Dreamer

To
Entrepreneur
XI Steps to Become a Successful Startup
Entrepreneur

Dr. Suresh Jain

DREAMER TO ENTREPRENEUR
XI Steps to Become a Successful Startup Entrepreneur
Dr. Suresh Jain
Published by Qurate Books Pvt. Ltd.
© Dr. Suresh Jain

Published in 2023

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 FOREWORD - 1
Starting your own business can be an exciting and well-
rewarding experience. It makes one self-reliant while providing
others with job opportunities. The right skills and attitude are
must for an entrepreneur to thrive in this changing economy.
Entrepreneurs are people that are blessed with the capacity
to dream and take the risks that make the dream come true.
Making a business profitable is not easy - it requires planning,
proper execution and understanding of the needs of people
around you. This book does exactly that - provides you with a
step-by-step guide on how to make the most of your time and
become successful entrepreneurs. The Author Dr Suresh Jain
with his vast experience in banking, credit, and entrepreneurship
development, has shared his valuable knowledge and experience
on entrepreneurship in this book. His easy-to-understand style
of writing will engage an aspirant entrepreneur in becoming a
successful one. I congratulate Dr. Suresh Jain for this inspiring
book that will enlighten the reader on all business-related
topics. I hope the reader gets motivated to pursue the field of
entrepreneurship with enhanced clarity and hope for a brighter
future.

Amit Goel
[A Promising Entrepreneur]
Founder and Managing Director - Prodigee Finance Limited
Founder – Prodigee Private Limited
Founder – Credgenix Private Limited
Date – 23rd May 2023
Place- Bhopal [M.P.] India 462011

FOREWORD - 1 │ 5
 PROLOGUE
Dear Reader,
I am delighted to introduce “Dreamer to Entrepreneur,”
an insightful and practical guide written by Dr. Suresh Jain, a
veteran banker, and esteemed financial consultant. This book
has been meticulously crafted to assist MSME entrepreneurs in
realizing their dreams and overcoming the challenges they face
in setting up, running, and expanding their businesses.
Within its 32 thoughtfully structured chapters, “Dreamer to
Entrepreneur” takes you on a transformative journey, providing
invaluable guidance and strategies to navigate the path towards
entrepreneurial success. Dr. Suresh’s vast experience and
expertise in the field of finance have uniquely positioned him
to address the specific needs of startup entrepreneurs, offering
them a comprehensive roadmap towards achieving their goals.
The book encompasses a wide range of essential topics
crucial for entrepreneurial success. From strategic planning and
leadership to product development and financial management,
Dr. Suresh leaves no stone unturned. Chapters dedicated to
fundraising, time and crisis management, project appraisal,
and risk management equip readers with the necessary tools to
overcome obstacles and make informed decisions.
Moreover, “Dreamer to Entrepreneur” delves into the often-
overlooked aspect of entrepreneur psychology, highlighting the
significance of mindset, motivation, and resilience in the face
of challenges. Dr. Suresh’s deep understanding of the human

PROLOGUE │ 9
psyche, combined with his practical advice, empowers readers
to develop the mental fortitude required for their entrepreneurial
journey.
I am confident that “Dreamer to Entrepreneur” will prove
to be an invaluable companion for aspiring and struggling
entrepreneurs alike. It offers a blueprint for success, underpinned
by Dr. Suresh’s wealth of knowledge and practical insights.
Whether you are just starting out or seeking guidance to expand
your existing business, this book will provide you with the
essential tools and strategies to transform your dreams into
reality.
I wholeheartedly recommend “Dreamer to Entrepreneur” to
all entrepreneurs seeking inspiration, guidance, and expertise.
Prepare to embark on a remarkable journey of self-discovery and
entrepreneurial achievement.
Wishing you every success on your path to entrepreneurship!
Sincerely,
[Ajay Vyas]
Financial Consultant, Digital Banking Strategist Innovator
Former Executive Director UCO Bank
 IN D E X
1. Introduction............................................................................... 13
2. Characteristics and Qualities of Entrepreneur...................... 17
3. Mindset and Attitude Matters most for
an Entrepreneur........................................................................ 23
4. XI Steps to Become a Successful
Startup Entrepreneur................................................................ 26
5. Entrepreneurship– A Matter of Pride
for Entrepreneur........................................................................ 30
6. Types of Entrepreneurship....................................................... 33
7. Process of Identification of Innovative Products
/ Processes/Services [PPS]....................................................... 37
8 Emerging Business Opportunities.......................................... 43
9. Establishment of an Enterprise - Basic Steps........................ 49
10. Strategic Business Plan Preparation....................................... 52
11. Basics of Balance Sheet and Profit &
Loss Account............................................................................. 55
12. Preparation of Project Report................................................. 61
13. Project Appraisal....................................................................... 65
14. Intellectual Property Rights [IPR].......................................... 73
15. Fund Raising for Finance to Entrepreneurs
and Startup Enterprises............................................................ 77

I N D E X │ 11
16. Business Growth, Product Diversification
and Expansion........................................................................... 83
17. Package Designing and Packaging.......................................... 90
18. Costing and Pricing are key
Element of Profit....................................................................... 93
19. Maintain High Quality Standards........................................... 95
20. Risk Assessment and Risk Mitigation.................................... 98
21. Banking - Basic Knowledge................................................... 103
22. Purchasing of Capital Assets and Raw Material
- A Proper Approach............................................................. 109
23. Working Capital Management.............................................. 112
24. Break-Even Analysis............................................................... 120
25. Time Tested Marketing and Sales Strategy.......................... 125
26. Accounts and Book- Keeping................................................ 130
27. Human Resource Management............................................. 134
28. Time Management.................................................................. 138
29. Crisis Management................................................................. 143
30. Customer Relationship Management................................... 146
31. Failure of Enterprises – Symptoms,
Reasons and Remedy.............................................................. 150
32. Leadership................................................................................ 156
Acknowledgement.......................................................... 162

12 │ Dreamer to Entrepreneur
 CHAPTER 1

Introduction
The word ‘entrepreneur’ is derived from the french word
‘entreprende’. It means to‘ undertake’. Richard Cantilon who is
a french Banker used the term entrepreneur in 18th century first
time in economic activities to mean a person who bears uncertainty
and risk.
Thus, the concept of entrepreneur and entrepreneurship is
age old concept and many authors have defined it in their own
ways. I quote hereunder definitions of some eminent authorities.
Peter F Drucker one of the most widely known authors and
influential thinkers on Management states that an entrepreneur
is the one who always searches for changes, responds to it and
exploits it as an opportunity. He further states that innovation
is the specific tool of an entrepreneur, the means by which he
exploits change as an opportunity for a different business or
services.

Schumpeter:
A well-known author has defined entrepreneur as an
individual who carries out new combines of means of production
by which there occurs disequilibrium.”
According to him “The entrepreneur, in an advanced
economy is an individual who introduces something new in the
economy – a method of production not yet tested by experience
in the branch of manufacturing, a product with which consumers
are not yet familiar, a new source of raw material or of new
markets and the like”.

Introduction │ 13
 He stated that the “entrepreneur is an individual who exploits
market opportunity through technical and/or organization
innovation. Thus, the entrepreneur is basically an innovator and
innovator are one who introduces new combinations.
After looking to the definition of the entrepreneur its
important here to look into the definition of eminent authors on
entrepreneurship.
1. “Entrepreneurship means the function of seeing
investment and production opportunity, organizing
an enterprise to undertake a new production process,
raising capital, hiring labour, arranging for supply of
raw materials and selecting top managers for day-to-day
operations of the enterprise.” – Higgins
2. “Entrepreneurship is essentially a creative activity, or it
is an innovation function. The process of innovation may
be in the form of –
(a) Introduction of a new product.
(b) Use of a new method of production.
(c) Opening of a new market.
(d) The conquest of new source of supplying raw
material.
(e) A new form of organization.” – Joseph A. Schumpeter
3. “Entrepreneurship is defined as a systematic innovation,
which consists in the purposeful and organized search
for changes, and it is the systematic analysis of the
opportunities. Such changes might offer economic and
social innovation.” Peter F. Drucker.
4. “Entrepreneurship is the purposeful activity of an
individual or a group of associated individuals,
undertaken to initiate, maintain or organize a profit-
oriented business unit for the production or distribution
of economic goods and services”. – A. H. Cole

14 │ Dreamer to Entrepreneur
 5. “Entrepreneurship is the investing and risking of
time, money and effort to start a business and make it
successful.” – Musscleman and Jackson
6. “Entrepreneurship involves a wide range of areas on
which a series of decisions are required which can be
grouped into three categories –
(a) perception of an opportunity.
(b) organizing an industrial unit.
(c) running the industrial unit as a profitable, going,
and growing concern.” – Higgins
In the above backdrop, we may define in a simple way that
the entrepreneur is an individual who creates an innovative
idea to develop a new product, process, or service and thereby
establish a new business enterprise or scale up an existing
business enterprise, take calculative financial risk and find out
how to mitigate such risk and gain the profit. In other words,
an entrepreneur is someone who develops a business model,
starts it as his/her new venture operationalizes it, and takes
responsibility for its success or failure. Entrepreneurs should
have a clear mindset to establish the enterprises with full
knowledge of risk and reward and must have confidence in
themselves with a clear vision to establish and scale up their
business. The success of such an enterprise shall depend on the
quantum of sale of products and services to its target customers
and earn the profit. A successful entrepreneur also keeps in
mind to solve the problem and deliver value to the customers by
introducing new products or services and expanding its market
to make the product and services available within the reach of
maximum customers. Being an entrepreneur means carving
your own path with courage, confidence, and a positive mindset.
An entrepreneur should also build a team of competent experts
and employees who are positive, motivated, and committed to
making a difference and creating value for the enterprise.

Introduction │ 15
 The process of setting up of business enterprise by the
entrepreneur bearing the risk and enjoying the reward is termed
entrepreneurship.
Entrepreneurship is a creative approach undertaken by an
entrepreneur to establish a new business enterprise or scale
up an existing business enterprise with an innovative product
or process or service. Innovation and risk are integral parts of
entrepreneurship. Each enterprise will be successful and have
the potential to grow many folds if the product and process are
well tested and good demand is created by the promoter with
proper strategies and marketing.
Entrepreneurs and entrepreneurship come in many
businesses structure like trading, industries, online business,
E-Commerce platform, self-employment activities, consultancy,
etc. The enterprise can be constituted as a proprietorship firm,
partnership firm, limited liability partnership, private limited
and public limited companies, etc. A newly started enterprise
with innovative products or processes or services falls into the
category of a start-up.
Each aspect of entrepreneur and entrepreneurship shall be
discussed in the following chapters to ensure the success of all
entrepreneurs.
●●●

16 │ Dreamer to Entrepreneur
 CHAPTER 2

Characteristics and Qualities of

Entrepreneur
Entrepreneurship is a great opportunity, provided the
entrepreneurs possess the entrepreneurial mindset, clear vision,
mission, and spirit to overcome the hurdles that may come in the
way of their entrepreneurial journey.
Many people wish to become entrepreneurs by starting a new
venture but have yet to learn about starting a profitable business.
Moreover, they believe that starting a new business enterprise
carries a risk or requires a very high educational background,
like a degree in business management or technical skill, previous
business experience, etc. Their above apprehensions are invalid,
looking to facts that entrepreneurs come from every section of
society. Aspiring entrepreneurs must acquire some knowledge,
skill, and risk assessment and mitigation process concerning the
business activity they want to establish. The knowledge and skill
boost their confidence to achieve their dream.
After that, aspiring Entrepreneurs can start planning and
executing their new venture with a positive mindset and self-
confidence to become successful start-up entrepreneurs.
We discuss hereunder in detail the characteristics and
qualities of entrepreneurs.
1. Mind Set – The entrepreneurial mindset combines
education, training, experience, skills, beliefs, and
thought processes. A positive mindset is necessary to

Characteristics and Qualities of Entrepreneur │ 17

 start a new venture or start-up. People should have
strong willpower to become a successful entrepreneur.
They should enjoy the proud moments of being their
own boss instead of working for someone else as their
employees. When entrepreneurs are strongly motivated,
their entrepreneurial journey becomes unstoppable.
They can also feel the pleasure of being a job provider,
not a job seeker. It is worth noting that success comes
80 percent from a mindset and 20 percent from skill;
therefore, a growth-oriented mindset evolves abilities to
do what one decides. Building skill from what you know
gives you simple success, but implementing a promising
business idea with a passion and a strong mindset will
ensure success, and you will reach the top of the ladder.
2. Goal Oriented, Self-Confident, and Ambitious – The
entrepreneur should be goal oriented and committed
to taking action to achieve the goal. Goal setting is the
first step towards the success of the entrepreneurship
journey. Entrepreneurs who do not have the attribute to
set a goal will not know where they want to go. They
should be self-confident, ambitious and believe in their
capabilities that they will do it and achieve their goal.
3. Focused Approach – Entrepreneurs should focus on
achieving their goal within the prefixed timeline. If
entrepreneurs continue to divert their attention to
so many things at a time, they cannot attend to their
primary tasks with due attention and achieve their goals.
It’s important to mention here that many times it’s easy
to start an enterprise; still, it requires a certain gestation
period to achieve the desired progress, and hence a long-
term focus approach is necessary for the enterprise’s
success. High performers are known to have a pinpoint
focus on their immediate task and give their all without
worrying about what has happened in the past or what
may come up in future.

18 │ Dreamer to Entrepreneur
4. Action Oriented – Entrepreneurs should act fast within a
short time to achieve their goals. The word like will do it
tomorrow, or I will try will not take them anywhere. The
action should always be well-defined, and consistent,
with a stipulated timeline to reach the target. It’s also
essential to have an alternate course of action if some
hurdles are expected in the initial action plan so that the
entrepreneur journey indeed achieves success.
5. Managerial And Technical Knowledge, Skill, and
Team Building – Entrepreneurs should possess the
required Managerial and technical Knowledge and skill
relating to their enterprise and continuously improve to
become successful entrepreneurs. Those who stay at the
top of their position take a keen interest in learning what
they lack, not only from formal education but also from
observations of what is happening around them and
from what life teaches. Their learning habit makes them,
as well as their work, better and better every day. The
entrepreneurs should also engage a mentor for required
guidance and hire subject experts, thereby building a
team of competent employees and inculcating team
spirit in them; so that, everyone works to create value for
the company.
6. Curiosity And Consistency - Curiosity keeps
entrepreneurs aware of the kind of products and services
in high demand, where the market is, and the target group
of customers for the sale of such products or services.
Entrepreneurs must maintain consistency in their efforts
to search for such products and services, which gives
them good opportunities to learn and discover new
products or services.
7. Creativity – Creativity is an important quality of an
entrepreneur. Creative entrepreneurs have a better
imagination to design products and services and improve
them as per the need of their customers.

Characteristics and Qualities of Entrepreneur │ 19

 8. Adaptability – Entrepreneurs should be adaptable and
remain flexible to the extent possible in changed business
scenarios to solve the challenges that come before them
during the business cycle and ensure that their business
keeps growing as per their business plan.
9. Decision-Making Capability – Successful entrepreneurs
make quick decisions in every aspect of their business,
irrespective of prevailing circumstances. They know that
the delay in the decision may turn a simple and routine
matter into a complicated issue and may lead to loss to
their enterprise.
10. Innovative Attitude – A successful entrepreneur should
have an innovative attitude and further cultivate it and
keep on developing and improving the product, process,
and services as per customer’s needs.
11. Risk Analysis and Its Mitigation and Risk Bearing
Capacity - Entrepreneurship carries risk and reward
both. A successful entrepreneur analyses the risk and
finds out the ways to mitigate it or minimize it. Despite
the best efforts many times the risk cannot be fully
insulated, under such situation the entrepreneur should
absorb the failure and learn from it so that in future such
risk can be better insulated in advance.
12. Fear of Failure - An entrepreneurs should have a positive
mindset and handle unpleasant situations like failure
of their business despite of appropriate risk insulation,
as a part of the game. They should not carry with them
any fear of failure, rather learn the lesson from mistakes
and shortcomings, and take appropriate corrective steps
treating such failure as a first step of success. Remember
everyone deals with the setbacks even those who are
today at the top, because they have not given up and taken
failure as a first step towards success. SachinTendulkar
an Indian cricketer reached to the top in cricket world

20 │ Dreamer to Entrepreneur
 because of his persistent efforts and strong will power,
though he faced many challenges as a cricket player.
13. Communication, Leadership and Team Building –
The successful entrepreneurs should possess good
communication skills and have leadership qualities.
They should build their team of well qualified competent
people for the success of their enterprises. Everyone in the
enterprise should work as a team to take the enterprise to
the new height. Concerning to leadership, it’s important
that the entrepreneurs should be the thought leaders
by establishing their authority as an expert in a specific
area of their working, building a trust among employees
and customers and providing innovative solutions to
industry challenges and innovative products, process,
and services to their enterprises. Thought leadership
qualities in the entrepreneurs will make their enterprises
outstanding among the other enterprises, and they
become the source of inspiration to others in addition to
winning performance of their enterprises.
14. Understand Basic Banking, Finance and Accounts -
It’s important for the entrepreneurs to understand basic
banking, finance, and accounts to run their enterprises
successfully. Successful entrepreneurs make quick
decisions in every aspect of their business, irrespective
of prevailing circumstances. They know that the delay in
the decision may turn a simple and routine matter into a
complicated issue and may lead to loss to their enterprise.
Successful entrepreneurs make quick decisions in every
aspect of their business, irrespective of prevailing
circumstances. They know that the delay in the decision
may turn a simple and routine matter into a complicated
issue and may lead to loss to their enterprise.
15. Resiliency– The entrepreneurs should stand with
pressure, failure and challenges that comes in their way

Characteristics and Qualities of Entrepreneur │ 21

 of entrepreneurial journey. At the same time, they should
learn the lessons from above unpleasant experiences and
take required precautionary action to overcome them to
continue their entrepreneurship journey unaffected.
To sum up, entrepreneurs should possess or develop the
above characteristics and qualities essential for the success of the
entrepreneurship journey.
●●●

22 │ Dreamer to Entrepreneur
 CHAPTER 3

Mindset and Attitude Matters most

for an Entrepreneur
An entrepreneur is a person who sets up his own enterprise
taking calculative risk for perceived rewards. He initiates the
idea, formulates a plan, organizes resources and puts the plan
into action to achieve his goal. Entrepreneurs have specific
characteristics, qualities, and special strengths, which they draw
upon their adventure into entrepreneurship and play different
roles at different stages of entrepreneurship. An entrepreneur
must possess a positive and action-oriented mindset which is
explained below.
1. Dream It; Take Action to Achieve It:
Entrepreneurs need to have clear vision and mission and
a strong winning mindset to make their dreams come
true. They build strategic business planning, decide their
goal, and take action to achieve it with excellence. They
further move on to spot the growth opportunities and
go head to includes the same in for their expansion or
diversification business plan. On the other hand, the
people who do not have entrepreneurial mindset are
found reluctant to take action to make their dream a
reality.
2. Self-Commitment:
Entrepreneurs should know the art of selective discipline,
their vision and mission, which will decide their line

Mindset and Attitude Matters most for an Entrepreneur │ 23

 of action to achieve their goal for which they should
remain committed always. Difficulties and problems, or
challenges whatever comes in their way can be resolved
by them with their best of abilities and flexibility in their
action plan. They work not only hard but also smartly
until successful completion of their mission.
3. Treat Risk as a Part of Game:
Entrepreneurs know that risk is part of any business
enterprises. They smartly analyse the risk and find out
the ways to mitigate the risk to the extent possible.
However, in situations where mitigation of risk is not
possible in toto, they choose the risk where there are
good chance to win exist, but they don’t give up easily.
They take onus of their decisions in their entrepreneurial
journey.
4. Keen Observer and In-Cash Opportunity:
Entrepreneurs keep their eyes and year open, observe
carefully what is trailing and what are the emerging
opportunities available and accordingly their innovative
mind start to plan carefully, to convert their observations
into business opportunities.
5. Only Business Matters:
Entrepreneurs are fully dedicated to their business
commitments. Their personal likes and dislikes do not
matter for them in their business verticals. They appoint
mentors or professionals rather than friends and relatives
when any guidance and support is required. They have
a practical and realistic approach to business matters
without giving any importance to the emotional aspect.
6. Customers Centric:
Entrepreneurs take the feedback of customer seriously
with sportsman spirit whether the same are favourable
or unfavourable. In fact, they feel good about favourable

24 │ Dreamer to Entrepreneur
 customers reaction but feel more excited and energetic
with unfavourable reactions because it gives them a
chance to improve their product and services which will
ultimately bring success to their venture.
7. Optimistic:
Entrepreneurs have an optimistic mindset. They always
remain sure of their success without getting affected
by any negativity which may come across during their
entrepreneurial journey.
8. Influencer:
An entrepreneur should act as an influencer to make the
people buy the products and services made available
to people by his enterprise. This will increase the sales,
which is the backbone of success of any enterprise.
9. Long Term Player:
An entrepreneurs should think of remaining in his
business for the long term once they have decided to
set up the same. They should have a long-term goal to
scale up their business activities to many folds in years
to come.
The above qualities at mindset level will lead to sure
success to the entrepreneurs to achieve their goals.

●●●

Mindset and Attitude Matters most for an Entrepreneur │ 25

 CHAPTER 4

XI Steps to Become a Successful

Startup Entrepreneur
The following XI steps are important for making proper
strategies and planning to become a successful startup
entrepreneur.

STEP – I.
The first step for the entrepreneurs is to conduct a market
survey or a market study to understand the need of the customers
to develop the products/processes/services accordingly. Such
products, processes, and services will have a robust market and
ready buyers, and it will be easy to develop a broader market of
such products/processes and services in the near future.

STEP – II.
In the second step, the entrepreneurs should identify
opportunities for innovative products/processes/services based
on a market survey or market study/own assessment/idea
generation/fusion of ideas/and ease of doing business. The
customer’s needs, choices, tastes, preferences, and market trends
for the product have prime importance in the identification of
opportunities.

STEP – III
The third step is to conceptualize and develop a prototype
of innovative products, processes, or services by crystallizing
the selection and validation of opportunity by ascertaining the

26 │ Dreamer to Entrepreneur
demand for the products or processes, or services in the market
and by running a trial run among some customers and obtaining
the feedback of such customers. If the market report and feedback
of the customers are positive, the entrepreneurs may move
ahead with the final selection of innovative products/processes/
services. Selection of products/processes/services that resolve
some problem or make the life of the customers easy or cost-
effective with better quality compared to similar products are
easy to position at a high level in the market.
The above stage is called the seed stage in startup journey.

