Entrepreneurial Support

Chapter Objectives
Discuss various sources of support for the entrepreneur List policies from all over, that help entrepreneurs Discuss how to evaluate these policies Describe the benefits of a business incubator Explain the intricacies of incubator management Define a business cluster Discuss identification and development of clusters

Entrepreneurial Support
Support in the form of progressive policies which help entrepreneurial ventures. Incubators which are set up to provide support to new firms in the early stages. Business clusters which are made up of firms in the same industry in close proximity to one another.

Aims of Policies
Entrepreneurship education: Entrepreneurial skills: Access to debt: Stimulating Innovation: Access to equity: Simplifying administrative burden: Access to markets: Encourage weaker sections:

Evaluating Policies
Take up of policy Opinion of beneficiaries Comparing performance

Incubators
Benefits from an incubator Access to shared flexible spaces Shared office services Providing a business consulting network Networking Facilitating access to capital

Incubator Management
There should be an incubator manager and a team of professionals The incubator should set clear guidelines for eligibility. An incubator should have clear cut guidelines for an admission process. A contract should be signed by the incubator and the entrepreneur laying down all the terms and conditions. Clear guidelines for the entrepreneurs exit should also be laid out The long term financial viability of the incubator will depend on its business model.

Revenue Streams for Incubators

A fixed rental to cover the cost of basic infrastructure A usage based charge for services like conference room, copier, etc. A success fee which can be in the form of an equity stake in the new venture.

Exiting an Incubator
The entrepreneur should exit: After a fixed period When the start up receives substantial funding When it achieves a certain level of profitability In case of irresolvable disputes

Some of the successfully incubated companies from SINE, the incubator at IIT, Bombay Herald Logic Pvt. Ltd. Voyager2 Infotech Myzus Technologies eInfinitus Powai Labs Pvt. Ltd. Seclore Technology Pvt. Ltd Eisodus Networks Pvt. Ltd. Quantum Phynance Pvt. Ltd.

Business Clusters
A geographical concentration of industries that gain performance advantages through colocation Well developed and intense links with suppliers Formal and informal business networks Shared supporting infrastructure like buildings and road connections A certain level of cooperation in spite of a high degree of rivalry and competition

International Clusters
Auto industry in Detroit Paris for high fashion Antwerp for diamonds Hollywood for movie production 5th Avenue in New York for Advertising Hsinchu in Taiwan for high technology

Indian Clusters
IT firms in Bangalore Diamond polishing in Surat Textiles in Tirupur Seafood processing in Kochi Call Centres in Gurgaon / NCR Jute mills in Kolkata

Benefits of Clusters
Michael Porter: productivity of the companies in the cluster increases there is increased scope for innovation in the sector new businesses are encouraged to come up

Types of Clusters
A vertically-integrated cluster is made up of businesses linked through intense buyer-seller relationships. A horizontally-integrated cluster is made up of businesses which share a common market for their end products, use a common technological base or common skilled workforce, or require similar raw materials.

Cluster Development
Supplier buyer relationships can be forged by collecting and distributing information about potential industry linkages. Common infrastructure can be supported by external agencies. Especially in the case of industries heavily dependant on specialized skills, providing skills training and education is a good means of supporting a cluster. Industries in a cluster can be aided by providing marketing channels.

THANKS