Definition of Entrepreneurship
Entrepreneurship is the process of identifying, developing, and bringing a vision to life. This vision may be an
innovative idea, a new product or service, or a better way to operate a business. The person who initiates
and organizes this process is called an
entrepreneur.
Module 1: Introduction to Entrepreneurship
1. Need for Entrepreneurship
Entrepreneurship is crucial for:
• Economic Development: Entrepreneurs introduce new products, services, and
technologies, leading to GDP growth. Example: IT startups in Bangalore
contributing to India’s economy.
• Employment Generation: SMEs and startups create jobs, reducing
unemployment. Example: Flipkart employs thousands directly and indirectly.
• Innovation: Entrepreneurs drive R&D, leading to breakthroughs. Example: Tesla
revolutionizing electric vehicles.
• Regional Development: Entrepreneurs in rural areas boost local economies.
Example: Amul’s cooperative model empowering dairy farmers.
• Social Change: Social entrepreneurs address issues like education (Byju’s) and
healthcare (Narayana Health).
2. Scope of Entrepreneurship
Entrepreneurship spans various sectors:
• Small & Medium Enterprises (SMEs): Local businesses like kirana stores,
handicrafts.
• Tech Startups: SaaS (Zoho), AI (OpenAI), fintech (Paytm).
• Social Ventures: Non-profits (Akshaya Patra), hybrid models (Selco Solar).
• Corporate Entrepreneurship: Intrapreneurship (Google’s "20% time" policy
leading to Gmail).
3. Characteristics of Entrepreneurs
• Risk-taking: Willingness to invest in uncertain ventures (e.g., Elon Musk investing
in SpaceX).
• Innovation: Creating disruptive solutions (e.g., Uber transforming transportation).
• Vision: Long-term goals (e.g., Jeff Bezos’ vision for Amazon).
• Resilience: Overcoming failures (e.g., Steve Jobs’ comeback to Apple).
• Leadership: Inspiring teams (e.g., Ratan Tata’s leadership in Tata Group).
4. Government Schemes for Entrepreneurs
• STED (Science & Technology Entrepreneurship Development): Promotes tech-
based startups with funding and mentorship.
• Startup India: Tax holidays, funding support, incubators.
• Stand-Up India: Loans for women/SC/ST entrepreneurs (₹10 lakh – ₹1 crore).
• MUDRA Yojana: Loans up to ₹10 lakh for micro-enterprises.
5. Opportunity Identification
Methods:
• Market Gap Analysis: Identifying unmet needs (e.g., Swiggy solving food delivery
gaps).
• Trend Analysis: Leveraging trends like AI, sustainability (e.g., Ola Electric).
• Customer Feedback: Surveys/interviews (e.g., Zomato improving based on user
reviews).
6. Types of Industries
Type Description Example
Driven by consumer
Demand-Based McDonald’s, Zara
demand
Tata Steel (iron ore), ITC (agro-
Resource-Based Uses local raw materials
products)
Service-Based Focuses on services Infosys (IT), Apollo Hospitals
Import Micromax (smartphones), Ather
Replaces imports
Substitute (EVs)
Export Tata Motors (Jaguar), Wipro (IT
Targets global markets
Promotion exports)
Module 2: Market Survey & Project Formulation
1. Market Survey Techniques
Primary Research
• Questionnaires: Structured surveys (Google Forms, face-to-face).
o Example: A startup surveying 500 users to gauge interest in a new app.
• Interviews: One-on-one discussions (phone/in-person).
o Example: A founder interviewing 20 potential customers about pain points.
• Focus Groups: Small group discussions (6–10 people).
o Example: A cosmetic brand testing new packaging with a focus group.
Secondary Research
• Government Data: Census, Economic Survey, Ministry reports.
• Industry Reports: NASSCOM, IBEF, McKinsey studies.
• Competitor Analysis: Studying rivals’ websites, annual reports.
2. Project Formulation Steps
1. Feasibility Study:
o Technical: Can the product be made? (e.g., EV battery tech).
o Financial: Is funding available? (e.g., break-even analysis).
o Market: Is there demand? (e.g., survey results).
2. Objective Setting:
o Short-term: Launch MVP in 6 months.
o Long-term: Capture 10% market share in 3 years.
3. Resource Planning:
o Manpower: Hiring engineers, marketers.
o Capital: Bootstrapping vs. investor funding.
4. Risk Assessment:
o Competition: SWOT of rivals.
o Regulatory: Compliance with GST, labor laws.
3. Product Selection Criteria
• Market Demand: Is there a need? (e.g., electric scooters in 2024).
• Profitability: Cost vs. revenue projections (e.g., 30% gross margin).
• Technical Feasibility: Can it be manufactured? (e.g., semiconductor chips require
high-tech facilities).
• Competition: Is the market saturated? (e.g., food delivery vs. niche healthcare
apps).
4. Project Report Structure
1. Executive Summary: 1-page overview of the business idea.
2. Market Analysis:
o Target audience (age, income, location).
o Competitor benchmarking (price, features).
3. Technical Plan:
o Production process (flowchart).
o Machinery list (costs, suppliers).
4. Financial Plan:
o Startup costs (equipment, salaries).
o Revenue projections (5-year forecast).
5. Risk Mitigation:
o Backup suppliers.
o Insurance coverage.
Module 3: Technology, Financing & Financial Ratios
1. Choice of Technology
Factors to consider:
• Cost: CAPEX (machinery) vs. OPEX (maintenance).
