MBAR Entrepreneurship and small business management

MBA-210                              ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

Q. 1.        Answer all the questions:

(i)            Define Entrepreneurship.

ANS- Entrepreneurship is both the study of how new businesses are created as well as the actual process of starting a new business – the term is used interchangeably. An entrepreneur is someone who has an idea and who works to create a product or service that people will buy, by building an organization to support those sales.

Entrepreneurship is now a popular college major, with a focus on studying new venture creation.

(ii)           Write any two organizations name those are working for entrepreneurship development?

Ans- Ashoka- Founded in 1980, Ashoka is home to the largest network of social entrepreneurs on a global scale. Billy Drayton is the CEO and founder, and has been a social entrepreneur since he was an elementary-school student. Ashoka has nearly 3,000 members in 70 countries.

Vistage- Vistage is committed to CEO and executive coaching, leadership development and business mentoring. Those who are interested in giving back can also become a CEO coach with Vistage. The organization is made up of more than 20,000 business leaders worldwide with a members-only online network.

(iii)          Write any two types of entrepreneurial competencies?

Ans- Entrepreneurial competencies are the skills necessary for an entrepreneur to

• Venture into an enterprise
• Organize and manage an enterprise ably and competently
• Realize the goal for which the enterprise is established

(iv)          What is industrial sickness?

Ans- Industrial sickness usually refers to a situation when an industrial firm performs poorly, incurs losses for several years and often defaults in its debt repayment obligations. • A sick industrial unit may be defined as one when it fails to generate surplus on a continuous basis and depends on frequent infusion of external funds for its survival.

(v)           Write any two functions of entrepreneurship motivation training?

Ans-  1. Taking Initiative- Entrepreneurship is a pro-active activity that takes such actions, which others can’t even perceive.

2. Organizing Resources- Organizing entails identifying those resources that are required to transform a particular idea into reality. The resources include human and nonhuman resources.

Q. 2.       Discuss the various compositions of business plan.

Ans- A business plan can take many forms, depending on the venture. A four-person management consulting firm may produce a leaner plan focused on service expertise and industry experience compared to a 20-employee widget maker, which would also have to describe products, manufacturing techniques, competitive forces and marketing needs, among other details. But most plans will include the following main sections:

Executive summary

This is your five-minute elevator pitch. It may include a table of contents, company background, market opportunity, management overviews, competitive advantages, and financial highlights. It’s probably easiest to write the detailed sections first and then extract the cream to create the executive summary.

Business description and structure

This is where you explain why you're in business and what you're selling. If you sell products, describe your manufacturing process, availability of materials, how you handle inventory and fulfillment, and other operational details.

Market research and strategies

Spell out your market analysis and describe your marketing strategy, including sales forecasts, deadlines and milestones, advertising, public relations and how you stack up against your competition.

Management and personnel

Provide bios of your company executives and managers and explain how their expertise will help you meet business goals. Investors need to evaluate risk, and often, a management team with lots of experience may lower perceived risk.

Financial documents

This is where you provide the numbers that back up everything you described in your organizational and marketing sections. Include conservative projections of your profit and loss statements, balance sheet, and your cash flow statements for the next three years.

Q. 3.       Discuss the various functions of entrepreneurs.

Ans- The following points highlight the top five functions of an entrepreneur. The functions are: 1. Decision Making 2. Management Control 3. Division of Income 4. Risk-Taking and Uncertainty-Bearing 5. Innovation.

Function # 1. Decision Making:

The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is to determine what to produce, how much to produce, how to produce, where to produce, how to sell and’ so forth. Moreover, he is to decide the scale of production and the proportion in which he combines the different factors he employs.

Function # 2. Management Control:

Earlier writers used to consider the manage­ment control one of the chief functions of the entrepreneur. Management and control of the business are conducted by the entrepreneur himself. So, the latter must possess a high degree of management ability to select the right type of persons to work with him.

Function # 3. Division of Income:

The next major function of the entrepreneur is to make necessary arrangement for the division of total income among the different factors of production employed by him. Even if there is a loss in the business, he is to pay rent, interest, wages and other contractual incomes out of the realised sale proceeds.

Function # 4. Risk-Taking and Uncertainty-Bearing:

Risk-taking is perhaps the most important function of an entrepreneur. Modern production is very risky as an entrepreneur is required to produce goods or services in antici­pation of their future demand.

Function # 5. Innovation:

Another distinguishing function of the entrepreneur, as emphasised by Schumpeter, is to make frequent inventions — invention of new products, new techniques and discovering new markets — to improve his competitive position, and to increase earnings.

Internal Assignment No. 2

 (i)           What is the difference between entrepreneurship and intra-preneurship?

Ans- An entrepreneur is a person who takes a considerable amount of risk to own and operate the business, with an aim of earning returns and rewards, from that business. An intrapreneur is an employee of the organization who is paid 

remuneration according to the success of the business unit, for which he/she is hired or responsible.

(ii)           What is EDP?

Ans- Entrepreneurship Development Programme (EDP) is a programme which helps in developing the entrepreneurial abilities. The skills that are required to run a business successfully is developed among the people through this programme. Sometimes, people may have skills but it requires polishing and incubation. 

(iii)          What is business plan?

