(Supplementary Notes: Chapter 9 )

Subject: Business Studies

Grade: 11

Topics that are in the syllabus but not updated in few of the NCERT Text Books

Chapter 9: Small Business

Entrepreneurship Development (ED)

Entrepreneurship, Entrepreneur, and Enterprise

Entrepreneurship may be defined as a systematic, purposeful and creative activity of identifying a

business idea, undertaking the risk of mobilizing resources and organizing operations with a view to
deliver value (goods or services) for customers and return/profit for investors/self.

Entrepreneur is the person who conceives a business idea and sets up a business to give practical
shape to his idea.

The process followed by the entrepreneur is known as entrepreneurship. The outcome or result of this
process is the setting up of a business called enterprise.

Entrepreneur( Person) Entrepreneurship( Process) Enterprise (Outcome)

The above discussions brings about the following features of entrepreneurship:

I. Entrepreneurship is a systematic process of organizing business activities to implement the

business idea.
II. It is a purposeful or goal oriented activity. Its purpose is to create value for the customers and
to generate profits for the entrepreneur.
III. It is a creative and innovative process. The entrepreneur conceives new ideas and introduces
new methods of production, and new products.
IV. It assembles various resources and organizes them for the creation of value.
V. It involves risk-taking in business. The entrepreneur undertakes the risk of setting up a new
enterprise and manages to deal with the pressures of uncertain environment. He is thus the
bearer of risks.

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 Role of Entrepreneurship
In relation to Economic Development In relation to Enterprise
• Generation of employment • Opportunity spotting

• Contribution to GDP • Identification of specific product

offering.
• Increasing in the scope of • Assembling of resources.
economic activities.

The Central Government as launched programs like:

➢ Make in India
➢ Skill India
➢ Startup India
➢ Mudra Scheme

An Entrepreneurship Development Programmes is designed to help

young entrepreneurs in strengthening their entrepreneurial motive
and in acquiring skills and capabilities for playing their entrepreneurial
roles effectively.

The development process involves strengthening of KASH, i.e.

Knowledge, Attitudes, Skills and Habits of young entrepreneurs.

While developing entrepreneurs focus should be on the following

areas:
1. Creation of entrepreneurship friendly environment.
2. Development of entrepreneurial competencies.
3. Motivation of entrepreneurs.
4. Development of entrepreneurial attitudes.

1. Creation of entrepreneurship friendly environment:

Entrepreneurship development is encouraged by the following
facilities:
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 a) Well-developed infrastructure: The government has set up
several industrial estates and parks to encourage young people to
set up their business. Facilities like- power, roads, banks,
insurance companies, warehouses etc. are made available at the
industrial estates.
b) Concessional Finance: The government gives priority to small
businesses for extending them loans at concessional rates.
c) Tax concessions: Startups enjoy income tax exemption for a
period of three years. The government has also given some
exemptions in the compliance of GST to the small businesses.
d) Education and Training: Several institutes set up by the
Government conduct short-term Entrepreneurship Development
Programs for the young persons to provide them with adequate
knowledge and training for developing the required skills.

2. Development of Entrepreneurial Competencies: Entrepreneurship

Development Institute of India has identified a set of fifteen competencies
as stated below:

I. Initiative
II. Sees and Acts on opportunities
III. Persistence
IV. Information seeking
V. Concern for high quality of work
VI. Commitment to work target
VII. Efficiency orientation
VIII. Systematic planning
IX. Problem solving
X. Self confidence
XI. Assertiveness
XII. Persuasion
XIII. Leadership
XIV. Monitoring
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3. Motivation of Entrepreneurs:

David McClelland’s psycho theory of motivation gives an insight into the

minds of entrepreneurs. McClelland described people in terms of three
needs:
I. Need for Power: The need for power is expressed as a desire to
influence others. They often are persuasive speakers and demand a
great deal from others.
II. Need for Achievement: The need for achievement is satisfied with
the successful completion of targets. They take personal
responsibility for finding solutions to problems and take moderate
risks.
III. Need for affiliation: This need makes the people concerned with
making friendly relations with others. People dominated by
affiliation need would be attracted to ventures or jobs that allow
considerable social interactions.

4. Development of Entrepreneurial Attitudes:

I. Attitudes towards creativity and innovation
II. Attitude towards risk
III. Attitude towards initiative
IV. Attitude towards change
V. Attitude towards performance
VI. Attitude towards employees and customers

Startup India:
A startup is a new entrepreneurial venture that aims to create and market an
innovative product, service or process by developing a viable business model
and that aims to grow fast. According to DIPP, ‘Startup means an entity
incorporated and registered in India:
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 • Not prior to seven years, but for Biotechnology Startups not prior to
ten years.
• With annual turnover not exceeding Rs.25 crore in any preceding
financial year, and
• Working towards innovation, development or improvement of
products or processes or services, or if it is scalable business model
with high potential of employment generation or wealth creation.

Startup Ecosystem:
The size and maturity of the startup ecosystem where the startup is
launched and where it grows have an effect on the success of the startups.
(Entrepreneurs, venture capitalist, angel investors, universities,
entrepreneurship programs, incubators and accelerators).

Ways to Fund Startup:

1. Self-financing or Bootstrapping: Self-funding also known as

bootstrapping is an effective way of startup financing. They can invest
from own savings or can get their families and friends to contribute
capital.
2. Venture Capital: Venture capital represents professionally managed
funds who invest in companies that have huge potential. They provide
expertise, mentoring and act as a litmus test of where the business is
going, evaluating the business from the sustainability and scalability
point of view.
3. Angel Investors: Angel investors are individuals with surplus cash and a
keen interest to invest in upcoming startups. They offer mentoring or
advice alongside capital.
4. Incubators and Accelerators: Incubators are like parent to a child, who
nurture the business providing shelter, tools and training and network
to a business. Accelerators do more or less the same thing, but and an
accelerator helps to run or take a giant leap.
5. Banks: Startups can get loans for working capital from banks.

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 6. Government Programme: The union Government launched Rs.10, 000
crore ‘Startup Fund’ in its budget for 2014-15 to improve startup
ecosystem in the country.

Intellectual Property Rights:

Intellectual Property (IP) rights are legally recognized exclusive rights to the
creations of mind. Under the law, the owners of intellectual property are
granted certain exclusive rights to a variety of intangible assets.

Common type’s intellectual property rights include:

i. Copyright: it gives the creator of original work exclusive rights to it for a

specified period of time. Copyright protection is available in case of a
wide range of creative, intellectual work such as literary work, musical
composition, etc.
ii. Trademark: A trademark is a recognizable sign, design or expression
which distinguishes products or services of a particular trade from
similar products or services of other traders.
iii. Patent: It grants an inventor the right to exclude others from making,
using, selling or offering to sell for a specified period of time in
exchange for the public disclosure of the invention.
iv. Industrial Design: the visual design of objects that are not purely
utilitarian is an intellectual property. It can be two or three dimensional
pattern used or handicrafts.
v. Trade secrets: protects secret information( coke formula)

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