ability to understand the terms and conditions of t
he contracts and service level agreements (SLAs), and, above all, the willingnes
s to be flexible as business needs change.
The challenges of outsourcing become especially acute when the work is being don
e in a different country (offshored), since that involves language, cultural and
time zone differences.
CHAPTER9
Venture capital
Venture capital is the term used when investors buy part of a company. A venture
capitalist places money in a company that is high risk and has a high growth. T
he investment is usually for a period of five to seven years. The investor will
expect a return on his money either by the sale of the company or by offering to
sell shares in the company to the public.
When investing venture capital, the investor may want receive a percentage of th
e company’s equity, and may also wish to have a position on the director’s board. Al
ways remember that an investor who agrees to place venture capital in a company
is looking to make a healthy return. She can demand repayment by the sale of the
company, asking for her funds back or renegotiating the original deal.
There are three different types of venture capital investment. Early stage finan
cing includes seed financing, start-up financing and first stage financing. Seed
financing refers to a small amount of venture capital given to an entrepreneur
or inventor who wishes to start a business. It may be used to build a management
team, for market research or to develop a business plan.
Start up financing refers to venture capital that is given when a business has b
een operating for less than a year. Their product will not have been sold commer
cially yet, and they will just be ready to start doing so. First stage financing
is used when companies wish to expand their capital and to proceed full scale a
nd enter the public business arena.
Another type of venture capital investment is expansion financing. This covers s
econd and third stage financing and bridge financing. Second stage financing is
an investment used to expand a company that is already on its feet. The company
is trading and has growing accounts and inventories, although it may not yet be
showing a profit.
Third stage financing is an investment to companies that are breaking even or be
coming profitable. The venture capital is used to expand the business. It may be
used in the acquisition of real estate or for further in-depth product developm
ent.
Bridge financing covers a variety of different meanings. It is a short term, int
erest only investment. It is used when company restructuring is taking place. Th
e money can also be used if an initial investor wants to liquidate his position
and sell his stock.
Another common form of venture capital is acquisition financing, in which the in
vestment is used to acquire a percentage or the whole of another company. Ventur
e capital can also be used by a management group to buy out another a line of pr
oducts or business, regardless of their stage of development. The company they b
uy out can either be a private or a public company.
DAYA NADAR