Ans- A business plan is a document that describes a new business, its products or services, how it will earn money, leadership and staffing, financing, operations model, and other details that are essential to both operation and success. Entrepreneurs create them as part of the start up process while existing businesses often write them when changing direction or strategy.

(iv)          Write any two types of business crisis?

Ans-  Following are the types of crisis:

Natural Crisis

Disturbances in the environment and nature lead to natural crisis.

Such events are generally beyond the control of human beings.

Tornadoes, Earthquakes, Hurricanes, Landslides, Tsunamis, Flood, Drought all result in natural disaster.

Technological Crisis

Technological crisis arises as a result of failure in technology. Problems in the overall systems lead to technological crisis.

Breakdown of machine, corrupted software and so on give rise to technological crisis.

(v)           What is SIDO?

Ans- Small Industries Development Organization (SIDO) is a subordinate office of the Department of SSI & Auxiliary and Rural Industry (ARI). It is an apex body and nodal agency for formulating, coordinating and monitoring the policies and programmes for promotion and development of small-scale industries.

Note: Answer any two questions. Each question carries 5 marks (Word limits 500)

Q. 1.        How small scale industries are helpful in economic development.

ANS- In a developing country like India, the role and importance of small-scale industries is very significant towards poverty eradication, employment generation, rural development and creating regional balance in promotion and growth of various development activities.

1. Employment generation:

The basic problem that is confronting the Indian economy is increasing pressure of population on the land and the need to create massive employment opportunities. This problem is solved to larger extent by small-scale industries because small- scale industries are labour intensive in character.

2. Mobilisation of resources and entrepreneurial skill:

Small-scale industries can mobilize a good amount of savings and entrepreneurial skill from rural and semi-urban areas remain untouched from the clutches of large industries and put them into productive use by investing in small-scale units. Small entrepreneurs also improve social welfare of a country by harnessing dormant, previously overlooked talent.

Thus, a huge amount of latent resources ;re being mobilised by the small-scale sector for the development of the economy.

3. Equitable distribution of income:

Small entrepreneurs stimulate a redistribution of wealth, income and political power within societies in ways that are economically positive and without being politically disruptive.

4. Regional dispersal of industries:

There has been massive concentration of industries m a few large cities of different states of Indian union. People migrate from rural and semi urban areas to these highly developed centres in search of employment and sometimes to earn a better living which ultimately leads to many evil consequences of over-crowding, pollution, creation of slums, etc.

5. Provides opportunities for development of technology:

Small-scale industries have tremendous capacity to generate or absorb innovations. They provide ample opportunities for the development of technology and technology in return, creates an environment conducive to the development of small units.

6. Indigenisation:

Small-scale industries make better use of indigenous organisational and management capabilities by drawing on a pool of entrepreneurial talent that is limited in the early stages of economic development.

7. Promotes exports:

Small-scale industries have registered a phenomenal growth in export over the years. The value of exports of products of small-scale industries has increased to Rs. 393 crores in 1973-74 to Rs. 71, 244 crores in 2002-03. This contributes about 35% India's total export.

8. Supports the growth of large industries:

The small-scale industries play an important role in assisting bigger industries and projects so that the planned activity of development work is timely attended. They support the growth of large industries by providing, components, accessories and semi finished goods required by them.

9. Better industrial relations:

Better industrial relations between the employer and employees helps in increasing the efficiency of employees and reducing the frequency of industrial disputes. The loss of production and man-days are comparatively less in small- scale industries. There is hardly any strikes and lock out in these industries due to good employee-employer relationship.

Q. 2.        Write the process of feasibility study?

ANS- Feasibility is defined as the practical extent to which a project can be performed successfully. To evaluate feasibility, a feasibility study is performed, which determines whether the solution considered to accomplish the requirements is practical and workable in the software. Information such as resource availability, cost estimation for software development, benefits of the software to the organization after it is developed and cost to be incurred on its maintenance are considered during the feasibility study. The objective of the feasibility study is to establish the reasons for developing the software that is acceptable to users, adaptable to change and conformable to established standards. Various other objectives of feasibility study are listed below.

Feasibility Study Process

Feasibility study comprises the following steps.

1. Information assessment: Identifies information about whether the system helps in achieving the objectives of the organization. It also verifies that the system can be implemented using new technology and within the budget and whether the system can be integrated with the existing system.

2. Information collection: Specifies the sources from where information about software can be obtained. Generally, these sources include users (who will operate the software), organization (where the software will be used), and the software development team (which understands user requirements and knows how to fulfill them in software).

3. Report writing: Uses a feasibility report, which is the conclusion of the feasibility study by the software development team. It includes the recommendations whether the software development should continue. This report may also include information about changes in the software scope, budget, and schedule and suggestions of any requirements in the system.

4. General information: Describes the purpose and scope of feasibility study. It also describes system overview, project references, acronyms and abbreviations, and points of contact to be used.

5. Management summary: Provides the following information.

6. Environment: Identifies the individuals responsible for software development. It provides information about input and output requirements, processing requirements of the software and the interaction of the software with other software. It also identifies system security requirements and the system's processing requirements

7. Current functional procedures: Describes the current functional procedures of the existing system, whether automated or manual. It also ncludes the data-flow of the current system and the number of team members required to operate and maintain the software.

8. Functional objective: Provides information about functions of the system such as new services, increased capacity, and so on.