STEP – IV.
In the fourth step, the entrepreneurs should appoint a mentor
[if required] and get their guidance to start the entrepreneurial
journey. The mentor will guide at every stage of the implementation
of a project. The valuable advice of a mentor will increase the
project’s success rate many folds. Startup entrepreneurs should
also approach incubation centres established in many reputed
institutions/ universities with their concept and prototype for
necessary guidance from subject experts and financial support to
develop the product as per their concept and prototype.

STEP – V.
In the fifth step, entrepreneurs must take action on many
things, like preparing a business model based on innovative
products/processes/ services. This model should explain
the type of business like trading, manufacturing, or services,
organize the product/process or services prototype, prepare the
road map to manufacture the products, or develop the processes
and services with technical specifications. The entrepreneurs
should also prepare the estimation of sales and profit with future
outlook, target customers, and plan to capture the market for the
sale of the products/processes/services. The model should also
cover the estimated funds required and sources of funds to meet
the requirement to start and run the business enterprises.

XI Steps to Become a Successful Startup Entrepreneur │ 27

STEP – VI.
The sixth step is to appoint the subject experts and team
members and delegate the work and powers to make decisions
in the interest of the enterprises. For the project’s success, the
team members from top to bottom shall need to align to achieve
the goal of the enterprise in respect of every vertical, including
customer satisfaction.

STEP – VII.
In the seventh step, the entrepreneurs should constitute the
business firm, such as a proprietorship firm, partnership firm,
Pvt Ltd company, or a company limited by shares or limited
liability partnership [LLP], and obtain all necessary registration,
licenses, approvals as applicable from the competent authorities
and applicable laws.

STEP – VIII.
The eighth step is for the preparation of the business plan
with an implementation schedule and making a project report
with projections of financials for the next 5 years to arrive at the
conclusion that the project is technically feasible and financially
viable. Also crystallize future outlook to scale up the business.

STEP – IX.
The ninth step is to arrange the funds from various sources,
including grants, aids, subsidies, [if available] private equity,
venture capital funds, and Bank finance for the project. To
complete the process of fund arrangement in the shortest
possible time, the entrepreneurs may hire experts as the sanction
process require systemically drafting of the proposal and many
supporting documents and information about the project and
promoters. Establish the production unit following the details
mentioned in the project report and complete the project as
per the implementation schedule. As envisaged in the project
report, ensuring the unit comes to production on or before the

28 │ Dreamer to Entrepreneur
commercial operation date is vital. Entrepreneurs must also
ensure that the unit achieves the estimated sale volume and
profit.

STEP – X.
In the tenth step, the entrepreneurs should create brand,
logo, website and Marketing strategies. Brand creation and
logo will build the image and acceptability of the products,
processes and services in the market. The ultimate progress of
the enterprise will come from the sale of the products/processes
and services. Likewise creating own website also build the brand
value, market reputation and contribute to the marketing of the
products/processes and services.
This stage is called the operational stage in startup
entrepreneurial journey.

STEP – XI.
The eleventh step is the scaling-up stage, when the startup
enterprise grows many folds and achieves new milestones in
production, sales volume, and profit, thereby creating value for
the investors and entrepreneurs. To scale up the business, the
entrepreneur should explore new markets, go with a deeper
penetration in existing markets, modify or change the product
design as per the customers’ needs, and change the printing and
packaging according to customers’ liking and business trends.
These honest and sincere efforts will undoubtedly result in the
scaling-up of the enterprises.
To sum up, all the above steps are self-explanatory. Startup
entrepreneurs should start their journey and move step by step
to become successful startup entrepreneurs.

●●●

XI Steps to Become a Successful Startup Entrepreneur │ 29

 CHAPTER 5

Entrepreneurship– A Matter of
Pride for Entrepreneur
Entrepreneurship is the most exciting opportunity of self-
employment. A great feeling of “be your own boss” can be
achieved through entrepreneurship only. In employment one
works for others, and one works as others want one to do. There
is no scope for doing as you wish, doing what you wish, doing
how you wish. But in entrepreneurship you work for yourself,
achieve a target or a goal set by yourself and reap the satisfaction
of having achieved the goal yourself.
Entrepreneurship is not a matter of hereditary. It is 80 percent
mind set and 20 percent skill. It is individual potentialities
irrespective of any caste, community and class, or economic
background. It is not necessary that one should be highly educated
or should have vast experience, rather a workable knowledge
and skill are sufficient provided he possesses a strong mind
set, high ambition, passion and fighting spirit to succeed as an
entrepreneur apart from other qualities mentioned in this book.
As such, any person having a positive mindset, passion, ambition,
fighting spirit and aptitude to do in him/her can become an
entrepreneur. A person can get required knowledge and skill
from various sources/training institutes and universities if he is
determined to become a successful entrepreneur.

30 │ Dreamer to Entrepreneur
 Some more material reasons to feel proud of entrepreneurship:
1. It provides an opportunity to get into a process which
leads to the realization of an individual’s passion for
innovation and development. Its well-known facts that
entrepreneurship have been the origin of many radical
innovations.
2. It is through science and technology inputs that modern
technology can be introduced in various sector of economy
and thereby a new cost effectiveness and sophistication
can be brought in the products and processes as well as
in services to be utilized by the people at large.
3. To find suitable employment one must try hard but
may or may not get success. On the other end to be an
entrepreneur one must believe in himself and if the
qualities and competencies are there, he will succeed in
becoming an entrepreneur. There may be challenges that
come in entrepreneurial journey but can be crossed over
with entrepreneur mindset easily. Entrepreneurship is
not tough as it is thought by many aspirants.
4. The Government and many universities offer so many
facilities like selection of viable products/processes/
services, appropriate business model, mentoring, and
providing incentives to help new entrepreneurs for their
enterprises and startups.
5. An entrepreneur is his/her own boss who creates
employment for others and in this way he/she becomes
a source of livelihood for so many people, which is a
great service to the society of the country.
Entrepreneur develops innovative products and services
which becomes growth engine of many economies. The google,
face book, e-commerce, smart phone, Artificial Intelligence, are
the examples which has impacted every one’s life and changed
the world to a great extend in last 20 years.

Entrepreneurship– A Matter of Pride for Entrepreneur │ 31

 To sum up, entrepreneurship contributes significantly to
society at large, and at the same time, it functions as a growth
engine for the country’s economy, giving a sense of pride to the
entrepreneurs.

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32 │ Dreamer to Entrepreneur
 CHAPTER 6

Types of Entrepreneurships
Entrepreneurs have many business opportunities and according
to type of business, size of operation, Nature of business,
Economic sector, entrepreneurs’ personality, entrepreneurship
is categorized into different types. We discuss hereunder some
common types of entrepreneurships.
1. Based on Type of Business Activity: -
A] Trading entrepreneurship – Trading is basically the
purchase of products in bulk and sale of the same in
wholesale or retail. This also covers trading on the
E. Commerce platform or through our own website.
Dealership, franchisee, distributorship will fall into
this category. This is one of the simplest forms of
entrepreneurship and does not require any specific
technical knowledge except managerial skill.
B] Manufacturing Entrepreneurship – This type of
entrepreneurship involves manufacturing, processing,
and packaging of the products. It requires setting up
manufacturing/ processing and packaging facilities for
manufacturing the products, from raw material.
C] Agricultural entrepreneurship – This type of
entrepreneurship is related to agriculture like cultivation,
of agricultural produce including horticulture, aromatic
and medicinal plants, etc. and preservation and
marketing their Agri- produce. This also covers activities

Types of Entrepreneurships │ 33
 allied to agriculture like Dairy, poultry, Sheep and
Goat farming, etc. The entrepreneurs undertake above
activities are called Agripreneurs and they introduce
innovative and modern practices in their agricultural
business activities.
2. Based on Size of Business:
A] Small business entrepreneurship – It covers small size
enterprise usually started by one entrepreneur and not
having any ready plan to scale up the business or to go
for giving franchisee in future. Examples are hair cutting
saloon, Spa, laundry, grocery store etc. This kind of
business employee local employees or family members
and use their own funds to start the business or take
small ticket loan from banks or financial institutions.
B] Scalable startup entrepreneurship - As the name suggest
this type of business or start up are set up with aim of
rapid expansion in terms sales turn and profit. Such
entrepreneurs are usually visionary and have long term
goals to achieve big profit for themselves and to create
value for their investor. The startup entrepreneur looks
forward to meeting the capital required for expansion
from various sources like venture capital, grant in aid,
private funding in equity and debt, and credit facilities
such as term loan and working capital from banks. Most
of such business enterprises are set up with modern
technology, work with proper system and procedure
based on Information technology so that proper linkage
of different verticals of business can be established
and having a good team of experts and employees to
scale up the business and create the value both for the
entrepreneurs and their investors. Many companies are
created with a simple business model but now become
the big players, like OLA, Uber, Zomato, Face book,
Google, Amazon who has changed the world as on date.

34 │ Dreamer to Entrepreneur
 C] Large company entrepreneurship - These are already
well-established companies like Google, Microsoft and
they go on expanding their business worldwide. They
continue to make innovations and develop new products
relating to their main products. Many times, whenever
the opportunity comes, they go for acquisition of other
companies whose business relates to their key business
and gets bigger in size in respect of turnover and
profitability.
3. Based on Clearance Danhof –
A] Innovative Entrepreneurship - In an innovative
entrepreneurship, the entrepreneurs introduce
innovative products/ process/ services and find out
the customers to buy the same. Many times, business
is started with simple but innovative business models
and thereafter upgraded products/process or services
are introduced or new innovative products/process/
services are added for scaling up the Business. Innovative
entrepreneurships are usually started as start up and go
for scaling up or expansion in terms of sales and profit.
B] Imitative Entrepreneurship – In this type of
entrepreneurship, the entrepreneur gets an idea of
innovative products/process from other entrepreneurs.
They adopt techniques and technology innovated by
others and make some improvement in the same and
make new combination of product/process and services.
They also make their own risk assessment and risk
insulation strategies.
C] Fabian entrepreneurship - In this type, the entrepreneurs
are having a very cautious approach and accept the
changes in their business model till they become sure
that not adopting such changes may result in loss to their
enterprises.

Types of Entrepreneurships │ 35
 D] Drone entrepreneurship- In this type, entrepreneurs do
not accept any changes in product formulae or process
even at the possibilities of reduction in sales and profit.
4. Hustler Entrepreneurship – A hustler in the business world
is commonly known as a self-starter. Hence it can be understood
that the entrepreneurship journey started as a self-starter by the
entrepreneurs with confidence, having a clear goal to succeed
is termed as Hustler entrepreneurship. Entrepreneurs are
highly motivated, and they identify and in cash the available
opportunities fearlessly to establish and grow their business
enterprises.
5. Social Entrepreneurship - Social entrepreneurs create a
business model which benefits society at large and yields profit
for the entrepreneur. Social entrepreneurship may be non-profit
also. Some social entrepreneurship also covers aspects like
creating self-employment, or work for protection of environment
or health and sanitation or running educational programs.
Providing banking services or non-banking financial companies
services in unserved areas or creating microfinance institutions
to provide credit facilities to poor section of society also falls
within the social entrepreneurship.

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36 │ Dreamer to Entrepreneur
 CHAPTER 7

Process of Identification of
Innovative Products/ Processes/
Services [PPS]
The road map of process of identification of innovative
products/process or services [in short named as PPS] need a
systematic approach to reach winning, niche PPS. Anyone who
wishes to be a successful entrepreneur can do it if he is creative,
visionary, with a goal oriented positive mind set and action
taker. The stages for innovation are described as under-.
1] Curiosity – Entrepreneur should have a curiosity to
observe the world with a business angle. Like what are
need of the people or what can make the life of people
easy or comfortable or how the heath conditions can
be improved by prevention of disease, accurate and
quick diagnosis of disease and support to the doctors or
specialists to decides the appropriate treatment, or what
kind of changes in the existing industries or enterprise
can increase the production or can reduced the cost of
products or can bring more precision and automation by
artificial intelligence, machine learning and robotics.
2] Creativity – Once curiosity identifies the area suitable
for your passion, the same is to be pursued further by
your creativity. Creation of road map for innovation of
some PPS in your area of interest, making systemic study

Process of Identification of Innovative Products/ Processes/Services [PPS] │ 37

 of demand and supply position and estimated risk and
reward to arrive at most suitable PPS to start with the
entrepreneurship journey.
3] Idea generation - The curious and creative mind
generates the ideas which lead to innovation. The ideas
in its totality may not be a new one but it may be a new
version of old ideas or fusion of ideas by adopting better
methodology. We mention below famous quote of the
well-known Indian author Shiv Kheda that.
”Winners don’t do different things; they do things differently.”
This different way of doing things has become an innovative
idea for entrepreneurs for further development of PPS.
Entrepreneurs may develop their confidence that they may
derive new ideas from existing ideas to start their entrepreneurial
journey. Let’s learn from quote of Samuel Langhorne Clemens
known by his pen name Mark Twain, an American writer,
humourist, and entrepreneur who explained the idea generation
intricacies as below:
“There is no such thing as a new idea. It is impossible. We
simply take a lot of old ideas and put them into a sort of mental
kaleidoscope. We give them a turn, and they make new and
curious combinations. We keep on turning and making new
combinations indefinitely; but they are the same old pieces of
coloured glass that have been in use through all the ages.”
There are ample examples of idea generation which has made
a successful business venture. The wright brothers were always
fascinated to work on different mechanical projects and keeping
up with the scientific research. They were following up German
Otto Lilienthal aviator. When Lilienthal died, they decided to
develop design of airplane. They were trying to figure out how
to design the wings. They make observation that birds angle
their wings for balance and control and emulate the concept
called Wing warping. They added a movable rudder and found

38 │ Dreamer to Entrepreneur
that it’s a successful formula. This observation succeeded them
in flying for the first time, in a well-controlled, power driven,
heavier than air, airplane.
The new idea many times comes from fusion of many ideas
in existence.
Justin Musk an author (she is ex-wife of Elon Musk, CEO of
tesla) explained the fusion of ideas as-
“Choose one thing and become a Master of It. Choose a second
thing and become a master of that. When you become a master of
two worlds (say, engineering and business), you can bring them
together in a way that will a) introduce hot ideas to each other, so
they can have idea marriage and make idea babies that no one
has seen before, and b) create a competitive advantage because
you can move between worlds, speak both languages, connect
the tribes, mash the elements to spark fresh creative insight
until you wake up with the epiphany that changes your life.”
Such ideas or fusion of ideas, by upgradation, induction of AI,
machine learning in the existing system has turned companies
like Google, face book, ola, uber, Paytm into very big companies
and thereby creating their impact on the life of every person and
every economy worldwide.
Here we would like to encourage the entrepreneur to make
your thought process creative and analytical to generate new
ideas from in and around existing ideas or fusion of idea. We
do not say here that absolutely new ideas are not generated,
of course generated but it involves research and development
which some time may require good number of years to validate
the ideas into the new product.
Once the ideas are generated and conceptualized, this is
called in other words an innovative idea and products/process/
services produced and implemented on such ideas are termed as
innovative PPS. The journey of idea generation is nothing but an
innovation.

Process of Identification of Innovative Products/ Processes/Services [PPS] │ 39

 The idea generation is not enough and Entrepreneur to
move ahead to next stage of identification of opportunities and
thereafter selection or validation of opportunity.
What said by Mark Twain is quoted hereunder.
“A man on new idea is crank until the idea succeeds”.
In order to convert the idea into a successful business venture,
it is essential to go through the process of identification and
selection/validation of opportunity.
Identification of opportunities –
The opportunities are ample, and one must identify it based
on ideas generated by him. we quote the views of Douglas
MacArthur a famous general in American army, on the
opportunity as under.
“There is no security on this earth, - only opportunity”.
Once the ideas are generated, the entrepreneur need to
examine them what are ideas which can be converted into
opportunities in the light of business environment and relevant
parameters which may be described as under.
1. Experience/ expertise/ knowledge/ skill and
competency of entrepreneur.
2. Entrepreneur own preference for the business activity/
type of products/processes/services.
3. Regulatory norms for the products/processes/services
and related industry.
4. Market conditions like demand and supply position.
5. Technological support in the production and distribution
process of the products/processes/services.
6. Availability of land, water, electricity, raw materials,
manpower, funds required for the production and
distribution products/processes/services.

40 │ Dreamer to Entrepreneur
 7. Risk perceived and mitigation of risk.
8. Estimated sales and Profitability of business enterprise at
least for 5 years.
9. Future business prospects to scale up the business.
After studies of say 3 different ideas and identification of
opportunities, the entrepreneur must begin with one business
opportunity which is to be done by the next steps called selection
of opportunity or validation.
Selection or validation of opportunity involving products/
processes/services [PPS]-
Entrepreneurs should not lose the opportunity to start their
enterprise. It is relevant to quote the views of Thomas J. Watson
a American businessman and served as CEO of IBM, hereunder.
“Opportunity never knocks on the door; you have to knock
on the opportunity’s door, and they are all around.”
This stage is very critical and entrepreneur and enterprise
both should be in one line and length to achieve the success. This
process of selection and validation of opportunity is also called
the zero-down process.
At this stage, the guidance and support from mentor and
subject experts plays a great role.
The process involved preparation of information on the
parameters of the identified opportunities [ say 3 opportunities],
thereafter data are analysed and interpreted in the free and fair
way. The opportunity/product which stood first worked out
on an average basis and preferred by the entrepreneur may be
selected for validation. Once the product is selected its prototype
should be developed and then a market study should be done to
ascertain the demand and a trial run is carried out for acceptance
of products/processes/services by customers. If the report of
the market study regarding the demand of the product and
customer feedback is received positive the product is selected
and validated.

Process of Identification of Innovative Products/ Processes/Services [PPS] │ 41

 The products/processes and services finally selected/
validated by the entrepreneur are termed as innovative products/
processes/ services.
Entrepreneurs may note that the development of products/
processes/services by a specific process of ideas generation,
from existing ideas or fusion of ideas or development of
absolutely new ideas, till completion of the process of selection
and validation of ideas, is known as innovation of products/
processes/services and such products/processes and services
are known as innovative products/processes and services.

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42 │ Dreamer to Entrepreneur
 CHAPTER 8

Emerging Business Opportunities

There are many opportunities for the entrepreneurs in various
sectors of economy to start their own enterprises. The following
sectors are emerging as a fast-growing sector and creating new
business opportunities for the entrepreneurs as per current
market trends and the prospects for entrepreneurship in the
opinion of author., Entrepreneurs may explore these emerging
business opportunities as per there interest and due diligence
along with the opportunities in other sectors also as per their
objectives.

1] Information Technology –
Information technology [IT] is a very big segment which
has its implications on entire world. Today every individual as
well as existing business and industries across all the sectors are
having impact of Information technology which has resulted into
tremendous growth of IT sector in entire world. Social media like
face book, Instagram, LinkedIn, You Tube, Twitter etc., Health
and wellness sector like hospital, gym, Entertainment industry,
Banking and finance, Insurance, Sports and Games, Travel and
Tourism, Hotel and Hospitality, Food industry, Agriculture
and Industries, Ecommerce, Payment platform, Fintech and
digital lending platforms and Education sectors gives immense
opportunity to develop innovative software or improve existing
software to make the things more easy to do by the people which
will ultimately result in to increase number of users. Information
Technology would be into every sector and have the greater
impact on the society at large.

Emerging Business Opportunities │ 43

2] Artificial intelligence and machine learning [AI/ML]-
The application of AI/ML have been seen widespread to
every sector in the past few years and there will be exceptional
growth in this segment in next few years with the reflection of
value and benefits of this application. The data analysis with
the use of AL/ML within the shortest possible time create
tremendous value for every organization. The entrepreneurs of
technical band of mind can explore the possibilities to develop
the products or process, which can embed with the AI/ML
technology in the existing processes or operation to create the
value for their enterprises with the growth of this sector.

3] Robotics -
Robotics is having a bright future prospect of growth as its
application is increasing in various sectors like Health, Industries,
Agriculture, and many more sectors. It creates more value for
the organizations wherever the robotics technology is adopted.
Entrepreneurs may search for opportunity for application of
robotics in various sectors.

4] Drone development and application–

Drone is now being used in various sectors and purposes.
For example, it is used for spray of medicines to the agricultural
crops, or for survey or sending essential goods in remote places
or by military establishment for keeping watch on border of
the country. Entrepreneurs may find the opportunity in drone
related segment.

5] Medical devices-
The health awareness among the people is increasing but the
specialized medical services are not easily available particularly
in remote areas. This creates the requirement of medical devices
like small size ECG machine, small ultrasonography machine,
Blood pressure instruments, glucometer etc for want of early
diagnosis of diseases and consulting specialist by the health
workers or by the people themselves for appropriate treatment

44 │ Dreamer to Entrepreneur
even from remote places. Entrepreneurs may explore the
possibilities of innovative medical devices keeping in view the
need of the people.

6] Veterinary devices –
Health of the animals is important from economic point of
view for all types of animals. Likewise pet animals also need
good health care. Entrepreneurs can explore the possibilities of
development of veterinary devices which can keep the watch on
the health of animals and if any sign of disease is noticed, the
same can be used for consultation and treatment from veterinary
doctor.

7] E-commerce business –
Ecommerce business is the fastest growing business
worldwide. There are many sellers of the same products. The
entrepreneurs may explore the possibilities of trading few
identified products on online platforms like Amazon and flip
cart where they can have enough margin between prize on the
online platform and the procurement price in wholesale market
or in direct purchase from manufacturers.

8] Manufacturing sector-
This sector provides wide scope for entrepreneurs, as it is
applicable for every sector of economy where manufacturing
process is involved which includes small industries to big
industries. Entrepreneurs can develop their own product or new
technology or manufacturing process and go for manufacturing
of their own products based on that and launch in the market.

9] Export business –
Export business is one of the fastest growing businesses in the
global economy. This business is having two sections as under. –
1] Export of goods/services to oversees countries.
2] Import of goods/services from the oversees countries.