• Scalability: Can it handle growth? (e.g., cloud computing for startups).
• Compatibility: Works with existing systems (e.g., ERP software).
2. Plant & Equipment Selection
• Production Capacity: Match with demand forecasts (e.g., 10,000 units/month).
• Automation Level:
o Manual: Low cost, high labor (e.g., handmade crafts).
o Robotic: High precision, low labor (e.g., car manufacturing).
3. Financing Institutions
• Banks: SBI (Startup Loan), HDFC (Working Capital Loan).
• Government Schemes:
o Credit Guarantee Fund (CGTMSE) for collateral-free loans.
o PMEGP (Prime Minister’s Employment Generation Programme).
• Venture Capital:
o Sequoia, Accel for high-growth startups (e.g., Swiggy, Byju’s).
4. Key Financial Ratios
Ratio Formula Significance
Current Current Assets / Current Measures short-term liquidity
Ratio Liabilities (ideal: 2:1).
Total Debt / Shareholder’s Indicates financial leverage (ideal:
Debt-Equity
Equity <1).
Evaluates profitability (e.g., 20%
ROI (Net Profit / Investment) x 100
ROI).
Module 4: Financial Statements & Resource Management
1. Books of Accounts
• Journal: Records daily transactions (date, amount, description).
• Ledger: Categorizes transactions (e.g., Sales Ledger, Purchase Ledger).
• Trial Balance: Ensures debits = credits (error-checking tool).
2. Financial Statements
• Balance Sheet:
o Assets: Cash, inventory, machinery.
o Liabilities: Loans, unpaid bills.
o Equity: Owner’s capital, retained earnings.
• Profit & Loss (P&L):
o Revenue: Sales, service income.
o Expenses: Salaries, rent, marketing.
o Net Profit: Revenue – Expenses.
• Cash Flow Statement:
o Operating: Day-to-day business.
o Investing: Buying/selling assets.
o Financing: Loans, equity.
3. Funds Flow Analysis
• Sources of Funds:
o Profits, loans, investor capital.
• Uses of Funds:
o Buying equipment, repaying debts.
4. Resource Management
• Men (HR):
o Training programs (e.g., TCS’s continuous learning).
o Productivity tools (Slack, Trello).
• Machines:
o Preventive maintenance schedules.
o Downtime tracking.
• Materials:
o Just-in-Time (JIT) inventory.
o Economic Order Quantity (EOQ) model.
Module 5: CPM, PERT & SWOT Analysis
1. CPM (Critical Path Method)
• Steps:
1. List all project tasks (e.g., design, manufacturing, marketing).
2. Estimate duration for each task.
3. Identify dependencies (e.g., manufacturing can’t start before design).
4. Determine the longest path (critical path).
• Example: Building a house (critical path: foundation → walls → roofing).
2. PERT (Project Evaluation Review Technique)
• Time Estimates:
o Optimistic (O): Best-case scenario.
o Pessimistic (P): Worst-case scenario.
o Most Likely (M): Realistic estimate.
• Formula:
o Expected Time = (O + 4M + P) / 6
• Example: Software development project with:
o O = 2 months, M = 4 months, P = 6 months.
o Expected time = (2 + 16 + 6)/6 = 4 months.
3. SWOT Analysis
Factor Example (Tesla)
Strength Strong brand, innovative tech.
Weakness High production costs.
Opportunity Growing EV market in India.
Threat Competition from Tata, Hyundai.
Module 6: Feasibility, Plant Layout & Quality Control
1. Techno-Economic Feasibility
• Technical Feasibility:
o Can the product be made with available technology? (e.g., semiconductor
manufacturing requires advanced tech).
• Economic Feasibility:
o Break-even analysis: Fixed Costs / (Price – Variable Costs).
o Example: A café with ₹5 lakh fixed costs, ₹100 price/cup, ₹50 variable cost:
BEP = 5,00,000 / (100–50) = 10,000 cups.
2. Plant Layout Types
• Process Layout:
o Machines grouped by function (e.g., hospital: ICU, OPD).
• Product Layout:
o Assembly line (e.g., Maruti Suzuki’s car manufacturing).
• Fixed-Position Layout:
o Product stays, workers move (e.g., shipbuilding).
3. Quality Control Methods
• Six Sigma:
o DMAIC (Define, Measure, Analyze, Improve, Control).
o Example: Reducing defects in smartphone production.
• ISO Certification:
o ISO 9001 (Quality Management).
o ISO 14001 (Environmental Management).
Module 7: Marketing & Sales Management
1. Marketing Mix (4 Ps)
• Product: Features, branding (e.g., iPhone’s premium design).
• Price:
o Cost-based: Cost + markup.
o Value-based: Charging for perceived value (e.g., Rolex).
• Place:
o Online (Amazon), offline (showrooms).
• Promotion:
o Advertising (TV, Google Ads), PR (press releases).
2. After-Sales Service
• Warranty (e.g., Samsung’s 1-year warranty).
• Customer support (e.g., Amazon’s 24/7 chat).
Module 8: Legal Compliance & Ethics
1. Key Business Laws
• Factory Act: Worker safety, working hours.
• Sales of Goods Act: Buyer/seller rights, warranties.
• Partnership Act: Profit-sharing, liability (unlimited for partners).
2. Tax Compliance
• Income Tax: ITR filing (due July 31).
• GST: Monthly/quarterly filings.
3. Business Ethics
• CSR: TATA’s education initiatives.
• Anti-Corruption: Transparency in contracts.