Emerging Business Opportunities │ 45

 Most of the entrepreneurs think that the export business is
not an easy one because of the various rules and regulations
but it’s not a truth. In fact, once the entrepreneurs decide to
entre in to export business, they will get the support from
government agencies, chamber of commerce, Embassies of
different countries, Director general of foreign trade and export
councils in their efforts to become a exporters and importers
Now a days every country is promoting export activities to
earn the foreign currency to improve their position of balance
of payments. Entrepreneurs can take export import code from
Director general of foreign trade to start their export and import
business. They can manufacture their identified products or get
it manufactured from others and can sale it in domestic as well as
oversees market. They can start export activities in joint venture
with existing manufacturers. Entrepreneurs in initial stage do
this business after ascertaining credentials of buyers in overseas
country from exports promotion councils/ embassies or through
credit agencies and supply the goods on full payment or against
letter of credit of full amount.

10] Nutritional products-

Customers are now becoming health conscious and prefer
the healthier food and other nutritional products. These
products includes nutraceutical products also. In food products
categories, people prefer organically grown foods, high fibre
contents fruits and vegetables which keeps them physically and
mentally healthy and energetic with good immunity to protect
them from diseases. Consumers are having good concern about
cleanliness as well as the contents of the products. Companies
maintaining the required quality standard create their brand
value and growing faster than their competitors lacking in quality
standard. Some sections of the society prefer the home-made
food not only for homely taste but for good quality, which have
been cooked with all required cleanliness. This trend of healthy
food and wellness products, which are also environmentally
friendly, will be widely spread in days to come. Entrepreneurs

46 │ Dreamer to Entrepreneur
may explore the business opportunity in this segment in the best
of their judgement.

11] Lifestyle and fashion products –

Fashion is changing very fast with liking of consumers for
the cost effective and environmentally friendly products. For
examples people’s choice for cosmetics made up from natural
ingredients is increasing or in jewellery segment peoples liking
for lab grown diamond or in textiles segment peoples liking for
comfort in wearing are the new trend. This segment can be a
good option for the entrepreneurs.

12] Green energy –

Green energy like solar energy, wind energy, and other
alternative source of energy which protect our environment are
going to boom across the world. The use of the product like e-
vehicles will increase because there is no pollution from such
vehicle and vehicle running cost is very less. Biofuel is another
area which creates opportunity for the entrepreneurs.

13] Waste Management –

This segment is a combination of so many vertices like
E-waste, plastic and rubber waste, electronic appliances,
biodegradable waste, household waste, Agricultural waste,
scrap vehicles waste, furniture waste, waste from dismantling
of ship or permanently shut down industries etc. Recycling of
waste and reuse the extracts from the waste or make the same or
other product useful in the economy, creates promising business
opportunities for the entrepreneurs.

14] Genetic Engineering and Biotechnology –

Application of Genetic Engineering and Biotechnology is
in many fields like in plant and animal kingdom, preservation
of human or animal’s umbilical cells for treatment of serious
diseases, regeneration of new body organ, preservation of organs
for transplant to save the life etc. This sector is the booming

Emerging Business Opportunities │ 47

sector, and it will grow many folds in future. Entrepreneurs may
explore this sector for business opportunity.

15] Organic cultivation –

The awareness about health and wellness has resulted in to
increase of organic food products among the people. This provides
a great scope in agricultural sector to cultivate the agricultural
crops, fruits, vegetables, medicinal plants etc. Entrepreneurs
may explore this segment to achieve their objectives.

16] Consultancy and professional services-

This segment is fast growing for the reason that that peoples
want to hire the services of expert for specific works so that
work is done in a precision way and within the shortest possible
time. For example, people like to avail the services of Chartered
accountant for ensuring that their financial statements are made
correctly, and they are fully complied with tax liabilities, or
of Architect for the drawing and designing from hotel, home,
hospital any other construction projects or of psychologists for
mental health or of Lifestyle couch and motivational speakers.
The scope is very wide, and entrepreneurs may focus to start
consultancy and professional services according to their
experience and expertise. The brand or image building is key of
success in this segment.
To sum up entrepreneurs may explore the above emerging
business opportunities along with the opportunity in the sectors
of their preference and select the most beneficial opportunity to
start their entrepreneurial journey.

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48 │ Dreamer to Entrepreneur
 CHAPTER 9

Establishment of an Enterprise -
Basic Steps
To start a business enterprise, the entrepreneur has to
constitute a structured organization such as A proprietor ship
firm having a proprietor / or partnership firm having minimum
two partners or Pvt Ltd company having minimum two director
or limited liability partnership having minimum two partner /or
public limited company having minimum three directors.
The setting up of an enterprise involves registration of firm/
company and other statutory compliances. The entrepreneurs
must connect with the concerned dept./agencies/authorities
for applicable procedural requirements. The services of service
provider/advisors may be availed for the purpose wherever
required to avoid statutory or other lapses and save time.
Single point clearance facilities have been set up by concerned
governments and the same may be applied. Most of the
registration and licenses are required to apply online and it will
be granted to you online. We discuss hereunder a brief detail
about basic registration procedure of all above constitution
of enterprises except public limited as it may require many
formalities, and statutory clearance and therefore it should be
done as per guidance of experts and company secretary. Here it is
further clarified that for all enterprises there are other permission
and statutory clearance are required hence it is recommended
to seek guidance of your mentor or experts or advisors from
time to time so that you are having all statutory registration and
clearances.

Establishment of an Enterprise - Basic Steps │ 49

Basic Registrations Requirement
Procedural Concerned Office Remarks
Requirement
Constitution
Proprietorship firm. State government. Shop establishment
registration
Partnership firm. Registrar of firms of [Applicable for every
state of government. enterprise]
Company (Pvt. Ltd.)
and limited liability Registrar of Registrar of firm.
partnership. companies.
Registrar of company
for Incorporation
certificate of
company /LLP.
Registration Dept. of Industries of Temporary
state government. Registration &
For industry or Permanent
Ancillary unit. Registration
before and after
establishment of the
unit.

For good and GST dept of GST registration.

services tax (State & state and central
Central]. government.
Patents &Trademark. Trademark Registry. Registration of
trademark.
Food product Drug and food dept. FSSAI License.
activity. of state Govt.
Medicine related Drug and food dept. Drug license.
activities. of state Govt.
Import and export Director general Import export
activities. foreign trade. registration cum
import export code.
For water & Air Pollution Control Clearance or
pollution Control. Board or Authorities. no objection from
these authorities,
wherever is
required.

50 │ Dreamer to Entrepreneur
 In addition to the above there are provisions to obtain
registration and clearance from specific dept. to which the
nature of your activity relates to such dept. For example, you
will require clearance from Rubber board for rubber products
and forest clearance for wood products.
Entrepreneurs also require compliance with Taxation
regulations enforced from time to time under the guidance of
their tax consultants as noncompliance carries fine and penalties
as prescribed in TAX LAWS.
The entrepreneur may seek guidance on the issue of statutory
clearances as the rules and applicability get changed from time
to time.
The above information shall surely help the entrepreneurs to
move on to set up their enterprises.

●●●

Establishment of an Enterprise - Basic Steps │ 51

 CHAPTER 10

Strategic Business Plan Preparation

The strategic planning for the entrepreneur is critical and
essential to run the business successfully. The entrepreneur has
limited resources in terms of time, finance and manpower. The
entrepreneur is going to put his money into starting the venture
and without proper planning this investment may come into risk.
Entrepreneur expects the business to make reasonable profit and
give returns on his investment. The opportunity to be ‘your own
boss’ is part of this return.
It is, therefore, necessary that enterprises select very carefully
the fronts for action and formulate all the strategies with due care
and calculated risk as the entrepreneur cannot afford to make
mistakes which will cost him in terms of time, money, and peace.

1. What Is Strategic Planning:

Strategic planning is a preparation of road map with action
plan keeping in view the production capacity, availability of
resources, funds arrangement, sales target, and goal of the
entrepreneur. Business planning also requires proper analysis of
the business environment, the products, processes and services,
the people involved, the target customers and entrepreneur
himself in a certain perspective.
i. Why The Planning Is Necessary:
Most enterprises are affected by the volatile and
competitive market conditions an entrepreneur should
plan for aggressive business strategies to compete with

52 │ Dreamer to Entrepreneur
 the competitor in respect of quality, services, and pricing
and at the same time keep proper provision for volatility
in the market. Continuous planning and re-planning are
necessary to reduce the risk to the great extent.
ii. Advantage of Strategic Planning for The Entrepreneurs:
Strategic planning depicts the purpose and right
direction to the entrepreneur to enable him to be well
informed with status of implementation and running
of his business enterprise so that he can make best
use of his resources and to take right decision at right
time. Strategic planning always has inbuilt priority and
time frame for variety of work involved and it makes
it easy for the entrepreneur to use his time in line with
stipulated priority and ensure to accomplish the work or
goal within the prescribed time schedule.
iii. Strategic Planning and Risk Mitigation:
The strategic planning will give an idea to the entrepreneur
about anticipated risk and accordingly the entrepreneur
will take the steps in advance for mitigation of such
risk if arises or he can keep his alternative plan [plan B]
ready to overcome on such risk which may hampers the
implementation and progress of his Enterprise.

2. Strategic Planning as Per Types of Entrepreneurships:

Strategic planning to be made as required for the type of
entrepreneurship which are discussed in related chapter. Every
type of entrepreneurship has some or other role of computer
system, internet, online sales, e-commerce, and other technology,
and same should find a place in the planning. Likewise planning
should be made keeping in view available resources, fund
position, backward and forward linkages Goal, targeted sales
and profit, budget provisions and factors which may affect
achievement of goal.

Strategic Business Plan Preparation │ 53

 The planning need not be complex, rather it should be clear,
simple and easy to understand and implemented. For example,
the sales target should be fixed considering the demand for the
product or services and depending on that production targets
are fixed but with cross verification of resources available and
production capacity. In the same way planning should give due
importance to external factors like change in policy by regulator,
people preference, market condition and competition. The goal
for entrepreneur is to earn the profit with mitigation of risk
involved.

3. Periodical Review of Actual Progress Against the

Estimation Made in The Plan:
Strategic plans should be reviewed, and actual achievement
should be compared with estimations from the management
information system [MIS], periodic returns, and feedback from
concerned officials. If there is a gap between actual performance
and estimation, the entrepreneur should examine the reason and
take necessary steps to remove the hurdles/shortcomings if any
at the earliest possible and decides further course of action.
To sum up, entrepreneurs should give due importance to
strategic planning for their successful entrepreneurial journey.

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54 │ Dreamer to Entrepreneur
 CHAPTER 11

Basics of Balance Sheet and Profit &

Loss Account
Every entrepreneur, irrespective of his educational
background, expertise and experience is supposed to know
to read the balance sheet and profit & loss account. These are
also termed as final accounts and some time as annual financial
statements of any enterprise. If an enterprise has a sales turnover
above the cut off limit, the balance sheet and profit and loss
account [BSPL] are required to be audited by the chartered
accountant for genuineness of underlying transactions as per
rules and regulations. The audited BSPL are accepted by tax
authorities to arrive at total income, taxable income, and tax
liability. The BSPL are basic documents asked by the investors,
venture capital funds, and bankers for study of the financial
health of the enterprise and based on that and other factors, they
take the decision for providing the funds for the project.
The profit and loss account indicates the operational result
of the enterprise and shows the related transaction of an entire
financial year, whereas the Balance sheet reflects the financial
position of the enterprise on the specific date. These documents
are finalized from the data available in trial balance of the
enterprise in which all financial transactions are recorded daily.
We sincerely advise the entrepreneurs to carefully select the
competent and experienced account to look after the accounting

Basics of Balance Sheet and Profit & Loss Account │ 55

aspects as well as to handle the taxation part of the enterprise, so
that the entrepreneurs can focus on the business development
for the growth of the enterprise.
The process of preparation of the above final accounts is
explained here under.

1. Profit and Loss Account

The Profit and Loss Account, as the name suggests, is prepared
to know whether the enterprise has made a profit or booked the
loss during a financial year or the period for which the profit and
loss is to be calculated. All entries of nominal accounts will be
posted into Profit and Loss Account. As an accounting rule, the
debit side of P&L account is for posting of all expenses and losses,
whereas credit side of P&L account is for posting of all incomes
and gains. The totals of the debit entries and credit entries when
accounted with each other will arrive at profit or loss made by
the enterprise during the financial year or the period for which
profit, and loss is to be calculated. If the credit amount is more
than debit amount the net result is the profit and debit amount is
more than credit amount the net result is loss. Finally, whatever
the profit or loss booked by the enterprise; it shall be carried over
to the respective balance sheet accounts.
After completing the above postings, the trading account
which is the first part of the Profit and Loss Account is prepared.
The trading account consists of opening stock, purchases, closing
stock, sales, other income like interest on deposit, returns of
goods and direct expenses relating to the purchase. Thereafter
the next part of PL account is prepared which shows gross
profit, all expenses, depreciation, interest, profit before tax, non-
operating expenses, income tax and net profit after tax.

56 │ Dreamer to Entrepreneur
A Typical P&L Shall Appear as Under:
M/S Ocean enterprises
Trading & Profit & Loss Account
(For the period from April 2022 to March 2023)
[INR In Lakhs]
Debit Credit
Particulars Amount Particulars Amount
Opening stock 100 Sales revenue 250
purchase 200 Closing stock 100
Gross profit [GP] 50
Total 350 350
GP brought forward 50
Salary and wages 5
water and electricity 5
depreciation 5
Administrative 5
expenses
Interest 5
Profit before tax 25
Income tax 5
Net profit after tax 20

Balance Sheet
After preparation of the Profit & Loss Account, the next step
is to prepare the Balance Sheet to know the financial position of
the enterprise on a particular date. The Balance Sheet shows on
the left side the liabilities of the enterprise and on the right side
it shows the assets of the enterprise.
Now to prepare the balance sheet all personal and real
accounts will appear on the Balance Sheet. The assets side will
consist of accounts having debit balances and, on the liabilities,

Basics of Balance Sheet and Profit & Loss Account │ 57

side will consist of accounts having credit balances. Thereafter
all assets and liabilities will be posted in respective head in the
Balance Sheet. The total assets and total liabilities of the balance
sheet should match each other. In case both the sides of balance
sheet do not tally with each other, that means some mistake is
happened in the books of accounts and it requires finding out the
mistake and correction of the same.

A Typical Balance Sheet Shall Appear as Under:

M/S Ocean enterprises
Balance Sheet
[As on 31st March 2023]
[INR IN LAKHS]
Liabilities INR Assets INR
Capital 100 Land and building 50
Reserve and 20 20 Plant and machinery 40
surplus
Add profit. 10 Total fixed assets. 90
Less drawing 10 Non-current assets 30
Unsecured loan 20 Current assets 100
Secured term loan 30 Inventory 50
Current liabilities 50 Receivables 30
Sundry creditors 20 Advance to 15
customers
Short term loan/ 30 Cash and bank 5
working capital balance
limit.
TOTAL 220 Total 220
Analysis of Final statements- Financial analysis of financial
statements is necessary to arrive at a decision whether the
financial position of the enterprise is strong, good, satisfactory, or

58 │ Dreamer to Entrepreneur
bad. For this purpose, an interrelationship between the balance
sheet figures and between the P&L figures is worked out. This
exercise is called ratio analysis.
The following important ratio are being discussed here:
1. Total Outside Liabilities to Tangible Net Worth= TOL/
TNW
Here TOL consists of all term liabilities such as secured
and unsecured loans and all current liabilities. The
tangible net worth consists of capital +reserve and
surplus = less intangible like good-will, patents etc.
This ratio gives an idea of how many times of TNW, the
total liability is there, on the enterprise. Say the ratio 4:1
means TOL is 4 against TNW 1. If this ratio is up to 4
1is considered good but above that it is not considered a
good ratio.
2. Debt to equity- Debt to equity ratio is the same as TOL/
TNW. Here debt means total outside liabilities and
equity means TNW.
3. Current Ratio – This is the ratio of current assets [CA] to
current liabilities [CL]. = CA/CL. Current assets mean
those assets which can be converted into cash in one
year and current liabilities are those liabilities which are
payable within the next year. The current ratio of 1.33:1 is
considered a benchmark ratio which shows that current
assets are 1.33 against current liability of 1, and therefore
current liability can be paid from current assets easily.
4. Net profit to net sales ratio - This is the ratio of net profit
to net sales, and it is expressed in percentage terms. = net
profit/net sales =x 100.
Suppose the value comes to 10% means the net profit is 10
percent of sales revenue and it is considered good. Net profit to

Basics of Balance Sheet and Profit & Loss Account │ 59

net sales below 10 % needs the strategy to improve the same.
To sum up, the balance sheet and profit and loss account are
the backbones of an enterprise, and entrepreneurs should always
keep their eyes on the figures that appear therein and study the
corresponding statistics, sales, and profit and keep watch on
receivables and payables account and wherever necessary take
the corrective action.

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60 │ Dreamer to Entrepreneur
 CHAPTER 12

Preparation of Project Report

Project report is a comprehensive document in which all
the aspects of business enterprises [hereinafter referred to
as “project”] are incorporated. It covers precisely technical
feasibility and economic/financial viability of the project. It gives
a fair idea about the project viability not only to the entrepreneur
but also to investor and bankers and thus become a most useful
document for raising funds for the business enterprise.
The important points to be covered in the Project are given
here in below, based on which a fair idea of preparation of project
report can be drawn. In case an entrepreneur does not have basic
financial knowledge, he may provide the required details to any
competent financial consultant and get it prepared.
The project report discussed the entire gambit of the project
in two sections.
1. Promoter
2. Project

Promoter:
This part covers all the information about the promoter.
i. General Information – Name, Age, address, contact
details. PAN no. Aadhar card no. educational
qualification, training, experience, and expertise.
ii. Character – This covers his general behaviour and
financial behaviour.

Preparation of Project Report │ 61

 iii. Competency [knowledge +skill]
iv. Capital – How much total capital or net worth of the
promoter and of which how much liquid capital he is
having to invest in his business.
v. Capability – This covers his capabilities to run the
business successfully.

Project Covers the Following Aspects:

i. Name of business enterprises, address of registered
office. Corporate office and factories, PAN no., GST no.,
contact details.
ii. Constitution like Proprietorship firm, Partnership firm.
Limited liability partnership, Pvt Ltd or Public Ltd
company, Trust or Society etc., Date of establishment etc.
Details of required statutory registration/ certificate or
clearances obtained.
iii. Project in brief, specifying the type of project like
business/ manufacturing/ services, Name of product,
which is going to be manufactured, Demand and
supply position of the product, Market competition,
risk involved and how the same will be mitigated, how
much sales and profit is expected and what are long term
prospects.
iv. Cost of project comprising of cost of land, cost of
construction, or cost of ready built premises, Cost of
plant and machinery, preliminary and post operative
expenses etc. working capital required.
v. Assessment of working capital requirement for the
project.
vi. Means of Finance mainly comprises of promoters’
contribution, unsecured loans from friends and relatives,
and credit facilities from bank or financial institutions by
way of term loan for capital expenses and cash credit

62 │ Dreamer to Entrepreneur
 facility for working capital requirement.
vii. Assumption made in the project like Total capacity,
capacity utilization, implementation period, commercial
operation date, cost of inputs, Sale price of the product,
number of days of credit to be given on sales and number
of credit days credit available on purchase etc.
viii. Technical feasibility of the project – The techno-
viability study is done to arrive at the availability of all
backward and forward linkages necessary for success
of the project. It covers brief description of availability
of land, or building and its suitability for the project,
Availability of water, electricity, manpower, Plant and
machinery, technology, raw materials, transportation
etc at reasonable cost and marketing of the product with
details of demand and supply position and sales model
like online sales and/or distributor or franchisee sales
model etc.
ix. Financial Viability – To arrive at the financial viability of
a project, a detailed study is to be done. For that purpose,
projected balance sheet and profit and loss account [here
in after called “financials”] for next five years is to be
prepared. The project will be judged on various financial
parameters such as breakeven analysis and the various
key ratio like Debt coverage ratio, current ratio, Debt
equity ratio, profitability ratio, benefit coast ratio and
internal rate of return which are to be calculated based
on the financial statements mentioned above. Sensitivity
analysis is also to be done considering a certain percentage
of decline in sales or increase in cost of inputs and its
effects on all the above financial parameters. If all the
above financial parameter shows that project is profitable
and shows that profit will be sufficient to service the loan
if any to be availed and leave sufficient balance of the
profit with the enterprises and entrepreneur, the project
is considered as financially viable.

Preparation of Project Report │ 63

WHEN THE PROJECT IS JUDGED AS TECHNICALLY
FEASIBLE AND FINANCIALY VIABLE IT CAN BE TAKEN UP
FOR IMPLIMENTAION
x. Project Implementation Schedule – This covers every
aspect from the beginning of the project till commercial
production is started. Like date of applying for license,
statutory registrations, date of acquiring premises,
date of completion of construction [if required], date
of ordering plant and machinery, date of installation of
plant and machinery, date of purchase of inventory, date
of commercial operation.
xi. Bank Loan Sanction and Draw Down Schedule - This
schedule should cover Name of bank, date for submission
of application for credit facilities to bank, date of sanction
[estimated if not sanction], draw down date and amount
for term loan, date of availment for working capital.
The draw down for term loan should be matches with
payment to vendors/suppliers for capital assets.
To sum up, we would impress upon the entrepreneur to start
an entrepreneurial journey with confidence once your project
report says that your project is technically feasible and financially
viable.

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64 │ Dreamer to Entrepreneur
 CHAPTER 13

Project Appraisal
The project appraisal is evaluation of the project to a certain
the viability of the project. The project is appraised by way of
detailed analysis of various aspects of the project.
1. Technical Feasibility.
2. Economic Viability.
3. Financial Viability.
4. Marketing Analysis.
5. Managerial Efficiency.

Technical Feasibility:
Entrepreneurs are supposed to study whether the product
can be manufactured or kind of services to be launched is
practically and technically possible and whether it can be given
a shape of fully functional and profitable venture with available
technology, plant and machinery, equipment, manpower and
other necessary resources.
Precisely technical feasibility means to evaluate the
availability of resources and the capacity and technology used
in the proposed plant and machinery and equipment to produce
the product or developed the services within the time schedule.
Once the entrepreneurs get convinced that the project can be
taken up and made a functional and profitable venture, they can
move ahead to create the needed facilities. While selected the P&M

Preparation of Project Report │ 65

and equipment, it is essential that the technical specifications of
P&M and equipment should be properly studied and compared
with the technology and technical specifications used in other
plants & machinery available in the market to produce similar
kinds of products. The know-how, technology used, and initial
training to operate are important aspect of high-tech P&M
and equipment hence it should be ascertained that whether
the manufacturer or their supplier shall provide the above-
mentioned support to the entrepreneurs. Entrepreneurs should
compare the cost, warranties, and after-sales service aspect
and whatever the better option comes, that kind of P&M and
equipment should be selected. The arrangement made to procure
the P&M and equipment should be examined. If the project is
proposed to be implemented in collaboration with other local
or foreign companies in that situation, collaboration agreement
should be executed with detailed terms and conditions, giving
respect to applicable laws.
The other aspect for evaluating the technical feasibility of the
project is as under.
i. Location of project and its connectivity with nearby cities
and transport hubs.
ii. Availability of land, topography of land, land is
developed, or it require land development, if so what
kind of work to be carried out to develop the land and
cost involved.
iii. Availability of facilities like water, power, logistic and
transport, sewage line, water treatment plant, sewage
treatment plant, telephonic and internet facilities.
iv. Availability of service facilities like machine shops,
fabrication units, electric repair shop, online common
service centres, postal and courier services and printing
and stationery.

66 │ Dreamer to Entrepreneur
 v. Availability of skilled, semi-skilled and unskilled
workers and arrangements to impart the training to such
workers in different trades.
vi. Availability of raw material, and consumables in required
quantity and quality.

Economic Viability:
Economic viability is the macro-economic impact of the
project on society and environment as a whole and on the
entrepreneurs. The project is said to be economically viable when
economic benefit exceeds the economic cost of the project. The
project may have a positive impact on the life of a person not
connected directly with the project. The revenue generated from
the project may be less than the actual benefit it gives to society.
For example, a good nicely built road project may benefit in terms
of speed, saving fuel and time by paying a small amount of toll
tax. It is important to analyse that the project and its location is
in fine tuning with Government policies on industrialization and
environmental policies and whether it is entitles for government
incentives, grant in aid etc. which may directly affect the project
cost to be meet out by the entrepreneur. There are some more
aspects of economic viability such as analysis of required raw
materials, installed capacity, estimated capacity utilization, sales,
expenses, and profits. Demand for the product to be carefully
studied as it will directly impact on the achievement of estimated
sales and ultimately earnings from the project.

Financial Viability:
The financial viability of the project is analysis of requirement
of funds, means of finance, estimated and projected sales and
profitability of the project. In any project the first thing that is
required is the arrangement of finance, being the main input of
the project, which brings all the backward and forward linkages
together. Therefore, entrepreneurs must analyse financial
viability in all its aspects as discussed here under.

Project Appraisal │ 67
 1. Project Cost - As a first step item wise assessment of
the cost for fixed assets, such as land, building, plant
and machinery, equipment, installation of plant and
machinery, electrification, furniture, and fixture, are to
be made. The pre operating and post operative expenses
and interest during the moratorium period [if the bank
loan is to be availed] shall also to be included in the
project cost. The margin required for working capital
may be considered as part of project cost, but it should
come from promoter’s contribution to the extent of 100%.
2. Means Of Finance – Means of finance will be 25% of
promoter’s contribution on capital cost and 75% will be
financed from banks as a term loan in normal course.
The entire working capital margin shall come from the
promoter’s contribution.
The entrepreneurs should carefully analyse each item of
project cost to consider it for the project.
3. Working Capital Finance - The working capital finance
is that amount of funds which are required for one
working capital cycle or operating cycle of the enterprise.
It starts from cash which will be used to purchase the
raw material [RM] and then it will be converted to
finished goods [FG]which will sold in cash and the cycle
is completed but some time FG is sold in credit, and it
becomes receivables, when receivables get realized it
will again convert into cash. This working capital cycle
goes on and on. To continue the working capital cycle
the adequate of working capital is must to continue the
business operation. The proper assessment of working
capital is discussed in the chapter on working capital
Management.

68 │ Dreamer to Entrepreneur
4. The profitability of the project is the most important
pillar. The estimated financial statements [FS] such as
balance sheet and profit and loss account are prepared
for the next 5 years. The FS are analysed on various
financial parameters and ratio of which some important
parameters are explained here under.
i. Breakeven Point - Every unit has the installed capacity,
but capacity utilization may be less. This BE point will
indicate that on which level sales value and cost will be
equal. If BE point is lower, better is the project financial
viability. In other words, on BE point there will be no
profit or no loss situation. In a separate chapter breakeven
analysis is discussed in detail.
ii. Net Present Value [NPV] – This indicates what is the
present value of future income. It is calculated by
discounting of cost and benefits by discounting factor
at the desired rate of return [IRR] which is considered
viable. In general, 15% IRR is considered viable. After
discounting cost and benefit for each year till life of the
assets [usually up to 9 years] or repayment tenor, and
thereafter sum of each year NPV is calculated for all
years. If NPV of benefits is more than NPA of cost, it’s
called Positive NPV. Means the project is financially
viable.
iii. Benefit Cost Ratio - When NPV of benefits divided by
NPV of cost and the value come more than 1, the project
is considered as financially viable.
iv. Internal Rate of Return [IRR] - The IRR of the project
indicates at what rate at which the investment is return
by calculating the present value of investments and
future receipts. It is a rate of return received on the
investment made in the project. If the IRR is more than

Project Appraisal │ 69
 15% the project is considered financially viable. It can be
calculated on easy templates available online.
v. Debt Service Coverage Ratio [DSCR] – If the term loans
are to be availed from bank or any financial institutions,
a good average DSCR makes the proposal good for the
finance. It is the ratio of amount of cash profit and the
liability of term loan instalment and interest. Simple
formula is Profit after tax + depreciation + interest on term
loan/ term loan instalment during the year + interest on
term loan. The average DSCR should minimum 1.5:1
vi. Net Profit Ratio – Net profit ratio is calculated in terms
of net sales. Its calculation is done as per formula - Net
Profit/Net sales = x 100= It gives net profit %. If this
net profit comes to around 10 %, it is considered a good
profit.
vii. Return On Capital Employed Ratio [ROCE] – It is
calculated to know what is return on capital employed in
the project. It calculated with the help of formula – EBIT/
Capital employed [ here EBIT is earning before interest
and tax and capital employed is total assets -current
liabilities], the value then multiplied by 100 to express it
in percentage.
viii. Other Important Ratios - There are some other important
ratios like D/E ratio, current ratio etc. which all should
be within the acceptable range to consider the proposal
as financially viable. These ratios are explained in the
chapter on balance sheet and profit and loss account.
The financial analysis to arrive at financial viability of a
project require the sound knowledge of finance, it is therefore
advised that the entrepreneur may avail the services of subject
expert and once it adjudged that project is financially viable, he
may move ahead with further analysis of project in respect of
other points.

70 │ Dreamer to Entrepreneur
Marketing Analysis:
Entrepreneurs are expected to do market research and
identify the market as well as customers segment for their
products. Success of entrepreneurs ultimately comes from the
sale of the product to the customers in the identified market. It
is therefore important to analyse the market where the product
is having demand for sale to the customers. If the entrepreneurs
are satisfied with the demand in the selected market to achieve
the estimated sales, the project is treated as viable from the
marketing aspect. The marketing aspect is discussed in a separate
chapter of this book for the knowledge of the entrepreneurs.

Managerial Appraisal:
It is a proven fact that management competency is an essential
element in making a successful enterprise. Because of such a
prime importance of managerial competence in the success of
enterprise the investors or bankers also look for managerial
qualities in the entrepreneur before putting their money in to
the projects. Many times, good project fails which are otherwise
feasible because of lack of managerial qualities and a poor
project may register a success with good managerial qualities.
The entrepreneur should carefully select the employees in the
management cadre who have managerial qualities and lead the
team as leader. The entrepreneur himself should also develop all
the qualities of highly successful managers and thought leaders
to run the business successfully. If an honest entrepreneur is
satisfied with his own managerial competency and qualities of
thought leader, he may move on to take up the project confidently.
It’s advisable that for highly technical projects the entrepreneur
should engage the competent consultancy company to conduct
techno-economic viability [TEV] study of the project and if in
TEV study the project viability is confirmed, the project may be
selected for implementation.

Project Appraisal │ 71
 To sum up, Entrepreneurs should carefully appraise the
project on all the above points, and if it is found that the project is
technically feasible and financially viable and finding regarding
other aspects of project appraisal are also positive, the project
will surely be successful venture.

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72 │ Dreamer to Entrepreneur
 CHAPTER 14

Intellectual Property Rights [IPR]

IPR means the legal monopoly of the creator of the class of
the property or products or processes. Such properties, products,
or processes [IP] come into existence because of the application
of human intellect or mind of the creator. Therefore, the creators
have legal rights on their IP, and they should be legally protected
from infringement or stealing of their IP. That means without
prior permission of the creator no one can use his/her creation.
IPR have made applicable in India and many other countries
when world trade organization came into existence in the year
1995. The IPR gives protection from infringement or stealing for
different periods to the innovator depending on the category in
which the IPR registered and rules of the countries where the IPR
registered. In the WTO, agreement the trade related intellectual
property rights [TRIPS] covers the different form of IPR, like
Patents, copy rights, trademarks, new plant variety, integrated
circuits, Industrial designs, etc. Some of them are discussed here
under-.

1] Patents. –
Patent is the right of the innovator granted by the concerned
government offices, for their creativity and intellect, for limited
period, by way of exclusive rights to the innovator, to make, use,
exercise, and sale their products and process made by them as per
their IP. Like other property, the patents being an exclusive right
can be sold, licensed, transferred or willed to other interested

Intellectual Property Rights [IPR] │ 73

party. Patents can also be offered as collateral like their other
assets. The patent can be classified in to 3 categories as follows. -
i] Utility patents – It broadly covers the following
innovations-
[a] Processes- It covers innovations in development and
application of new technology or improvement in
existing processes of production, testing, research,
analysis etc.
[b] Machines - It covers innovation of advance plant and
machineries to produce the high-quality products
in bigger quantity with high installed capacity and
advance instruments to give quick and accurate
results and sophisticated equipment to make the
production process smooth and easy.
[c] Manufacturer - It covers the application of innovation
of machinery and process into the manufacturing of
products.
[d] Composition of matter – It covers the new chemical,
medicinal or pharmaceutical or nutraceutical or
other chemical products, having better use for the
peoples and which are not grown naturally.
ii] Design patents – It covers the innovative ornamental
design of articles like jewellery, shoes, clothing, bicycle,
which is a part of shape or configuration of an object
and cannot be separated from it. This type of patent
protects only the outside appearance of the product. If
the innovators want to protect the inner structure and
functionality, they must file utility patents.
iii] Plant patents – It protects the new and distinctive variety
of plants. The plant should be asexually produced by
cutting or grafting and it should not be produced by seed
or by tuber propagation. Such a plant should not exist in
an uncultivated state or grow naturally.

74 │ Dreamer to Entrepreneur
 The utility and design patents can be filed in India as well as
in many other countries wherever provision exist. There is no
provision of plant patent in India but innovators if they want can
file in the countries where such provision exist.

Eligibility criteria-
The eligibility criteria for applying for Patent are as under –
i] Genuinely true and first innovator himself.
ii] Assignee of genuinely true and first innovator, having
right to make such application on behalf of genuinely
true and first innovator.
iii] Legal representative of expired genuinely true and first
innovator, who was eligible for such application before
he or she expired.

2] Trademarks. –
The trademark is any mark by name, or symbol, or image
or word, phrase, which differentiates the products made or sold
by one entity from the products manufactured by others. The
trademark IPR is registered for the initial period of 10 years
and thereafter it can be renewed every 10 years till the products
are manufactured or sold by the entity. It gives the support to
the entity to position the product in the market and customers
get assured about the quality of the product. The registered
trademark is always distinctive and deceptive of similarity.
Copying of other trademarks makes the person liable for legal
action. Trademarks are useful in brand building, but trademarks
may be a small part of the brand whereas brand refers to an
overall image of the company and therefore it may include
trademark and things like logo, customers feel good reactions
etc. Branding the business is one of the essential parts to win
the loyalty of the customers. The entrepreneurs must obtain the
trademark for their products to get the legal protection against
copying their product and at the same time build the brand and

Intellectual Property Rights [IPR] │ 75

brand image of their enterprise to make the loyal customers by
making quality products available to them.

3] Industrial designs-
The industrial design registration protects the unique look
of the product or articles. The protection of registered owner
is available against the visual features termed as design which
comprises of shape, pattern, and ornamental appearance or
combination of any two of these features.

4] Copy rights. –
Copyrights relates to protection of creative work of the
creator in relation to art and culture like literacy, music, films,
plays or drama etc. However, a person having the copyright
can authorize others to use the copyright items as per his own
discretion. It may be noted that there is no copyright on an
idea or concept if the idea or concept is used in a different way.
Likewise, there is no copyright on transmission of live events.

5] Integrated circuits-
The integrated circuit registration comes under IPR and
protects the chip design and material used to develop the
integrated circuit. In India it is protected under Semiconductor
integrated circuit layout design [SICLD] Act2000. Innovators
can make commercial use of their innovation and have legal
protection in case of any infringement noticed by them.
To sum up, the entrepreneurs should take protection as per
intellectual property rights by patent and trademark registration
of their product/process as per provision of law and register for
protection of integrated circuit, plant patents, designs, or any
other required protection available and applicable in your case.

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76 │ Dreamer to Entrepreneur
 CHAPTER 15

Fund Raising for Finance to

Entrepreneurs and Startup
Enterprises.
Funds requirements start from the start of startup
entrepreneurial journey, fund requirements are always a purpose
driven which are given here under-.
1. Market research and idea creation.
2. Validation of ideas and Prototype development.
3. Statutory registrations, licenses, and clearances.
4. Product development.
5. Appointment of suitable employees.
6. Purchase of land and factory building or shed and office
expenses.
7. Purchase of plant and machinery and equipment.
8. Working capital of one operating cycle including
administrative, marketing and sales expenses.

Sources of Funding:
1. At First Stage or Market research and idea creation
Stage:
At this stage outside funding is not available to
entrepreneurs and they must arrange the funds from
their own sources.

Fund Raising for Finance to Entrepreneurs and Startup Enterprises. │ 77

 2. At Second Stage or Seed Stage:
Validation of ideas and Prototype development. At this
stage, the prototype is ready, and entrepreneurs move
ahead to conduct the market study and do the trial run
to ascertain the demand of product/process or services
usually referred as proof of concept [POC]. At this stage
the entrepreneurs need the fund to engage the mentor
and create the team of employees, formation of business
entities, obtaining statutory licenses, certificates and
clearances, business plan preparation with estimated
balance sheet and P&L account for 3 years and estimated
profitability statement for proposed repayment period,
detailed project report preparation, Techno economic
viability [if required], thereafter initiate the process for
office and factory set up. For all the above purposes
funding shall be required. At this stage funding shall be
available from following –
i. Incubators – Incubators work is mostly delegated
to reputable institutions and universities where
a separate incubation cell is created to assist
the entrepreneurs from validation of concept to
launching of the product. These incubators hold the
hands of entrepreneurs and guide them from time to
time. They provide the funds in the shape of grant
and the debt to meet the fund requirement of the
enterprise.
ii. Seed Fund Scheme – Government has created the
seed funds and they are managed by well-known
public sector financial institutions. These funds
provide seed capital to the entrepreneurs at very low
interest rates and without any collateral security.
iii. Angel Investors – These are private investors, and
they invest in equity in the startup having potential
of fast growth and create value on their investment.

78 │ Dreamer to Entrepreneur
 The entrepreneur needs to pitch desk of their project
in brief covering all the points, especially the future
out looks to the investors in some conference, on
video or in person and submit a detailed proposal
to them and convince them to make the investment.
Entrepreneurs having good proposals will surely get
the investment from angel investors.
iv. Crowd Funding – This refers to funding of small
amount from so many people by online crowd
funding platforms. This kind of funding may
contribute the funds for some promising projects
but for most small projects the fund collection in this
mode is always a challenging task.
3. At Third Stage or Operational Stage:
At this stage factory and office set up is completed,
commercial production is started, distributors, dealers
and stockiest are appointed and product/process
and services launched in the market identified by the
entrepreneurs, and business must start at full swing. At
this stage major fund requirement arises. The following
sources provide funding at this stage.
i. Venture Capital Funds – These funds are set up
with the intention of making an investment by
way of equity participation, having potential for
high growth, a bright future outlook and creating
value for their investment in a short span of time.
These funds extend their support as a mentor to the
enterprise once they make investment in it.
ii. Venture Debt Fund - These types of funds provide
private investment by way of debt generally along
with venture capital fund or angel investors but
exceptionally without a participation of venture
capital fund or angel investors. The debt raised by

Fund Raising for Finance to Entrepreneurs and Startup Enterprises. │ 79

 this mode will be the interest bearing and repayable
as per terms and condition mutually agreed by the
debt fund and entrepreneurs.
iii. Banks, Non-Banking Finance Company [NBFC],
And Financial Institutions:
Banks and financial institutions are having
a proactive approach in funding start up
entrepreneurs. Entrepreneurs need to submit a well
drafted credit proposal to the bank along with the
project reports, all statutory clearances, and other
documents as per the requirement of the bank.
Banks provide the funding by way of term loan for
creation of fixed assets and repayable in 5-7 years
depending on profit generation and working capital
limit for one working capital cycle as running credit
facility, bills discounting facilities, export finance by
way of pre shipment and post shipment credit and
non-fund-based facilities like letter of credit and
bank guarantee. NBFC provides term loans only.
The Financial institutions set up under government
support are also provide term loan only.
The details of various credit facilities available from
the Banks are given in the Chapter on Banking in this
book.
iv. CSR Funds:
Many big companies have huge CSR funds, such CSR
funds are created for the purpose of social causes.
If the products/process/services are for the benefit
of society at large or for benefit of poor section of
society, women’s and child development, care of old
age people, resolving some environmental issues
etc., the CSR fund may provide grant in aid to such
start up enterprises.

80 │ Dreamer to Entrepreneur
4. At Fourth Stage or Scale Up Stage:
This is the stage at which business shall start growing
fast and achieve a new milestone. At this stage venture
capital funds, and some private equity or investment
fund may invest in fast growing start-up enterprises.
Banks will also consider enhancement in working capital
limits, in line with business growth.
5. At Fifth Stage or Large Scale Expansion or Exit Option
Stage:
We may discuss the above stage in the following points-
i. Merger or acquisition - At this stage startup
entrepreneurs will acquire or merge some entity and
make their company a big company with the growth
of business many folds OR they may choose to sell
their shares and merge their company with another
company provided they gets a good valuation of
their company.
ii. Initial Public Offer [IPO]:
The promoter may dilute their equity and go for
public offer, at the book value of shares or at a
premium as decided in consultation with manager
of issue of shares and get the funds from the public
to expand the business of the company. The shares
will get listed on the stock exchange and traded in
the market.
iii. Liquidation or pledge of shares by promoters:
This is one of the ways of funds arrangement in
which promoters dilute their equity and sell their
shares to venture capital funds or investment funds.
Alternatively, the promoter may pledge the shares
to banks or NBFC and raise the loan to meet their
financial needs.

Fund Raising for Finance to Entrepreneurs and Startup Enterprises. │ 81

 iv. Issue of Debentures:
The entrepreneurs in their company may raise funds
by issue of debenture. These are debt instruments,
and they may be convertible into shares or non-
convertible debentures payable at maturity.
However, interest may be paid as per prospectus
of issued at the time of issue of non-convertible
debentures.
To sum up, various fundraising resources are available
to entrepreneurs. To explore the appropriate resource for
fundraising, the entrepreneurs should assess the stage-wise
fund’s requirement, select one or more investors or funds
providers, and, if required, a bank or NBFC. They will require
to prepare a good pitch deck and quality proposal for investors
or a credit proposal for banks or NBFCs to raise funds for their
enterprises.

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82 │ Dreamer to Entrepreneur
 CHAPTER 16

Business Growth, Product

Diversification and Expansion
There are several ways to start or grow your business.
Whatever the options available, an entrepreneur sitting down to
make decisions should consider the best options that align with
their primary goals.
The purpose of this section is to first understand some
important business growth strategies. The list is indicative and
not exhaustive and is for informational purposes only.
Some ideas of how to expand or grow your business, among
other options. Some possible growth strategies are enumerated
below.
The one of the classic growth strategies models is combination
of Products and Markets, which is as under:
1. Market penetration.
2. Market development.
3. Product development.
4. Diversification.

Market Penetration:
This strategy means the company aims to sell more of its
existing products in the markets where it already operates but at
the same time it reaches up to wider public. This will not require

Business Growth, Product Diversification and Expansion │ 83

us to put more burden on resources and effort on sales and
marketing to drive increased revenue. In this way, the company
is trying to increase its market share. In general, this may seem
somewhat less risky as the company already trades in the same
markets and products, but there may be limits to the growth that
can be achieved with this strategy.

Market Development:
This existing product/new market strategy occurs when a
company decides to sell an existing product in a new geographic
market. For example, it may mean selling existing products into
new international markets, or into new territory of the domestic
market. In this model the company has to spend on sales and
marketing to reach new consumers of new market to purchase
its products/services.

Product Development:
On the other hand, this strategy requires the development
of new products or modification with or without betterment in
quality to be sold in existing markets. This can be considered
a very common process as companies cannot rely on the same
single product range to maintain their presence and growth. In
the consumer goods retail industry, companies stay in touch
with consumers and innovate their product lines in competitive
ways to keep up with specific trends, market needs/ customer’s
preferences, etc. Developing new products/making modification
in existing products, which meet consumer needs requires a
thorough understanding of market trends.

Diversification:
Diversification is often seen as a risky strategy when a
company develop and sells a new product/or product range to
all together new class of customers and in new domestic and/or
overseas markets. The reasons behind such business strategies
may be increasing opportunities identified by the company
and relied on such new business opportunities of growth for

84 │ Dreamer to Entrepreneur
the company. This seems a risky approach compared to other
approaches, and therefore the company needs to carefully assess
its capabilities before jumping into new products and new
territory, regardless of its expertise in conducting their business
successfully.

Franchisee Business Model:

Entrepreneurs may appoint Franchisee for the specific
territory is viable options for business growth. In this model,
the entrepreneur shares proven ways to build the business to his
franchisee in the as per approved business plan of their company
to run their business effectively. The franchisee then appoints the
dealers and distributors to cover the entire territory. In this model
stock and are remain in the books of franchiser and all expenses
including marketing shall be also to be borne by franchiser. The
franchise shall get the commission for the business he does from
his end. The franchisee and franchiser shall enter into the written
contract specifying terms and conditions agreed mutually which
will legally bind both the parties.
Export business- In the present era the global market is open
up to every business subject to compliance with certain rules
and regulations of the buyer and seller country. Entrepreneurs
may explore the oversees market to sale their products easily.
There are export promotion councils who promote exports. The
government also promotes export and gives many facilities to
the exporters. Entrepreneurs will require an export import code
from the director general of foreign trade. Once this is done, he
can find out the customers in oversees country from various
business councils/ Embassy of importer’s country. After finding
out the customer and if he is ready to purchase the goods, the
Entrepreneur may contact the clearing, freight and forwarding
agent and ascertain the cost of export depending on where the
goods are delivered. At this stage, an entrepreneur may quote
the price of his goods and mention the freight, clearing and
forwarding charges if it is to be borne by an exporter entrepreneur.
Entrepreneurs must explore the possibilities to start selling their

Business Growth, Product Diversification and Expansion │ 85

products in the international market for their higher sales and
higher profit margin.

Selling of the Products on Online Platform of E. Commerce

Companies:
This is another very good opportunity for entrepreneurs to
sale their products on online platforms of E. Commerce companies
like Amazon and Flip cart and other e commerce companies OR
entrepreneurs themselves can create their own website. This will
open up the market in the entire country when the entrepreneur’s
sale their products online. Here another advantage is that there
are no credit sales in this model and entrepreneurs will get the
sale proceeds within the period fixed by the online platform
prompter company. Entrepreneurs can run their advertisement
or marketing campaign to establish their brand and increase
the growth in sales turnover and profit. Entrepreneurs while
selling on online flatform can explore the possibilities of
selling products which are manufactured by other companies
by purchasing the products wholesale or directly purchasing
from the manufacturer. They can even arrange the products to
directly send to facility centres of E commerce companies like
amazon facility centre, who will store the products and dispatch
the same to the customers when they receive the order. Some
precautions are required in trading on E commerce platforms for
new entrepreneurs who simply want to start trading activity on
Ecommerce platform.
1. Products should be selected carefully after studying
bestselling products, difference of price of the product if
purchased from manufacturer in bulk and its selling price
on Ecommerce platform. Also Work out the packing,
advertising, and selling expenses and then calculate the
profit. Entrepreneurs may select such products which
give at least 15% net profit.
2. After selection of product list, the product on Ecommerce
platform. In the beginning start the business from 1 to

86 │ Dreamer to Entrepreneur
 3 products and thereafter you may increase to more
products.
3. The key word selection should be such that when a
customer searches the product, your product should
come in upper level of products displayed by the online
platform.
4. You should mention description of the products in such
a manner that after reading the description by customers,
the customers make up their mind to buy the same.
5. The photograph of the product should be from all the
angles and the photoshoot of the product preferably
should be done by professionals as the customer
purchases the products on seeing the products in images
only.
6. The packaging of the products should be attractive and
as per trend in the market for similar products keeping
in view the choice of consumers.
7. Products should not be from the category like electronics
where big players are there and also the categories in
which return of products are more due to sizes or colours
like textiles, readymade dresses etc.
8. The product should not be heavy, say more than 3 kg in
weight, otherwise it carries the delivery charges more.
9. The products should be in the reasonable price range say
between INR 500 TO INR 5000, as too lower range may
not be much profitable due to selling expenses and too
high price item will require more funds to purchase in
the beginning in bulk from the manufacturer.
10. Entrepreneurs should create their own brand and
logo. They can also get their brand registered with the
concerned authority.

Business Growth, Product Diversification and Expansion │ 87

 The above precautions are necessary for entrepreneurs who
are beginners, but they can expand their online business and add
more and more products once they get the experience.

Merger and Acquisition:

Mergers refer to the situation when two or more enterprises
combine or merge into one enterprise whereas in acquisition one
enterprise is acquired by another enterprise. The merger and
acquisition by and large convey the same meaning and therefore
the same are narrated together. Now a days for mergers and
action use of takeover is more frequently used in business circles.
This is the common business strategy now a days to expand the
business. Some of the benefits are as below.
1. It increases the growth of the organization, the customers
of the merged entity also become the customers of the
entity in which the other entity is merged.
2. It will help in the diversification of products and new
markets will be open up.
3. The size of the balance sheet increased with increase in
capital, topline and bottom line.
4. In case both the entities were in the same activity and
compete with each other, but after the M&A there will be
one entity and therefore no mutual competition.

Joint Venture:
When two companies join hands to form a joint venture to
execute a particular type of business activity. This is temporary or
restricted partnership, to complete the specific work or business
activity. A joint venture is subject to the terms and conditions of
a joint venture agreement. This kind joint venture can be formed
between two Indian companies or between one Indian company
and one foreign country.

88 │ Dreamer to Entrepreneur
 Joint venture benefits both the promoters’ companies. Some
of the benefits are outlined here under.
1. Eligibility in Acquiring the Contract – Many time the
companies do not fulfil the criteria to bid for various
contract such as turnover, capital, experience etc. but
when two companies form the joint venture, they will
meet the criteria of bid and get the contract.
2. Technology – one company may be technology driven
and therefore bring the technology required to execute
work of specific venture and another company may
have in depth knowledge of market and have competent
manpower and experience to execute the work. If both the
companies form the joint venture, they will successfully
complete the work or specific contract.
3. Area of Operation - The joint venture can conduct the
business in the operational areas of both the promoters’
companies.
4. Capital Contribution and Risk and Profit Sharing
– Both the promoters’ companies will contribute the
capital in joint venture which will enable them to take
up capital intensive projects otherwise it might not have
been possible by one promoter company. The promoter
will share the risk and rewards as agreed between them,
in the joint venture agreement.
To sum up, the entrepreneurs should make their all efforts
to grow their enterprise in terms of sales and profit using all
available opportunities.

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Business Growth, Product Diversification and Expansion │ 89

 CHAPTER 17

Package Designing and Packaging.

In the present era, packaging of products in properly
designed packages is playing an important role in domestic and
international business. Proper packaging is having following
advantages.
1. Safety from any damage in transportation and handling.
2. Safety from climatic effect of different climatic zone.
3. Compliance with packaging criteria of different countries
can be met.
4. Environmentally friendly and recyclable or biodegradable
packaging material can be used as per rules of different
countries.
5. Easy to handle the packaged product in entire logistic
chain.
6. Packaging makes the product attractive, and the product
can pack as per customer choice. This makes higher
customer’s satisfaction.
The following are some of the important points to be noted in
the package design/selection of packaging.
1. Product Specific Packaging:
Designing product specific package require a detail
analysis from various angle like customer’s choice and
as per specification if any provided by customers, brand
building, safety in transportation and handling in various

90 │ Dreamer to Entrepreneur
 logistic chain, Effect of climate change in different zone
and the material should be environmentally friendly
or biodegradable as per international norms and the
country specific guidelines.
In the case of food and drug products, in addition to all the
above criteria, the guidelines of food and drug controller
and country specific norms should be followed. Idea of
extra care in packaging of above products, is to protect
their effectiveness, physical and chemical properties of
all the ingredients such as colour, taste, aroma, and also
to protect the products from dryness, moisture, light,
temperature, chemical reactions, infective agents such as
bacteria, fungi, parasites, and infestation agents such as
insects and pests.
Entrepreneurs need to choose cost-effective packaging
and modify it from time to time but of course keeping
in view all the above criteria for domestic as well as
international markets.
2. Logistic And Distribution Specific Packaging:
Design and packaging material and packaging method
and size and dimension of packaging as per suitability
of logistic and distribution chain is important aspect
in the packaging. Bar code symbols are necessary on
every packaging as per recent business trends. Likewise,
brand name and logo [if it is finalized] need to be fixed
on the packaging. The opinion of dealers/ distributors
and customers if any should be kept in view regarding
packaging. The following aspect will further add value
to the packaging.
i. Quality of packing material.
ii. Description of material inside the package.
iii. Suitability for display of nutritional value in the case
of food products.
iv. Suitability for display of contents in drug items

Package Designing and Packaging. │ 91

 v. Suitability of display of Warning and precaution
vi. Suitability of display of bar code, price license, brand
and logo.
vii. Marking for unpacking or unboxing on the packaging
to avoid damage to the product.
3. Convenience And Choice of Consumers:
The consumers’ choice or preference in packaging
differs from person to person. We recommend that
entrepreneurs take a broad outlook on graphics and
design of packaging depending on the choice of majority
of consumers and different market of their products. We
mention hereunder some of the aspects of the packaging
which are commonly preferred by the consumers.
i. Easy to carry, handle, open effortlessly or with
opening devise provided with the products,
close, empty, reuse, environment friendly and
biodegradable etc.
ii. The cost of packaging should be reasonable so that
the ultimate cost of the main product should not
increase unreasonably.
iii. Packaging design should be appealing and attractive
with brand and logo etc. when the products are
displayed on consumer’s shelves in the mall or
supermarket or in retail store in comparison to the
same products of competitors and as per market
trend.
To sum up, we impress upon the entrepreneur to give utmost
importance to package design and packaging of the products
as per market trend and make it more appealing and attractive
than the competitors to position the product high, for capturing
maximum market share of same product range.

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92 │ Dreamer to Entrepreneur
 CHAPTER 18

Costing and Pricing are key Element

of Profit
Understand costing:
Entrepreneurs to understand correct calculation of
production cost of their products and services to decides on sales
price to make the profit.
The cost of the product should include the cost of raw materials,
cost of consumables, proportionate depreciation, salary and
wages of factory employees. Water and electricity, finance cost
like interest and other charges, stationery and printing, cost of
packaging, transportation cost of raw material up to the factory,
rent if any, repair and maintenance and insurance cost will be
cost of production and when the administrative cost like salary
of administrative staff, traveling. Advertising and Marketing
expenses, cost of after sales and service period etc. are added
it will become the cost of sales of the product. The cost of sales
as explained above or in other word total cost of product finally
worked out is important to decide the selling price of the product
while keeping the profit margin. It is worth understanding the
direct and indirect types of cost at this juncture.

Let’s understand direct cost:

When the cost readily identified and which are directly
related to produce the product is called as direct cost like cost
of raw material, consumables, wages, and bonus paid to the

Costing and Pricing are key Element of Profit │ 93

labours, transportation of raw material to the factory, cost of any
part directly purchased to assemble in the main product.

Important precautions in the costing:

Entrepreneurs must carefully understand that the costing
is the most crucial part of any business enterprise. It requires
detailed studies of the production process and intricacies with
regards to sales. There are many items of expenses or cost which
might have been missed out while calculating the total cost of
products. We give here under the cost which needs careful
consideration.
1] Wastage of material during the production process.
2] Rejection of products does not confer to quality test, or
some defects are noticed after production of the product.
3] Rejection, return and replacement of the products by the
customers.
4] Sale on the credit which blocks the funds and leads
to finance cost. The realization of some percentage of
credit sales may be delayed or may not be recovered at
all. Hence it all costs the company or enterprise and for
those necessary provisions to be made.
5] Payment of GST or any other taxes, by the enterprise
while purchasing the raw material, but the input credit
will be received when the product is sold. This will lead
to finance cost to the enterprise.
To sum up, it is impressed upon the entrepreneurs to
undertake the costing exercise and find ways to reduce the cost
of products carefully. Once the final cost of products has arrived,
then decides the selling cost after keeping the profit margin.
They should also study the pattern of the sales price and quality
of products of competitors so that they can keep the sales price
competitive for their products to capture a good market share.

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94 │ Dreamer to Entrepreneur
 CHAPTER 19

Maintain High Quality Standards

“Customers pay only for what is of use to them and this gives
them value. Nothing else constitutes value” – Peter Drucker
In the prevailing economic situation, new approaches are
called for. Companies are adopting a new system of technology
and management for both internal and external purposes. The
use of total quality Management [TQM] system for developing,
manufacturing and supplying the required products and services
meeting customer expectations and satisfaction becoming more
important for success of an entrepreneur.
Quality management has thus become a most important
management function. Entrepreneurs need to take the
appropriate actions to identify and understand customer’s needs
and ensure that the same are met through quality products and
services. Market trend shows that quality, cost effectiveness and
time bound delivery are important points for the entrepreneurs
to register success in domestic and export markets.
Progress of both domestic as well as export-oriented
enterprises are very necessary for economic development of
the country and to achieve the good growth in sales turnover of
these enterprises the quality products and services which meets
customers’ needs are imperative. Export is vital for economic
development thereby foreign currency is received in the country
which will be utilized for payments of imports and surplus is
kept for future requirement. Therefore, it’s more important for

Maintain High Quality Standards │ 95

Export oriented enterprises to maintain the quality of products
and services because inferior quality can damage the reputation
and image of the exporter entrepreneur and of the exporting
country in the eyes of importer and importer country.
We quote hereunder what” W.Edward Deming” in his book
“OUT OF CRISES” says about customers.
1] “Dissatisfied customers does not complain: he switches.”
2] “It will not suffice to have Customer that are merely
satisfied. Customers that are unhappy and some that
are merely satisfied switch. Profit comes from repeat
customers – those that boast about the product or
service.” –
This is also true that once the customer switches to another
seller he may not come back to you in normal course of business
easily.
In this context, we impress upon the entrepreneurs to
maintain the quality of your products and services up to the
satisfaction of your domestic as well as overseas customers to be
a successful entrepreneur.

Quality is a key to success:

Quality denotes all the specialties of the products and
services that make them superior and excellent in comparison
to products and services available on the market front. Another
aspect is the products and services should be made available
consistently of superior quality at competitive, affordable prices
and delivered within the time frame agreed time schedule. It’s
important that products and services should be upgraded from
time to time in accordance with demand in the market and post-
sales services should be an integral part of sales of products and
services. We may conclude that quality is the imperative part of
business management. Monitoring the performance of products/
services provided and taking corrective steps if any week link

96 │ Dreamer to Entrepreneur
or deficiency noticed is imperative to be a market leader. The
entrepreneur should also focus on customers feedback, reviews,
and customer’s satisfaction, because ultimately business will
come from highly satisfied customers only which will generate
the profit for the enterprise.
To sum up, successful entrepreneurs always focus on the
quality of their products and services and ensure that they are the
best out of the best at competitive prices, coupled with excellent
post-sales services which lead to high customer’s satisfaction.

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Maintain High Quality Standards │ 97

 CHAPTER 20

Risk Assessment and Risk

Mitigation:
A risk is an unavoidable event that may affect any business
enterprises, specialty when the circumstances are beyond the
control of the entrepreneurs. The risk can be classified in to three
categories –

1] External Risk such as-

a] Natural calamities - like floods, drought, earthquakes,
pandemics, Fire etc.
Mitigation – Entrepreneurs should cover such risk in
the insurance policy. The disaster management team
handles the situation to minimize the loss and restart the
business operation.
b] Man made disturbances - like riots, violence, labour
strikes.
Mitigation – Insurance coverage and if labour strikes is
related to workers of own enterprise the efforts should
be made to negotiate with them and resolve their
grievances. Such conditions should be handled by the
disaster management team.

98 │ Dreamer to Entrepreneur
c] Change in govt law or policy and put ban on the
product.
Mitigation – The entrepreneurs should keep themselves
with the business news and when they get any clue of
change in the policy, they should immediately go for
diversification to other products which can be possible
with minor changes in the unit. If diversification is
not possible, the entrepreneurs should go for any new
activity and new products and try to use old assets in
new business activity, and the assets not of any use may
be disposed- off quickly. The timely recognition of risk
and taking appropriate steps quickly to minimize the
risk.
d] Market risk –
This kind of risk arises due to volatility of the market
such as high inflation rate when the situation becomes
such that the people may not have the buying capacity
beyond their essential daily needs. Other reasons may be
price fluctuations, new and advance products launched
in the market by competitors, Market trend is changed,
Customers preference, choices are changed.
Mitigation – Make the product as per market trend and
customers choice. Obtain customer feedback regularly
to know their choices. Reduce the cost of production to
reduce the market price to meet the competition. Establish
the positioning of your product by brand building so that
people remain attached with the products. Give better
after-sales service than your competitors. Introduce
some combo packs and coupons, to increase the sales.
Also find out new market for your products and resort
to deep penetration in existing territory.
e] Operational risk - This risk is due to breakdown
of plant and machinery, electricity failure or short
circuits, Technology become old and new technology or

Risk Assessment and Risk Mitigation: │ 99

 upgradation not yet done, failure of computer system,
Information technology, cyber security breach, and
hacking of accounts and data, virus attack, death or
serious illness of key personals etc.
Prevention of risk – The entrepreneur should be vigilant
to recognize the potential risk or threat, and accordingly
he should take the necessary proactive steps to prevent
such risk. Like virus attack in computer systems, the
antivirus can be installed. Taking back up on a regular
basis will also be a preventive measure against loss of
the data. Entrepreneurs should always make necessary
changes to upgrade the technology to the latest
technology so that they can prevent the risk associated
with old technology like higher cost of production and
lower quality of product and less output.
Mitigation of risk – Whatever operational risk can be
covered in insurance policy; the entrepreneurs must cover
the same. Further the disaster management team should
be kept ready always to handle the situation. Second line
of defence should be built to continue the operation in
case of death or serious illness of key personals. Efforts
should be made to restore and continue the business as
per the business continuity plan in place.
Apart from the above the following risk should also be
considered important:

1. Sales risk and its mitigation:

The risk of rapid sales decline is one of the most critical risks.
It depends on fixed and variable costs. The selling risk is very
high due to fixed costs and the break-even point may be too close
to the sale price. A slight drop in sales is a result of the sale of
products below the break-even point. Therefore, it is important
to lower the break-even point. This can be done by reducing
fixed costs wherever possible and converting fixed costs into

100 │ Dreamer to Entrepreneur

variable costs. In the early stages of the business, the fixed costs
should be kept on the lower side or minimum to the extent
possible and the product cost per unit also needs to be kept to the
minimum possible level. In order to reduce the sales risk, fixed
and variable costs should be balanced, and the balance of fixed
and variable costs should be calculated properly. Another way
to reduce the sales risk is to go for diversification after a proper
study of the cost of production of the products, their sale price,
and the margin of profit available on such products.

2. Cash flow risk and risk mitigation:

Cash flow risk is the risk when an entrepreneur needs cash
quickly. The cash flow risk arises mainly when bills are not
realized in time due to a delay in dispatch or the receivable has
not been released on time. Such risk is to be mitigated by way of
an uninterrupted production process and timely dispatch of the
products and timely realization of receivables by making all-out
efforts.

3. Production risk and risk mitigation:

Any interruption or bottleneck in production is considered
as a production risk. The unit’s greatest production risk is
power shortages. The entrepreneurs can consider installing the
generator of the required capacity to reduce production loss
due to power shortages. Sudden malfunctions of machines and
systems can create production risks. It is therefore necessary,
that the equipment and plant and machinery should be covered
under an annual maintenance contract after the warranty period
is expired.

4. Social risk and risk mitigation:

Such risk by nature may crop up sometime when society
starts taking objection regarding products or its process in
particular regions due to their religious belief or some social
leader has influenced the mindset of the society. Such a risk can

Risk Assessment and Risk Mitigation: │ 101

be mitigated by explaining the facts about the product and the
process of production. The advertisement to remove doubt in the
mind can be given in press media and on television.
To sum up, entrepreneurs should recognize the potential risk
and take preventive measures and plan for mitigation of risk if
the prevention of threat or risk is not possible.

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102 │ Dreamer to Entrepreneur

 CHAPTER 21

Banking - Basic Knowledge

Entrepreneurs should have a basic knowledge of Banking as
they will be required to deal with banks daily. There may be an
occasion to raise the funds from Banks.
1. Banking structure - The Banking structure in the country
comprises with one central Bank of the country known as
Reserve Bank of India who regulate the banking system
and public sector banks namely State bank of India and
Nationalized. banks, Cooperative banks, Private Sector
banks, Regional Rural Banks, Payment banks Small
Finance Banks and Non-Banking Financial companies.
2. Function of Banks – Banks’ core activity is raising funds
by way of accepting the deposits and providing need-
based fund and non-fund facilities to the customers.
Transfer of funds, selling of mutual funds, insurance,
credit cards are some of the other activities being
undertaken by most of the Banks.
We discuss the important aspects of banking hereunder.
1. Types of Deposit Accounts: The Banks open various types
of deposit accounts like Saving Bank account, Current account,
and fixed deposit accounts.
i. Saving Bank account – Any individual single or jointly
with other individuals can open a Saving Bank account. Bank
allows personal transactions in these accounts. Salary accounts
of employees and pension accounts are mostly saving bank

Banking - Basic Knowledge │ 103

accounts. Business entities are not entitled to open saving bank
accounts for their business transaction. All facilities like cheque
book facility, Online banking, Mobile banking, Debit cards,
IMPS/ NEFT/ RTGS, UPI Payments are available to the account
holder. Bank pays some nominal interest in Saving account to
its customers. The facility of auto transfer from saving bank
account to Fixed deposit account is also available keeping certain
minimum balance in saving bank account and when the funds
are required, it will be retransferred from fixed deposit account to
saving bank account. One can transact up to a maximum number
of transactions in your saving bank account as per category of
your account which depends on the average balance maintained
by the account holder in his account.
ii. Current account – current account can be opened by
individuals singly or jointly as well as the business firms/
companies for their business transactions. Banks have some
charges for maintaining current accounts. In current accounts
facilities of cheque book, online transactions, IMPS/ NEFT/
RTGS, UPI Payments, Debit card is available to the customers.
iii. Fixed deposit accounts – Fixed deposit accounts can be
opened by any individual singly or jointly or firms or company
or any other legally constituted entities. Funds are deposited for
a fixed period in such accounts and banks pay the compounding
interest on the deposit. The depositors will have options to
withdraw the interest on monthly/quarterly/half yearly /
yearly basis or at the time of maturity.
All the above can be opened after submission of proof of
your photo identity such as PAN card and address proof driving
license/Aadhar card / passport etc., which is commonly known
as KYC [know your customer] documents. Verification of
customers will be done based on Face to Face or by video system.
2. Types of Credit Facilities: Banks provide various types of
credit facilities categorized in different categories depending on
purpose, nature of facilities, tenure of facility. The entrepreneurs

104 │ Dreamer to Entrepreneur

should be aware of such Credit facilities available from the
banking sector so that they can approach the banks when the
need arises. The following types of credit facilities classified as
per nature of credit facilities are available for business enterprises:
i. Term loan Facility- The term loan facility is available to
finance the fixed assets or capital assets like, land and
building, plant and machinery, furniture, and fixtures
etc. The term loan is repayable in instalments over a
period which depends on estimation of profit generated
by the unit based on which repayment capacity is to be
worked out and useful life of assets created out of bank
loan. Generally, the total tenor of loan in majority cases
ranges from 5 years to 9 years and for infrastructure
projects it goes up to 15 years. The loan instalments
commenced usually after the commercial operation date
i.e., when commercial products start.
ii. Overdraft Facility- Overdraft facilities generally
provided by the banks to the customers occasionally
having satisfactory track record for short period for
meeting urgent working capital expenses.
iii. Demand Loan – Demand loans are those which are
repayable on demand. These are also for the short term
and for the total tenor of not exceeding 36 months.
iv. Cash Credit [CC] facility- This is commonly granted by
the banks to the enterprises for meeting their working
capital. The bank assesses the working capital limit
required for one operating cycle from purchase of raw
material to realization of sales proceeds. After the limit is
fixed you can avail the limit for purchase of raw material
for your enterprise and you will be required to submit
your stock and debtor position every month and based
on which bank will decide your drawing power after
deduction of margin fixed by the bank. The facility shall
be renewed every year. If your business is increased your

Banking - Basic Knowledge │ 105

 cc limit shall also increase subject to satisfactory conduct
of your account and if your business is decreased the cc
limit may be decreased by your bank.
v. Pre shipment and Post Shipment Credit – These credit
facilities are related to export activities. Pre shipment
credit means the credit facility required to purchase
the raw material to make the finished product and
post shipment credit facility means, when the goods
are exported and invoice are raised, but payment will
be received after goods are reached to destination, so
bank will provide the finance against export bills till the
payment from overseas buyers received.
vi. Bank guarantee – Bank guarantee is a non-fund credit
facility. When one entity [ say party A] give some order
to execute the specific work, to another entity [ say party
B], but party A wants from party B, the Bank guarantee
so that if the party B fails in completion of work as per
quality and within time, the party A will get the bank
guarantee amount from the bank to recover the loss if
happened due to delayed completion or non-completion
of work by party B. The payment of bank guarantee
amount made by bank to party A is called invocation
of bank guarantee and Bank will recover this amount
from party B immediately. Bank guarantees are usually
required by contractors to secure the contracts relating
to infrastructure sectors from governments or their
agencies.
vii. Letter of Credits – This is a non-fund-based facility, and
it is required for sale and purchase of goods. When the
seller supplies the goods to buyer, he will require the
payment from the buyer, but buyer cannot pay the seller
immediately, in this situation buyer approach his bank
to issue letter of credit in favour of seller, so that seller
can get the payment from bank for the supplies made
by him. LC issuing bank when make the payment under

106 │ Dreamer to Entrepreneur

 Letter of credit, in turn he recovers the same from the
buyer along with interest, cost and charges relating to
the above transaction.
viii. Types of loan/credit facilities as per purpose and
category of borrowers – Banks provide the loans/
credit facility depending on repayment capacity of the
borrower and in some cases, it also considers the value
of security along with repayment capacity of borrowers.
Some of example of such loans are given hereunder-
a. Personal loan for any personal needs like education,
medical needs.
b. Home loan for purchase house/flat/ plot and
construction thereon/ repair and renovation of old
house.
c. Loan against property for any personal or business
needs
d. Vehicle loans for purchase of commercial vehicles or
personal vehicles.
e. Education loan for pursuing degree/diploma or
other education programs in India or abroad.
f. Loan to traders and medium small and micro
enterprises. This is for establishing a business or its
expansion.
g. Corporate credit to big companies. This is for big
companies in sole banking/multiple banking or
consortium finance.
In the above category 1 to 5 are self-explanatory as per the
purpose and category 6-7 are mainly for business purpose as
discussed in detail above in this chapter.
3. Ancillary Banking Services: Remittances by way of
Demand Drafts, RTGS, NEFT E banking, Mobile Banking, credit
cards, mutual funds, and insurance under tie up arrangements
etc.

Banking - Basic Knowledge │ 107

 4. Dealing with the bank: It is very important for running the
enterprise successfully that the entrepreneur should establish a
satisfactory track record of dealing with the banks. They should
take care that their cheques or electronic fund transfer mandates
do not bounce back. Repayment of loan instalments/interest
is made strictly on time. All the sales and purchases should
be routed through the bank account and whatever monthly/
quarterly/half yearly/yearly statement stipulated by the bank
should be submitted on time. This all will contribute to your
better credit score and hold your hand and all ups and downs
of your business enterprise. It is important for the entrepreneur
that the major cost of running a business is the Finance Cost,
therefore the funds availed from the bank should be judicially
used only for the purpose the funds are availed. In other words,
the end use of the banks funds if verified by the bank should
be proved by documentary evidence at the time of the physical
verification of capital assets purchased out of bank loan and
value of stock inventory, debtors etc. created with bank working
capital facility. An entrepreneur is expected to manage the
working capital effectively by proper inventory management by
giving timely order and for required quantity at well negotiated
price, Debtors Management by ensuring recovery of credit sales
within the time period, creditors management by making timely
payment of supplies and cash management by depositing cash
received during the course of business, to minimize the finance
cost.
To sum up, entrepreneurs can take the required support from
their banker by maintaining satisfactory conduct of their loan/
credit facilities accounts.

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108 │ Dreamer to Entrepreneur

 CHAPTER 22

Purchasing of Capital Assets and

Raw Material - A Proper Approach:
Entrepreneurs must take due care of rates. Quality, brands,
market reputation of supplier while purchasing capital assets
as well as the raw material. We discuss hereunder some of the
important points for the benefit of entrepreneurs.

Purchasing of capital assets -

1] Purchase of industrial land and building/shed – The
entrepreneurs should consider location, topography,
availability of water, electricity, sewage lines, connecting
roads, constructed area etc. while purchasing the
industrial land and building/shed. They should get the
title of the property verified by legal experts to ensure
that the property is having clear title and is free from
any encumbrances. It is always preferred to purchase
such property in an industrial area for industries/ or
commercial or Information technology park depending
on nature of your business where all the facilities required
for the business are available. The price of the property
should be negotiated and finalized as per the prevailing
market rate or lower than that price.

Purchasing of Capital Assets and Raw Material - A Proper Approach: │ 109

 2] Purchasing of plant and machinery/equipment/
accessories [ P&M]-
i] Finalize the latest technology based on which your
enterprise is to work carefully considering the cost
of various available options.
ii] Select the P&M and study their specification and
cost and compare such specification and cost with
other manufacturers/suppliers. Short list the
manufacturers/supplier.
iii] Negotiate the cost with shortlisted manufacturers/
suppliers and finalize the manufacturer /supplier
[vendor] whose brand is well established and is ready
to supply at the lowest rate and provide aftersales
service and give the warranty of their products. Take
advantage of market competition.
iv] Better to get the credentials of vendor verified from
some reliable sources/ their websites or local enquiry.
If the credentials are good and vendor is reputed
then place the order mentioning specification of
P&M, to be purchased. Advance payment that too
whatever minimum possible to be made only in
cases of branded products manufactured by reputed
companies and supplied by reputed authorized
dealers.
Entrepreneurs should keep a proper record of all the capital
assets purchased for their knowledge and ready reference /
information as and when needed.

Purchase of raw material -

Raw material and consumables are required to be purchased
by every enterprise on a regular basis, however raw material
contributes a major part between the two. The local suppliers

110 │ Dreamer to Entrepreneur

who can supply the raw material of the required quality should
be preferred over an outside supplier. Entrepreneurs may work
out the quantity for each lot to be purchased based on yearly
requirement. Deciding of quantity per lot is important because it
carries the transportation cost and price difference on purchase
of minimum quantity.
Calculation of the required raw-material stock according to
availability of the same. The above principle should be followed
in purchasing of consumables also. The rates for raw materials
and consumables should be negotiated properly, taking
advantage of market competition.
The raw material and consumable purchased should be
recorded every time and whenever they are taken out for further
processing should also be recorded. This will facilitate knowing
the available stock of raw materials and consumables at any
given point of time.
To sum up, purchasing fixed assets and raw materials at a
reasonable price makes the good beginning of the entrepreneurial
journey.

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Purchasing of Capital Assets and Raw Material - A Proper Approach: │ 111

 CHAPTER 23

Working Capital Management

Efficient and productive use of all long-term and short-term
funds is the essence of financial management. In other words,
the success of any enterprise depends on proper use of capital
infused by the promoter as well as funds raised from various
sources in the form of unsecured loans, secured loans, short term
loan and working limits. Means all the items of liabilities side of
balance sheet called as sources of funds and the same should be
used for the purpose it has been raised for built up of fixed assets
and current assets which is termed as uses of funds. Diversion of
funds may heavily cost the entrepreneur. To understand working
capital management better, lets understand the management of
long-term funds together with working capital management as
explained hereunder:

1] Management of long-term funds -

Long term funds are used for the creation of fixed immovable
or movable assets or other capital assets. It aims to use long term
funds judiciously when purchasing fixed assets such as factory’s
land building, plant and machinery, equipment, furniture, and
fixture etc. Funds for creation of fixed assets or capital assets
should always come from long term sources and never use the
short-term funds for creation of fixed assets or capital assets,
otherwise it will lead to shortage of working capital to run the
business successfully. It is vital aspect for the enterprise that
after meeting the long-term fund requirement for purchase of

112 │ Dreamer to Entrepreneur

fixed assets, the balance amount of long-term funds shall form
the margin of safety and it is also called net working capital.

2] Working capital management –

Working capital management is most crucial to running the
business. The total or gross working capital is the sum of current
assets, while net working capital is the excess of current assets
over current liabilities. In other words, net working capital is
the portion of working capital that is funded from long-term
sources and determines the margin of safety for meeting current
liabilities.
Working capital management is important for the following
reasons:
a) Working capital facility if availed from bank bears
the interest costs, hence its judicial use is necessary to
minimize the interest burden.
b) Fixed assets are acquired occasionally, and financial
decisions are required only occasionally. However,
working capital management requires ongoing decisions
and the same often requires significant financial
resources.
c) In an inflationary situation where commodity prices are
constantly on the rise, if working capital is not managed
efficiently, there may not be enough money to buy
commodities at the right time and production will be
hampered.
The goal of efficient working capital management is to ensure
smooth operation of the working capital cycle which comprises
of cash – purchase of raw material – manufacturing of finished
product – cash sales – and then – cash. When there are credit
sales, this cycle will be extended for the period by which the
value of credit sales is realized.
The working capital turnover ratio is an important tool to
monitor how many times working capital gets rotated in a year

Working Capital Management │ 113

in relation to net sales. It is calculated as – Net sales divided by
working capital. [ Here working capital is equal to Current assets-
current liabilities]. Here it is worthwhile to mention the working
capital ratio which is calculated as – current assets divided by
current liabilities. This is also called current ratio or liquidity
ratio. If this ratio is 1.33:1 it depicts that the current assets are
sufficient to meet the current liabilities of the enterprise.
The company should maintain sufficient cash to cover the
day-to-day costs of production, sales, and other operations, while
ensuring that the company maintains adequate inventory levels.
Holding excess inventory means blocking of funds which carries
higher costs in the form of interest, and it ultimately results in
lower profitability. Therefore, companies must accurately assess
their working capital needs for maintaining adequate inventory
and other current assets.

Concept of the Operating cycle:

Fundamental to determining a company’s working capital
requirements is the concept of the operating cycle. The operating
cycle is the cycle in which goods are purchased using cash. Raw
materials are converted into work-in-progress and finished
goods. Finished goods are sold to customers in cash or on credit.
When sales happen on credit, the cash is blocked in the form
of receivable. Once the receivables are realized, the funds are
cycled back into cash and can be used to purchase goods such as
raw material, consumables etc. and this cycle shall continue. The
working capital used by a company at any point of time will be
the sum of the following values:
a) cash and bank balances.
b) value of raw material and consumable at cost price.
c) value of work-in-progress at cost of production.
d) value of finished goods at cost of sales.
e) an amount of receivables or sundry debtors.

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 An entrepreneur or his/her finance officer should work out
the working capital requirement based on holding period of
inventory and other current assets and after due consideration
of credit available from supplier.

Cash and bank balance:

The amount of cash and bank balance. a business should hold
depends on the following factors:
a) Trading volume:
The cash and bank balance depend on sales volume if
the sales is mostly in cash. However, a balance must be
struck between cash inflows from sales and cash outflows
from day-to-day purchase and operating expenses. The
entrepreneur should maintain minimum cash in hand
and rest amount of cash they should deposit in the bank
only. If the entrepreneur is enjoying cash credit facility
from bank, the surplus cash should be deposited in their
cash credit account to minimize the interest burden.
b) Urgent needs:
Entrepreneur should keep a certain amount of cash in
hand or in their bank account in reserve for unforeseen
circumstances.
c] Cash flow fluctuations:
Enterprise should keep different cash balances at different
stages of the month, consistent with their monthly cash
flow forecast.

Funds required for raw material:

The funds required for raw material depends on the following
factors:
1] Holding period – Holding is calculated in relation to
yearly raw material consumption. For example, yearly
consumption of raw material is INR 24 Lakhs and

Working Capital Management │ 115

 raw material equivalent to one month consumption is
required to be purchased in every lot, that means holding
period is one month and amount of raw material is INR 2
Lakhs.
2) Lead period in days - Lead period in days is the time
lag between placing an order and receiving the actual
material. If payment is made in advance while placing
the order, the same is to be shown in advance payment
in current assets.
3) Minimum Order Quantity – Many suppliers fixed
minimum order quantity of the materials to be supplied
by them, hence while calculating the raw material
holding period and amount required for that, should
be kept in view, to purchase the raw material from the
supplier.
4] Other important factors of purchase of raw materials-
i. Transportation/shipping costs- This is the important
cost factor as it directly relates to the quantity of raw
material to be purchased. For example, the capacity
of the truck is 12 MT and if the purchase quantity
of raw material is 8 MT, the transport company
will charge approximately the same transportation
charges as applicable for 12MT raw material.
Accordingly, entrepreneurs to decide the quantity of
raw material to be purchased keeping in view the
transportation charges to be incurred.
ii. Storage and insurance cost – Entrepreneurs should
decide the quantity of raw material such that they
should not incur the avoidable cost on storage. At
the same time insurance premiums will be higher if
the stock of raw material is higher.

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Funds required for stock in process:
The holding period and amount of stock in process is
calculated in terms of cost of production and is mainly depends
on the completion time of the manufacturing process. The longer
the manufacturing process, the higher the investment in stock
in process and vice versa. Stock in process is also high when the
manufacturing process requires the use of multiple machines,
and the capacities of these machines are below the required
capacity.

Finished product:
The holding period amount of finished goods is calculated in
relation to cost of sales and determined by the following factors:
a) Expected quantity of sales.
b) Time required for inspection of goods
d) If the customer requires delivery in big lots, more finished
goods should be maintained.
e) If the optimal production quantity is large, the quantity
of finished goods will also be large.
The stock of raw materials, stock in process and finished
goods combinedly terms as inventory. Here it’s important to
understand inventory turnover over ratio which is calculated as-
Cost of goods sold divided by average inventory. The ratio can
be also calculated as- Net sales divided by Average inventory
at cost or as – Net sales divided by average inventory at selling
price. This ratio gives an idea that how many times the inventory
is rotated in a year.

Funds required for sundry debtors or receivables:

The holding period and amount of receivable is calculated
on amount net credit sales and depends on the customer’s
payment terms agreed between the buyer and seller. Many
times, discount is given if the payment is made immediately after

Working Capital Management │ 117

delivery, Entrepreneurs to note that credit sales should be done
with caution to good customers only otherwise some customers
may not pay the amount in time, or they may not pay at all, and
this may result into loss to your company. It is advisable that
entrepreneur should make vigorous follow up from their debtors
[if they did not pay their dues on date] to get funds realized from
them as soon as possible and next time they should not supply
the goods to such person who has not repaid their dues on time.
The Debtors’ turnover ratio is calculated as - net credit sales
divided by average receivables, which gives a fair idea about the
movement of receivables in relation to net credit sales.
Sundry creditors or account payable – The enterprise
purchases the raw material from their supplier who provides
credit on supplies made by them and on the due date buyer has
to make the payment to the supplier. This credit supply may
be without interest or with interest as per the mutually agreed
terms and conditions between the buyer and seller. The creditors
turn ratio gives an idea that how many times the purchase is
available on credit in relation to total credit purchase and the
ratio is calculated as – Total credit purchase divided by average
sundry creditor.

Working capital resource planning:

The main recourse for the entrepreneurs is to obtain a working
capital limit which is commonly known as cash credit limit from
a commercial bank. This is easy as the commercial banks are
also looking for an opportunity to lend the funds. Bank shall
increase the limit if there is increase in the business and decrease
the same when there is down word trend in the business. The
entrepreneurs should keep their conduct of account satisfactory
for availing the maximum facilities from the bank. The banks
calculate the working capital normally as under –

118 │ Dreamer to Entrepreneur

 1] Method - A
A] Total current assets =
B] Less current liabilities other than bank borrowing =
C] Working capital gap [A-B] =
D] Less 25% margin or net working capital [whichever
is higher] =
E] Maximum permissible bank finance [ C-D] =
The figures arrived in E above is working capital limit or cash
credit limit to be considered for working capital requirement of
the unit.
2] Method -B
The banks for MSME sector, if they require a limit of up INR
5 crores calculate the eligible working capital limit @ of 20% of
sales turnover. That means if the sales turnover is INR 25 Crores,
they shall consider the limit up to INR 5 Crores.
However out of above two methods the maximum limit
worked out in any of the above methods shall be considered
for proposals up to INR 5 Crores but for proposals of above
INR 5 Crore only limit work out by method - A above shall be
considered.
To sum up, entrepreneurs should ensure financial
management professionally to make maximum utilization of
funds prudently to run the business and make the profit.

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Working Capital Management │ 119

 CHAPTER 24

Break-Even Analysis
The break-even analysis is a method to know what is the
minimum production level at which the cost incurred to produce
the products is equal to the sale amount. That means at this point
you can meet all the costs without incurring loss or profit and
this point is known as the breakeven point. To earn a reasonable
profit, an entrepreneur have to plan to increase production above
the level of breakeven point. Breakeven point is important for
entrepreneur to maintain the production level of his enterprise,
and it is also important for the lenders who lend the money to
establish the enterprise to judge the profitability of the enterprise.

1. Understand Break even Analysis:

To conduct profit-oriented business activity, certain costs
are involved such as raw material cost, salaries/wages, interest
charges on borrowed funds and the capital cost invested in the
business activity, and all these costs put together termed as the
total cost.
The total cost comprises of two types of cost as follows-
(i) Fixed Cost and
(ii) Variable Cost.

Fixed Cost:
Fixed Cost is that cost which remains constant irrespective of
the production level. such as, interest cost on term loan, rent of
factory/office if on rent, depreciation on fixed assets, municipal

120 │ Dreamer to Entrepreneur

taxes etc. These costs are to be incurred irrespective of whether
the factory is working at all or closed or its working on full
capacity or partial capacity. These costs or termed as fixed costs.
For example, a factory rent is INR10000/- and interest on
borrowed term loan is INR5000/ per month and it produces 150
units of product per month, assuming that except above there
is no other cost is involved, the fixed cost per unit in this case
comes to INR100/-. In case production increases next month to
300 unit, in that case fixed cost per unit decreased to INR50/-
and if production decrease to 100 unit, the per unit fixed cost
increase to INR150/- That means fixed cost remain the same
irrespective of number of units produced and per unit fixed
cost is inversely proportionate to number of units produced in a
particular month means if no of units produced more the fixed
cost per unit decrease and if number of units produced less the
fixed cost per unit increase.

Variable Costs:
Variable Cost is increase or decrease with the increase in
production or decrease in production, respectively. It is directly
proportionate to the number of units produced. For example,
raw material consumed is directly related to the number of units
produced. The variable cost remains the same for every unit
produced. It can be further elaborated as under –
If Raw-material cost per unit is INR 100/- then to produce 10
units, the raw material cost will be INR1000/-.
Variable Cost per unit = Rs.100/-
Once the concept of fixed cost and variable cost is clear, we
can easily calculate the Breakeven point.

Calculation of the Breakeven point:

Before calculating the Breakeven point, we must calculate
the contribution. The contribution is the difference between the
variable cost per unit and selling price per unit is the contribution.
The contribution remains the same if there is no change in the

Break-Even Analysis │ 121

variable cost per unit and selling price per unit. Hence, given
the same selling price, the difference between Variable Cost per
unit and selling price per unit which we call ‘Contribution’ also
remains the same. The total Contribution increases when sales
of total number of units increases. If the fixed cost remains the
same, and the enterprise sells such number of units by that the
contribution becomes equal to the Fixed Cost, such number of
unit or the sales receipts is called the breakeven point. At this
point there no profit and no loss. Any contribution made above
the breakeven point or say after meeting the fixed cost, shall be
the Profit for the enterprise.
We can summarize the above conclusion as under:
i). Total Cost of production [COP] = Variable Cost multiply
by No. of units (VC) + Fixed Cost.
ii). Contribution (C) = Sales Receipt (SR) – Variable Cost
(VC)
iii). Profit (P) at “N” level of production =
(Sales Receipt for “N” No. of Units) – Total Cost. Or
SR – (VC + FC) or SR – VC – FC
Profit = Contribution (SR-VC) – Fixed Cost (FC)
Selling Price per unit - INR 100.00
Variable Cost per unit - INR 50.00
Fixed Cost for the Project - INR.1.00 LAKH
Production Levels: 5000 units
Sales Receipt INR 5.00LAKH
Variable Cost INR 2.50 LAKH
Contribution INR 2.50 LAKH
Net profit [contribution- fixed cost] = INR 1.50 LAKH

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 In the above if the number of units produced were 2000, the
sales receipt was INR 2.00Lakhs, VC INR 1.00 Lakhs contribution
comes to INR 1.00 Lakhs and fixed cost is 1.00 Lakh which is
equal to contribution. Thus, this is the breakeven point in terms
of production of the number of units and sales price.
i] Break even in terms of Capacity Utilization:
Break – Even level of production can be calculated using
the below noted formula -
Fixed cost
BEP-= ______________________________ x %
SR – VC x total capacity
ii] break even in terms of Sales Receipts:
Break – Even Point in terms of Sales Receipts is calculated by
fixed Cost and ‘Profit Volume Ratio which is in short called P/V
ratio. The importance of p/v ratio is that it depicts the relation
between ‘Contribution’ (Sales Receipt – Variable Cost) and Sales.
In other words, it is the percentage of Contribution to the sales
volume. It that what percentage of sales receipt will be available
after setting off the variable cost, to meet fixed cost and book the
profit.
P/V Ratio = Contribution/Sales = SR – VC/SR
If contribution is 5000 and sales receipt will be 10000, the PV
ratio will be 0.5 or 50 % of sales receipt to meet the fixed cost and
book the profit.
We can calculate Breakeven Sales Receipt with following
Formula:
Fixed cost/PV ratio or Fixed cost
_____________________
SR-VC /SR

Break-Even Analysis │ 123

Importance of Break – Even Analysis:
The break-even analysis is very important to judge the
financial viability of any project, some of the important benefits
are as under-.
1) It is a helpful tool for entrepreneurs to choose the
activity, for investors to make the investment decision
and bankers or lenders for making credit decision.
2) It helps the entrepreneur to know the sensitivity to price
or sales fluctuations on profitability.
3) Entrepreneurs producing or planning to produce
multiple products can compare the BEP for each product
and concentrate on more profitable products.
4) In the event of heavy price fluctuations, it helps the
entrepreneurs to change the products OR process to do
the business above the BEP to make the profit.
5) Breakeven analysis helps the entrepreneur in product
pricing. The entrepreneur may plan for allowing
discount on the product to the extent if BEP is within the
comfortable range after discount.
To sum up, entrepreneurs should make the best use of break-
even analysis to make a proper decision of going for a particular
product and decide the pricing so that their enterprise earns a
sufficient profit.

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124 │ Dreamer to Entrepreneur

 CHAPTER 25

Time Tested Marketing and Sales

Strategy
When entrepreneurs think about starting their entrepreneurial
journey, they select the product only after studying its position
of the demand and supply in the market. Many times, the
product is considered suitable looking to its heavy demand of
that product in the market and some time looking to success of
some enterprises working in that product or in consideration of
short supply of a particular product in the market whereas the
product is having good demand. Marketing consists of various
important activities.

1. Market survey or Market Research:

Market survey or market research is the first step to ascertain
the demand and supply of the product for selection of product.
After selection of product proper techno economic study should be
carried out to study whether to set up a manufacturing unit of the
selected product is a viable proposition. Here consumers’ choice
and their satisfaction are of prime importance. Entrepreneurs
should continue their market research even after launching their
product as this helps them to upgrade or modify their product
and or packaging from time to time as per satisfaction of their
customers.

Time Tested Marketing and Sales Strategy │ 125

2. Strategic Planning:
Planning for the marketing of the product get started with the
start of the project and it should continue as an ongoing process
at every stage of the project. Planning should cover setting up
of distribution channels, digital and social media marketing,
Market development advertisements, online sale on ecommerce
platform, designing and packaging, logistic and supply chain
arrangement, exploring new territory and deeper market
penetration, estimation of future sales and sales promotion
strategies.

3. Product Branding and logo:

The branding and logo of the product is necessary to position
the product in the market and earn the trust of the customers.
The customer treats the unbranded products of poor quality.
This is a fact that there are several products of a similar type
but of a different quality available in the market. Because of
this reason the customers do not get the confidence and go for
purchase of the unbranded product. Therefore, brand building
is utmost necessary. Apart from building trust of the customers,
it helps the customers and retailers in easy identification of the
product, display of product on retailers show room and, in the
mall, increase the brand image of the product and it will attract
the customers to buy the product. Once the brand is established,
the loyal customers will demand the products by brand only.
Brand with logo on the products and packaging will further
improve the visibility of the products, which will increase the
faith of the customers and will result in to increase of the sale of
the products.

4. Pricing of the product:

The price is a sensitive issue for the customers when they
choose to buy the product more often, particularly when the
quality of the product is the same as other competitors.
Keeping the above customers behaviour in mind, the pricing
of the product should be done as under

126 │ Dreamer to Entrepreneur

 1. keep the price based on profit margin at different levels
of sales in a business cycle subject to condition that it
should not be much higher than the similar products
available in the market.
2. Price should be attractive for the customers subject to
condition that it should be above the cost price so that it
generates some profit. Customers purchase the products
only when pricing is competitive with other market
players.
3. Price may be kept slightly above the cost price to earn
marginal profit only if there is some campaign for limited
period to develop the market and once the customer’s
liking is developed price may be increased to earn the
reasonable profit. Another way is to give some discount
keeping the standard price intact or give some gift item
as a combo pack keeping a combine price at such level
that it gives some marginal profit.

5. Robust product Distribution system:

The aim of a robust distribution channel is to deliver the
goods to the maximum consumers in the desired quantity within
the prescribed time. To facilitate that the product should reach
the customers when they need it most, and this can be achieved
by creating a good network of distributors, dealers, whole sellers,
retailers, sales outlets and vendors. Ecommerce platforms can
be used for the sale of products and prompt delivery to the
customers. Entrepreneurs may avail themselves of the services
of the fastest couriers to deliver the product at the doorstep of
the buyers within the shortest time.

6. Selling of the product to the customers:

The selling of the product is simply the delivery of the goods
to the customers and recovering the price from them. Sales
remain incomplete if the price of the goods sold to the customers
is unrecovered. If the selling is by sales staff working on a salary

Time Tested Marketing and Sales Strategy │ 127

basis or on a commission basis, by contacting the customers in
person, in such a situation the sales staff should be well versed in
product quality and specifications to get the best results.
The sales staff should be highly motivated and those who
bring the best results should be rewarded with some incentives
or appreciation or both.
It is also very important to supervise and monitor the sales
staff at regular intervals by taking their meetings and through
statements and returns.
If an outside agency is appointed for sale, in that case the
agency who has done well should be rewarded with some gifts
or with some bulk discount on selling goods above the sales
targets.

7. Facility of after sales services:

This is an essential part of selling the products to the customers
and it is more important if the product is of a technical nature.
The entrepreneur must make an enquiry on the customer’s
complaint and resolve the complaint quickly and amicably, so
that the customer is satisfied with the services of the enterprise.
get impressed and become a repeat customer if he gets the
satisfactory after sales services. The satisfied customers always
spread positive news for the product and the enterprise, which
will ultimately boost the sales of the company.

8. Sales Promotion and advertising:

This sales promotion activity in today’s time is an ongoing
process, to boost up the sales, particularly at the time of festivals or
for the purpose of stock clearance. The sale promotion is resorted
to sale the slow-moving item with the fast-moving item. Many
enterprises give special discounts during the sales promotion
campaign organized for a few days. Sometime special contest for
particular period is arranged and winners are rewarded.

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 If you give advertisements for the product on various digital
platforms, including social media, at the appropriate time, it will
increase the product’s visibility among people. Entrepreneurs
may advertise in expensive media like digital marketing, social
media, hoardings, internet web site, SMS on mobiles, email
stalls at exhibitions and fairs, etc. If the entrepreneurs have a
comfortable budget, they can resort to advertisements on radio,
TV, and in News Papers and Magazines to boost sales by reaching
the maximum number of people.
To sum up, entrepreneurs need to understand that the
enterprise’s success will ultimately come from the sale of the
product; therefore, marketing and the sale of the products
deserve the highest priority.

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Time Tested Marketing and Sales Strategy │ 129

 CHAPTER 26

Accounts and Book- Keeping

Accounts and bookkeeping deals with regular and systematic
recording of financial transactions professionally as per
accounting standards. The accounting of transactions should be
done preferably on an advanced version of accounting software
like tally prime. The records will enable the entrepreneur to:
a) Keep track record of every transaction.
b) Reflect the corresponding effect of each transaction in
other accounting head.
c) It Measure the impact on income, expenses and overall
financial position of enterprise and entrepreneurs.

1. Need of maintenance of accounts:

It is said that the entrepreneurs who are setting up any type
of industry or business enterprise should invariably ensure
maintenance of books of accounts from the date of start of the
business. If any entrepreneur is not able to build an accounting
system, he/she should not start the business. The inefficient
system of maintenance of books of accounts may result in the
failure of newly set up business enterprises.
Accounts depicts the financial health of business at a given
date.

What is the Bookkeeping:

Booking is the system of recording business transactions in
the books of accounts on a regular basis and systematic manner.

130 │ Dreamer to Entrepreneur

What is Accountancy:
Accounting is the system and procedure of recording,
classifying, and summarizing financial transactions.

How Book-Keeping and Accountancy differs with each

other:
Book- Keeping is a primary level of accounting. It only ‘record
the transactions takes place’ where as ‘Accountancy’ is having
a broad spectrum which includes recording, summarizing,
analysing and interpreting the financial transactions recorded.
The proper maintenance of the accounts will serve the
following purposes:
1) It gives profit or loss position of the business.
2) It gives the current information of outstanding creditors
to whom payment is to be made and outstanding debtors
from whom the debt is to be recovered.
3) It enables the entrepreneur to undertake comparative
study of income and expenditure of current year and
previous year, so that he can take the corrective steps to
curtail the expenses and increase the income.
4) It helps to know the financial health of the business
enterprise to enable the entrepreneur to make the
business plan accordingly.
5) It helps to comply with statutory requirements and
submission of statutory returns and timely deposit
of applicable taxes in the designated accounts of the
concerned authorities.
6) It helps to calculate the cost of products and the internal
rate of returns from the business
7) It helps in the preparation of investment planning for
investing surplus funds.

Accounts and Book- Keeping │ 131

Must do to derive maximum benefits from accounts:
a) Trained and well-experienced person should be
appointed for the accountant role.
c) Double entry system with a maker and checker system
should be followed.
d) Advance software systems should be used like tally
prime.
e) Regular posting of transactions should be done every
day.
f] Generate the reports daily to monitor the business of the
company.

Important action points:

1] Generate a balance sheet and Profit and Loss Account
every month and study the strengths and weaknesses of
the enterprises.
2] Get the cash flow statement prepared for the next year
and compare it with actual figures at monthly intervals.
3] Regularly reconcile the bank statement.
4] cash balance should be tallied regularly
5] Any amount payable should be paid before the due date.
6] Item of expenses should be checked.
7] Entries for refunds and returns should be checked
invariably.
8] Debit entries to the profit and loss account should be
passed with the permission of the entrepreneur or other
competent authority of the enterprise.
9] Timely arrangement of funds should be made if there is
a requirement of funds is there in the unit.
10] Surplus funds, if any, should be parked in the bank
account in such a way that it earns some interest.

132 │ Dreamer to Entrepreneur

 11] Daily vouchers should contain all the details about the
transaction and every money should be tallied at the end
of the day.

Types of books and to be maintained.

1. Cash Book and Bank book.
2. Ledger.
3. Trial balance.
4. General ledger.
5. Contra entries register.
6. Payment register.
7. Receipt register.
8. Debit note/credit note register.
9. Bank reconciliation book.
10. sales register.
11. purchase Register.
12. Stock Register.
13. Dead Stock Register.
14. Salary register.
To sum up, entrepreneurs should introduce an advanced
system of accounts and bookkeeping to monitor all the financial
transactions in their enterprises and closely supervise and
monitor the same to ensure the correctness of transactions and
better management of funds available with their enterprises.

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Accounts and Book- Keeping │ 133

 CHAPTER 27

Human Resource Management

Entrepreneurs alone cannot manage their enterprises and
will need a mentor and team of people having experience and
expertise in the job that will assign to them.
In the beginning stage of a small enterprise, approximately
6 to 7 employees may be sufficient. Entrepreneurs must be
careful in recruiting the right person for the right job. A person
from finance and accountancy will be suitable for finance and
accountancy jobs for enterprises.
Entrepreneurs should select competent people to perform
their job with dedication and sincerity. They should be loyal
to you and your enterprise and believe in teamwork. While
recruiting people apart from their educational background and
job-related experience, some psychological assessment is also
necessary to have some idea about the positive mindset of the
person to become a team member of entrepreneurs.

1]. Common Recruitment Sources:

There are multiple sources of recruitment but most commonly
sources used by the company for recruitment are as under -
1] Online recruitment portals
2] Referrals from the employees or professional friends
3] Persons working in nearby factories wish to change their
job.
4] Universities, institutes, and colleges

134 │ Dreamer to Entrepreneur

 5] Social media.

1. Recruit the right people for right kind of job:

Entrepreneurs should have a very careful approach in
recruitment of people for their enterprises. They should first
work out what are job vacancy to be filled immediately or in a
phased manner. After that they should specify that what should
be the eligibility criteria keeping in view the requirement of the
job for the candidates such as –
1] Educational qualification.
2] Experience and expertise.
3] skill
4] Age
The entrepreneurs should also specify what will be the salary
and other benefits for each job because the salary and benefits are
important considerations for the candidate to accept the job offer.
This is also true that highly talented candidates expect higher
salary and benefits, but the attrition rate is also high among the
highly talented candidates. It’s therefore advisable to recruit
the average rank candidates so that they can stay with your
enterprise for a longer period. Recruitment is a critical issue and
therefore entrepreneurs should act as smart professionals and
recruit the right kind of person according to the right kind of job
for him and remember that the person who has been recruited by
you should be able to start the work immediately on his joining.
It will be always good to be on lookout for right kind of people
so whenever the vacancy arises, you can recruit the people of
your choice and you can feel comfortable with their capabilities
to handle the job efficiently.

3] Recruitment process:
Whatever the sources of recruitment, the structured
recruitment process should be followed. First the application in
the structured form should be called by the candidates. Thereafter

Human Resource Management │ 135

all the applications received should be scrutinized and suitable
candidates should be shortlisted for the interview. The interview
date and mode of the interview such as on telephone, video
call, or in person should be decided and communicated to the
candidate. The interview should be conducted systematically
by the interviewer to identify whether a person has the skills
and abilities for the required job. Once the candidates selected a
list of all successful candidates should be prepared, and further
process should start for onboarding the selected candidates in a
systematic manner.
First, issue a written order to the selected candidates for
employment, mentioning therein all the terms and conditions
of the appointment. The probation period, if any, should be
mentioned invariably in the offer letter. After acceptance of the
offer letter by the candidates, a regular appointment letter should
be issued and got it accepted by the candidate. After this process
the candidate will join on the joining date for that entrepreneurs
should obtain the joining letter from the candidate.

4. Staff Training programs:

The entrepreneur should consider imparting training to
the staff to enable them to perform their job properly. Training
for specific skills, if necessary, should also be arranged. It is
well known fact that training in the related field to upscale the
skills and knowledge will result in better performance of the
employees.

5] Facilities to employees:
Retention of talented employees is a challenge for the
enterprises. Many factors play role in employee’s attrition from
enterprise. However, the facilities provided to the employees
play some role in employees retention. Some of the facilities
which can be given to employees must be considered by the
employer are as under.

136 │ Dreamer to Entrepreneur

 1] Leave entitlement 2] Health insurance 3] Travelling in
upper class and lodging and boarding in good hotel while on
official duty 4] Success related incentives and appreciation etc.
5] Bonus as per provision of law. 6] contribution to employees’
provident fund etc. 7] Regular salary hike based on performance
appraisal of the employees, 8] Regular promotion of deserving
employees to the higher cadre. All the above facilities will
keep the employees moving on their toes for the growth of the
enterprise.
To sum up, entrepreneurs should consider the performance
link salary and incentive to attract the talented candidate to their
team and to overcome the challenges of attrition of employees.

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Human Resource Management │ 137

 CHAPTER 28

Time Management
Entrepreneurs need to balance their busy work schedules
and personal life, otherwise, it can lead to avoidable work
pressure and adversely affect the way we think and make
decisions. Hasty decisions can lead to costly consequences. The
secret to good corporate governance is good time management.
For your business to work like clockwork, you need to manage
your time schedule. Poor time management only affects
the morale and efficiency of the company’s employees. The
company’s decision-making powers are mostly vested at the
managerial level, therefore time management at the managerial
level is a must to ensure prompt decisions. Delays in making
decisions or responding to problems due to non-availability of
the managerial-level executives can be costly business mistakes.
Therefore, entrepreneurs must learn, practice, master, and make
time management as a part of their life to become successful
entrepreneurs.
Once you develop time management skills at work, you will
automatically find that you can apply them to other areas of your
life.
1. Tools for good time management:
2. Planning of work
3. Prioritization of work
4. Preparation of attending the work

138 │ Dreamer to Entrepreneur

 5. Delegate the work to competent employees as per their
capabilities.
6. Resource allocation to complete the as planned.
7. Follow up by review of progress of the work.
These tools are guides to good time management practices
for both individuals and organizations.

Time Management Skills:

Planning of work-
Good planning of the work is the most important aspects of
good time management. Knowing what status is as of now and
what shall be the future status will help you plan your time more
efficiently.
Find out what’s going on in your organization. Anything
that can impact resources or become a serious problem for the
business should be analysed first and resolved as a priority.
Prepare the estimation of the bill of quantity and type of work
required to address the issue, who will do what, and how long it
will take. If Everything you do early in your preparation, it will
take your pressure off and can attend other important matters
comfortably.
For example, if your company is currently bidding on an
important contract for supply of products manufactured by
your company. You need to analyse the resources that would be
required if the contract were won. You must answer to yourself
the question like –
Do you need additional staff? Do your employees need special
training to meet the products requirement as per specification
given by customers? do you need to change your system? Do
you need special equipment? Who will lead the process? What
are the key points? What will be the milestones? Knowing the
answers of above questions and keeping yourself well prepared,

Time Management │ 139

will help you to plan and ensure that your business is ready
when the time comes. It not only reduces purchasing pressure,
but also ensures customer satisfaction.
Estimating how long a task will take is very important. If
accurate estimates are difficult, divide the task into smaller
chunks before estimating the entire task at once. Knowing who
does what, and in what order is also important. Set deadlines for
each milestone and make sure everyone is aware of them.
Preparation and planning are essential for any job, no matter
how small.
Get things done properly and on time. Nothing is worse than
putting something off until the last minute and then discovering
it’s taking longer than expected, and having the deadline pushed
forward.
Keep a diary and write accurately. Set deadlines for each task
or job and make sure you stick to them. Write down everything
you need to do each day in a diary and instantly predict how
busy you will be the day before.
Check your diary at the end of each day to see if you missed
anything!
Once a one chunk of task completed, move it to a new day
for next chunk of task and assign a new deadline. Please try to
stick to the plan. Unexpected things can happen, but with proper
planning, you can minimize the impact on your time.

Prioritization –
Evaluate your tasks for the day and come up with a priority
system. Critical Tasks, Important Tasks, Mandatory Tasks, and
Miscellaneous Tasks. Assign a priority to each task on the list and
assign importance within each priority. Once you have that, you
can start working on each task in order of importance. Even if
the day ends in chaos, at least the important tasks are completed.

140 │ Dreamer to Entrepreneur

 Most busy people will tell you that it is amazing how much
time you can spend in a day on your work and take out some
time to relax also.
If you can get a few things done at once, you can make the
most use of every minute.
Instead of waiting to get to the office to check your
appointments for the day, do it on your way to the office and
save time!

Preparation –
If you are prepared, you will not waste your precious time to
line up the work. There are many ways to get prepared such as
daily status update reports, ongoing work and works holds for
you for your approval, and anticipating what you will need at
your will can ensure that you are well prepared.
As I said earlier, knowing what is to be done in the future will
helps you to allocate resources and make you sure that everything
is ready when the time comes. You can add information and keep
your notes up to date throughout the month. When a meeting
arrives, it’s ready in minutes, not hours. It takes less pressure
and makes sure you haven’t forgotten anything or forgotten
anything important.

Resource Delegation and Allocation –

Learning to delegate effectively will make you more efficient
in comparison to everything you do by yourself. It’s about
using resources wisely. It doesn’t make sense for you to waste
3 hours trying to do something when someone else can do it in
his 30 minutes. We tend to waste time looking for information
or analysing something when someone else might already have
that information. You need to know your employees well, who
does what, and what their strengths are. Make the most of your
employees’ knowledge and skills.

Time Management │ 141

 Consider external resources if you need to do something of
special nature, as the services of specialists is available in almost
every field. Perhaps they have the knowledge, equipment and
even better, understanding of the work to be done. This will
allow you to handle other, more important issues.

Follow up –
Keep track of open issues so you don’t panic at the last
minute. Making sure that things are going according to plan and
that work is progressing steadily will help you feel comfortable
as you are sure of meeting deadlines. Procrastinating things until
the last minute or noticing that something hasn’t been done after
the deadline is not good time management.
Distribute and track tasks over time to make sure everything
is done and completed on schedule. If something is delayed, find
out why. The reason could be that the task was assigned to the
wrong person or something unexpected happened.
Keep track of all your tasks and deadlines so you can address
issues as they arise while they still have time.
There are many tools and management information systems
[MIS], regular monitoring reports, and software applications are
there to help you with proper time management. Make the best
of every tool available to you and ensure your time management
professionally in the best interest of your enterprise and yourself.

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142 │ Dreamer to Entrepreneur

 CHAPTER 29

Crisis Management
Crisis management is a business action plan that is quickly
executed when a negative situation arises. Crises disrupt the
way an organization does business. Typically, the crises can have
negative financial, legal, political, or regulatory consequences,
especially if not managed quickly and effectively.
In recent years, we get the news that company has recalled
the product particularly from vehicle segment because of some
defects noticed after the vehicle is launched in the market, which
is classic example of crisis management. In fact, a growing
percentage of companies are stepping up efforts to implement
effective crisis management strategies as they witness the damage
poor crisis management can do to their business enterprise.
Every business has hundreds of potential reasons which
create the crises like fires, loss of competitive secrecy, workman
strike, defective product, industrial accidents, natural disasters,
and system failure, data hacking and many more. A crisis
situation may cause financial and reputation loss to a company if
not handled properly.
The company should have a crises management plan [CMP]
or disaster recovery plan [DRP] and business continuity plan
[BCP] so that whenever any crises situation arises, the company
comes in action as per their CMP/ DRP and BCP is already in
place. It is highly recommended that everyone in the company
should be aware of the crises management strategies of the

Crisis Management │ 143

company except in the situation where the crises management is
to be handled at the management level only.
It is in the interest of the enterprise to assess whether their
industry is sensitive to various crises. They should study the
industry data, or work with consultants or subject experts to
understand how one or more crises could impact them. Once this
process of risk assessment is completed, the enterprise should
design a Crisis Management Plan (CMP) to determine how
negative events or disaster can be handled effectively to avoid
or reduced the loss, even the chances of such of any disaster
seems very less. Enterprises should also secure themselves
by comprehensive insurance policy, which is the best way to
mitigate the risks particularly when such risk or crises arise due
to the factors beyond the control of entrepreneurs.

Sudden crisis:
Many times, the crises are arising suddenly and without
any warning such as occupational accidents, natural disasters,
sudden death or disability of key management persons, sudden
breakdown of IT system, riots and violence etc. and to handle such
situation the enterprise should constitute a crises management
team, who will take the immediate appropriate action whenever
such situation arises.

Smouldering crisis:
When the enterprise anticipates or has advance notice such
as workers strikes, or power cut or there is chain of events which
leads to crisis, comes in this category. This type of crisis is to be
handled carefully when the entrepreneur notices its first sign and
takes the immediate action to mitigate the risk of crises. Sometime
these types of crises are difficult to notice but management and
employees both should give attention even to smallest signal
and should resolve the issues or problems immediately once for
all so that such crises do not recur in future.

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Crisis response:
In the event of a crisis, prompt and proactive communication
should be the focus of an organization’s crisis mitigation strategy.
In the crisis, effective communication is critical to positive public
perception. It can affect the perceptions of individuals and
organizations for a long period after the crisis is over.
Below is a list of some action which enterprises should
take when faced with crisis situations and undertaking crises
management steps.
1. Be open and honest with both the media and your
customers – An open and honest attitude with both
the media and your customers can certainly inspire the
customers and earn the constomer’s sympathy, especially
when a crisis is largely out of control of the enterprises.
2. Convey and respond quickly – Crises situation if it is
going to affect the customer’s interest adversely, the same
should be conveyed to them promptly and correctly and
whatever query received from them the same should be
responded correctly and quickly.
3. Use Only One Spokesperson – There should be one
spokesperson who is having the knowledge of the crises
should speak with the media if required and to the
customers otherwise many persons if they explain the
situation, they will do that in their own way, and it may
create the confusion among the people and customers.
To sum up, we impress upon the entrepreneurs to make a
Crises Management plan or a Disaster management plan together
with a Business continuity plan to effectively manage the crises
if any such situations arise in their enterprises and maintain
business continuity as usual.

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Crisis Management │ 145

 CHAPTER 30

Customer Relationship
Management
Customer Relationship Management (CRM) creates a
holistic view of customer needs, expectations, and behaviour
by analysing information from each customer transaction. CRM
creates the customer intelligence on which you need to build
customer relationships.
Customer relationship management (CRM) involves the
process by which companies track and organize their contacts
with current and potential customers. CRM software is used
to support these processes; information about customers and
customer interactions can be entered, stored, and accessed by
employees in different company departments. Typical CRM
goals are to improve services provided to customers, and to use
customer contact information for targeted marketing.
The term CRM refers to a software-based methods to handle
customer relationships, most CRM software vendors recommend
a holistic approach. The Success of CRM initiatives depend on
understanding of employees to learn and take full advantage of
the information systems.

Overview of CRM:
The customers believe that the business enterprise is a single
entity, even though they often interact with many employees of
all levels having different roles and responsibilities. CRM is a

146 │ Dreamer to Entrepreneur

compact package of policies, processes, and rules being followed
by the enterprise to unify its customer interactions and provide
ways and means to track customer information. It involves the
use of technology in attracting new customers, while retaining
existing ones. CRM includes many aspects that are directly
related to each other.
i. Front Office Operations – This is the process of direct
interaction with customers by way of face-to-face,
telephone, email, online services, etc.
ii. Back-office operations – Back-office operations
ultimately affect front office activities (e.g., billing,
maintenance, scheduling of work relating to customer
service, marketing, advertising, finance, manufacturing,
etc.)
iii. Business Relationships — These covers interactions with
other companies and business partners, suppliers, Dealers
and Retailers, industry Networks (Lobby, Groups, Trade
Associations) etc. This external network supports front
office and back-office activities.
iv. Analytics - Analyses key CRM data to plan targeted
marketing, designing campaigns, strategies to increase
the sales, and evaluating the success of CRM measures
(e.g., market share, number and type of customers, sales
volume, profitability).

Types and variations of CRM:

There are different CRM approaches with different software
packages that focus on different aspects. In general, customer
service, campaign management, and sales automation form the
core of the system.
i. Operational CRM - Operational CRM supports
business processes relating to sales force automation,
managing sales campaigns, Marketing, post sales
services etc. Customer interactions are typically stored

Customer Relationship Management │ 147

 in the customer’s contact history, allowing the concerned
employee to retrieve customer information as needed.
ii. Sales Intelligence CRM - Sales Intelligence CRM is
having features like sending alerts to sales staff for new
selling opportunities, customer trends, cross selling of
products, etc.
Customer drift Sales performance, Customer trends,
Customer margins, Customer alignment, and
Collaborative CRM, covers aspects of a company’s
dealings with customers that are handled by various
departments within a company, such as sales, technical
support and marketing. Employees from different
departments can share information gleaned from
customer interactions. For example, feedback received
from an accountant, his/her manager may provide
other employees with information about services or
features requested by customers. The ultimate goal of
collaborative CRM is to use the information collected
from all departments to improve the quality of service
provided by the company.
iii. Consumer Relations system - Consumer Relations
System “CRS” Covers aspects of consumer affairs within
the organization handled by the Customer Relations
Contact Centre. It provides early warning of product
issues (such as item recalls) and track consumer’s
sentiments.
iv. Geographic CRM - Geographic CRM (GCRM) is a
combination of Geographic Information System and
traditional CRM. Geographic data can be analysed to
provide a snapshot of prospects within a region or to plan
routes for customer visits.

Strategy:
Several CRM software packages are available with different

148 │ Dreamer to Entrepreneur

approaches to CRM. However, as mentioned earlier, CRM is more
than just technology, it is a holistic, customer-centric approach
to an organization’s customer-facing philosophy. This includes
policies and processes, front office customer service, employee
training, marketing, systems, and information management.
Therefore, it’s important that CRM implementation extends
beyond technology to the wider needs of the organization. The
goals of your CRM strategy are to consider your customers’
needs and expectations, as well as your company’s specific
policy. Information collected through CRM initiatives helps
organizations in areas such as onboarding new customer
segments, improving existing customer retention, improving
product offerings through a better understanding of customer
needs, and identifying the organization’s high value customers
and providing appropriate knowledge for the development of
marketing strategies.
CRM strategies vary in size, complexity, and scope. CRM
strategies should cover customer interactions across the
enterprises with sales, marketing, event management, project
management, and financial functionality.

Data protection and data safety:

One of the main functions of CRM software is to collect
information about customers. When collecting data as part of
a CRM solution, companies should consider their customer’s
desires for privacy and data security, as well as legal and
cultural norms. Some customers prefer to double-check that
data is not shared with third parties without prior consent and
that safeguards are in place to prevent unlawful access by third
parties.
To sum up, entrepreneurs should make the best possible
use of the CRM system to ensure customer satisfaction, increase
repeat sales, and onboard new customers to increase sales and
scale up their business enterprises.

●●●

Customer Relationship Management │ 149

 CHAPTER 31

Failure of Enterprises – Symptoms,

Reasons and Remedy
We all are aware that after some period from the date of
establishment of the unit, some units start showing signs of
sickness. Before any unit becomes sick it gives an early warning
signal and entrepreneurs should keep a close watch on these
early warning signals. They should identify the problem, and
its reasons and take the appropriate action at the early stage
before the small problem turns into a big problem. The unit is
treated as a sick unit if it has made a loss in the previous year
and going to make a loss in the current financial year also. We
discuss hereunder in detail, the warning signal/symptoms,
reasons/causes, and remedy to prevent the sickness or failure of
enterprises.

1. Warning signals of the unit going towards sickness are

as mentioned below:
a) Capacity utilization reduced.
b) Liquidity crunch and therefore not in a position to meet
financial liabilities on time.
c) Non submission/delayed submission of stock statement
and other monitoring statements to banks.
d) Increase in sundry creditors due to non-payment of their
dues in time.

150 │ Dreamer to Entrepreneur

 e) Mis management of inventory as supplier do not supply
the material on credit.
f) Unsatisfactory conduct of bank account. Delay in
payment of term loan instalments.
g) Frequent request to banks for Temporary overdraft.
h) Decline in sales turnover and profit.
i) Delay in payment of taxes.
j) Timely auditing of books of accounts not done.
k) High attrition rate of employee.

2. The causes/reasons of failure of business enterprises

may be one or more and can be divided in to two categories
with remedial measure as below:
i. External factors responsible for failure of unit:
a) Change in the government policy, particular products
are banned by the government. -
Reasons – Govt policy may change as per the socio-
economic development plan, harmful impact on the
environment due to products or processes, or any other
reasons.
Remedy – Change or modify the product in accordance
with govt policy. Keep informed with the upcoming
changes in the Govt policy and take action to modify
or change the product or process if possible or change
the business activity itself in case no other options are
available.
b) Natural calamities – Drought, flood, Pandemic and Fire
etc.-
Remedy – Every enterprise should have a Disaster
management team and team should start the action
immediately to minimize the loss and help the business

Failure of Enterprises – Symptoms, Reasons and Remedy │ 151

 to continue.
c) Other external factors – Fire, theft, burglaries, strike,
system breakdown, market recessionary trend etc.
Remedy – [For b and c]. Enterprises should have a
Disaster management team and team should start the
action immediately to minimize the loss and help the
business continuity team to continue the business of the
enterprises. Comprehensive Insurance policy must be
obtained covering eligible risk to the maximum extent to
protect the unit from the loss if such situation mentioned
in point no. a] and b] above arises.

ii. Internal factors responsible for failure of unit:

These factors are directly related to the weakness in the
working of the unit. Reason lies in the entrepreneurs or in
the enterprises in any one or all its functionalities. We discuss
hereunder the internal factors responsible for failure of unit and
the remedies available to prevent the failure of the unit.
a) Entrepreneurs always require to be a thought leader
and build a team of competent personnels. They should
cultivate the culture of team spirit in their enterprises.
Entrepreneurs should believe in proper delegation
of powers to their team members. Wherever the
entrepreneurs or their key management personnel do not
take the right decision at the right time, the enterprises
cannot perform well. Teamwork is necessary for the
success of the enterprises.
Remedy – The entrepreneurs are expected to develop
leadership qualities so that they can run their enterprises
successfully.
b) Selection of wrong products – If products are not
selected or updated/improved from time to time after
proper market study of demand and supply position,
customer’s need, choice, preference or market trend, the

152 │ Dreamer to Entrepreneur

 product may not pick up sale volume or sale volume
start declining.
Remedy – Entrepreneurs should make changes in their
products as per market demand from time to time
keeping in view the customer’s needs and choices. Even
printing and packaging should also be developed as per
preference of the customers and market trend.
c) Selection of old technology-based plant and machinery-
The old technology-based plant and machinery will have
less capacity, more wastage, poor quality products with
a high cost of production. This all makes the products
less finished, and entrepreneur must price it more under
compulsion keeping in consideration of high cost of
production which have combining effect of declining in
market share in comparison to other competitors having
latest technology-based machines and because of that
their cost of production comes less and therefore they
can price their products on lower side.
Remedy – The entrepreneur should always go for latest
technology-based plant and machinery.
d) Delay in implementation of project and achieving
commercial operation date – This kind of delay in
completion of project and achieving commercial
operation date shall increase the cost of project and will
have adverse effect on project profitability.
Remedy – Entrepreneurs should follow the
implementation strictly and start commercial operation
on the date fixed for that purpose.
e) Delay in sanction and disbursement of loan – This may
delay the project if term loan is delayed and it will delay
the production of goods if the working capital is not
sanctioned or released in time, which are not desirable
for achieving targeted production and sales volume of

Failure of Enterprises – Symptoms, Reasons and Remedy │ 153

 the enterprises as per their business plan.
Remedy - The entrepreneurs should submit their credit
proposals well in advance and answer all the queries
if any asked by the banks as fast as possible so that the
credit facility can be sanctioned and disbursed by the
bank on time.
f) Power shortage – This may hamper production if there
is a power shortage or frequent power cut in the factory
area.
Remedy – Entrepreneurs should have the provision of a
power generator to overcome the power shortage/power
cut, so that their production process is not hampered.
g) Non availability of skilled/unskilled labour – This aspect
directly affects production if the labours of desired
skilled or unskilled labours are not available.
Remedy – The enterprises should have proper human
resource management policy and benefits as prevalent
industry trend with some extra benefits. This will
motivate the workers to work in your enterprises.
h) Fund diversion – If working capital funds are diverted
for the creation of fixed assets or non-current assets it
will create a shortage of working capital funds and unit
may find it difficult to purchase the raw material and
meet operational expenses. This will lead to a decline in
production and ultimately sales. Apart from the above
funds are siphoned out from the unit for some other use,
which will also create a working capital shortage for the
unit. Fund diversion or siphoning out of the funds is
treated with disfavour by the bank and the bank shall
recall all the credit facilities from the borrowers.
Remedy – Entrepreneurs should never divert the funds
internally or siphon out the funds for some other use

154 │ Dreamer to Entrepreneur

 outside the enterprises even for temporary purposes.
i) Operational or technical problem – Many times
operational problems arise in the day to day running of
the unit or there may be sudden breakdown of machinery
or system which may lead to decline in production.
Remedy – Unit should have proper personnel to handle
the problem and restore the production as soon as
possible.
j) Absence of proper Marketing strategies- The marketing
of the product is main aspect of business enterprises
which bring the sales, but if proper marketing strategies
or market study and status of demand and supply is not
in place, it may affect the sales of the unit drastically.
Likewise, the study of market competition from other
competitors is also important to make the proper market
strategies.
Remedy – The entrepreneurs should update their
marketing strategies from time to time, continue to
conduct market study, analyse the data of demand and
supply position, customer’s needs and take feedback of
customers. The entrepreneurs should collect information
on quality and prices of the products from competitors
and their market share and accordingly they should
make their marketing strategies to win the better share
of their product in the market.
To sum up, entrepreneurs should keep a close watch on
the warning signals of sickness, and on observing any signal
relating to sickness in the enterprises, they should take remedial
measures immediately.

●●●

Failure of Enterprises – Symptoms, Reasons and Remedy │ 155

 CHAPTER 32

Leadership
Leadership is one of the important aspects which must be
developed by every human being. Effective leadership is required
to lead and guide the subordinates to perform organizational
tasks effectively and efficiently. Leadership is the activity of
influencing people to strike willingly for group objectives. It’s
worth quoting the following thoughts here-
“True leadership lies in guiding success -in ensuring that
everyone is performing all their best, doing they are pledged to
do and doing it well” – Bill ovens [Graciousquotes.com]
“Leadership is not a position or title; it is action and example”
– Cory Booker [ www.Idleheart.com]
The above quotes are self-explanatory and convey what
leadership means. We discuss here under the following aspect
of leadership:

A] Characteristics of successful leaders. -

1] Health conscious – It is a famous quote that “health
is wealth. The leaders know importance of physical
and mental fitness to work with full potential, remain
active and alert, feel energetic to achieve their goal.
Entrepreneurs should always keep themselves physically
and mentally healthy.
2] Communication- The communication is an art and
science of conveying message written or verbal

156 │ Dreamer to Entrepreneur

 completely without any distortion from one person to
another person or group. The leaders always effectively
convey their messages maintaining clarity of expression,
well organised, politeness and courtesy in their messages
so that the person or people should receive the message
in same meaning and same sense in which the messages
are sent. Entrepreneurs should learn the skill and style of
effective communication.
3] Cool and calm - The leaders keep themselves cool and
calm in every situation thick or thin because they know
that they can take the right decision when they remain
cool and calm state of mind. Entrepreneurs should
also keep themselves cool and calm and maintain their
balance of mind to take the right decision at the right
time irrespective of situation.
4] Delegation- Leaders believe in delegation of powers to
the down the line executives so that their executives take
the decision on time and need not to wait for decision
from the leaders. This will expedite the decision-making
process and works are completed in a faster way. The
Entrepreneurs should also make it a practice to delegate
the powers down the line and guide their executive to
take the decision with courage and confidence even if
any of the decision go wrong, the leaders protect the
executives if they have taken the decisions in good faith
and in the interest of the organization. The entrepreneurs
may involve in some other important work if they believe
in capabilities of their executive and delegate the powers
because if they try to attend everything it’s going to be a
tough task for them.
5] Not argue but discuss- Leaders do not make argument to
through their ideas to implement but they discuss their
ideas with their team, listen the views of the team, get
convince or make them convinced by healthy discussions

Leadership │ 157
 and then take the appropriate decision to implement the
ideas.
This practice makes every team member to feel happy
that their viewpoints are always taken into consideration
by their leader. Entrepreneurs should also adopt the
same approach of participation of their team in decision
making process with practicing of healthy discussions.
6] Knowledge and skill – Successful leaders always invest
in themselves to enhance their knowledge and skills
and learn and adopt the latest processes and techniques
related to their work and keep them updated on latest
developments in all other areas at national as well
as international. Entrepreneurs should also invest in
themselves to enhance their knowledge and skills for
their successful entrepreneurial journey.
7] Focused Approach and team spirit – Leaders believe in
team spirit and have their focused approach to achieve
their goal as per their vision and mission with the
support of their team. They do not divert their attention
on other things easily and keep on moving ahead as per
their strategic plan to achieve their goal with the support
of their team. Entrepreneurs should also have the above
approach to achieve their goal.
8] Thought leader - The successful leaders are thought
leaders who inspire the others with their knowledge,
experience, and expertise in their work as well as their
awareness about what is happening all around. The
thought leaders are having very positive outlook towards
life and built in character of great human being.

158 │ Dreamer to Entrepreneur

It is relevant to quote here-
If your actions inspire others to dream more, learn more, do
more, and become more, you are a leader. – John Quincy Adams
[www.businessmanagementblog.com]
The entrepreneurs should be the thought leaders and inspire
others by virtue of establishing their authority as an expert in a
specific area of their working, building a trust among employees
and customers and providing innovative solutions to industry
challenges and innovative products, process, and services to
the world. This will make their enterprise outstanding among
the other enterprises, and they become the source of inspiration
to others in addition to winning performance of their own
enterprise.

B] Roles and responsibilities of leaders. -

Leaders are having various role/responsibilities of which are
discussed here under:
1. Goal fixation:
The leadership must set the goals and objectives for
their enterprises and sensitize their entire team to
achieve the goal. Goal setting is one of the important
functions of the leaders. The goals may be set up by the
leaders themselves, or they may take the help of their
management team in goal setting.
2. Develop high Morale of their employee:
One of the important functions of a leaders is to develop
high morale in their employees. They always strive
hard to keep their employees happy, so that they can
enjoy their work. They always try to develop a positive
attitude of their employees.

Leadership │ 159
 3. Participation in growth:
The leaders influence the employees to work willingly
towards achievements of objectives of the enterprises.
Good leaders always motivate the employees to work
hard and smart, and as a team member with other
employees. Leaders takes an active part in the activities
of the team as a team member.
4. Initiative and suggestions:
Leaders welcome new innovative suggestions and ideas
from the employees for the growth of the enterprises.
They create a healthy environment in which employees
work as a team to fulfil the objectives of the enterprises.
5. Team Spirit:
The leaders give priority in team building in their
enterprises. In case if any difference of opinion arises
among their employees, they strive hard to resolve
the differences so that team spirit is maintained in the
interest of enterprise. Good leaders believe in “WE” and
not “I” policy.
6. Opportunity:
The leaders provide the opportunity to their employees to
participate in various forums, meetings, and conferences
to express their views with higher authorities within or
outside of the enterprises.
7. Building confidence:
Good leaders build confidence in their employees. They
make them courageous to take decisions in the interest of
enterprises even in adverse situations and to teach them
how to face the challenges keeping the balance of mind
in challenging situations.

160 │ Dreamer to Entrepreneur

 8. Friend, philosopher, and guide:

It is worth to quote here-

“A good objective of leadership is to help those who are
doing poorly to do well and to help those who are doing well to
do even better” – Jim Rohn [success.com]
Effective leaders work with the team as a friend, philosopher,
and guide, improve their skills, and competencies to their
full potential and keep the team highly motivated to work for
the organization dedicatedly, and diligently to achieve the
organizational goal.
To sum up, we want to impress upon entrepreneurs to become
leaders, reach the level of thought leaders, and effectively lead
their teams to achieve their goals.

____________________ XXX ____________________

Leadership │ 161
 Acknowledgement
First, I would like to thank the Almighty for giving me this
wonderful life, and inspiring, loving, and caring parents, my
father late, Shri Babulal Jain, and my mother, the late Smt. Shanta
bai Jain. I always feel their presence with me, which gives me the
strength to face life’s challenges and keeps me moving.
Secondly, a big thanks to my wife, Smt. Sunita Jain for being
with me in all thick and thin positions and supporting me to keep
working, not for my own or family but for society in general and
the young entrepreneurs in particular.
Thirdly I express big thanks to my son Abhishek who is always
taking our best care in all possible ways. He always inspires me
to share my expertise and experience with the people at large
and help them start their entrepreneurial journey: Abhishek, my
big hug to you for being a lovely son.
I also express my special thanks to Shri Amit Goel, Managing
Director of Prodigee Finance Ltd, who constantly inspires me
to write this book to benefit youth looking for self-employment
opportunities to become successful startup entrepreneurs.
Last but not least, I thank you very much to all the readers
who picked up this book to become unstoppable startup
entrepreneurs. I am grateful to all of you for your encouragement
to continue my mission to spread and support entrepreneurship
development worldwide. Please keep this book always with you,
not only as a book but as your friend, philosopher, and guide
in your entrepreneurial journey. Please give feedback/reviews

162 │ Dreamer to Entrepreneur

about this book on the platform from where you purchased it so
that other aspirant entrepreneurs will be encouraged to read it to
start their entrepreneurial journey.
Thanking you all.
With profound regards.

Dr. Suresh Jain

[Author]

Acknowledgement │ 163