Entrepreneurship Development and Small Business Enterprise

Cover
About the Author
Preface
Acknowledgements
Contents
Chapter 1: Modern Small Business Enterprises
Role of Small-scale Industries
Impact of Globalisation on SSI in India
Impact of the WTO on SSIs
WTO: Pros and Cons
Concepts and Definitions of SSI
Calculation of the Value of the Plant and Machinery
Government Policy and Development of the Small-scale Sector in India
Industrial Policy 1991
Policy Initiatives Since 1999
Growth and Performance of Small Scale Industries in India
Pre-and Post-liberalisation Periods
Performance of Small-scale Industries in India
Share of Small-scale Industrial Units in Total Exports
Third All India Census of SSI Sector
Small and Medium Enterprises (SME) in Other Countries
International SME Network (lNSME)-Background
Composition of INSME Steering Group
Definitions of SMEs in Various Countries
Problems for Small-scale Industries
Prospects of the Small-scale Industries in a Free Economy
Quality Control
Marketing Arrangements
Advertisement
Recovery of Receivables
Professionalism in Management
Inventory Control
Opportunities
Summary
Key Words
Exercises
References
Annexure 1.1
Annexure 1.2
Chapter 2: Entrepreneurship
Importance of Entrepreneurship
Charms of Being an Entrepreneur
Why Should You Become an Entrepreneur?
Concepts of Entrepreneurship
Various Definitions of an Entrepreneur
Entrepreneurial Development Process
Characteristics of a Successful Entrepreneur
Classification of Entrepreneurs
(a) Based on Functional Characteristics
(b) Based on the Developmental Angle
(c) Based on Types of Entrepreneurial Business
(d) Based on the Nine Personality Types of Entrepreneurs
(e) Based on Schools of thought on Entrepreneurship
Myths of Entrepreneurship
Entrepreneurial Development Models
(a) Psychological Models
(b) Sociological Models
(e) Integrated Models
Problems Faced by Entrepreneurs and Capacity Building for Entrepreneurship
Internal Problems of Entrepreneurs
External Problems of Entrepreneurs
Specific Management Problems
Capacity Building for Entrepreneurship
Profiles of Successful Entrepreneurs
Rags to Riches-Dhirubhai Ambani
The Nirma Story-The Saga of Karsanbhai Patel
Business opportunity identification
The King of Omega-3-P.J. ). Kunjachan
Summary
Key Words
Case Studies
Exercises
References
Chapter 3: Women Entrepreneurs
Women Entrepreneurship Defined
Definition
Importance of Women Entrepreneurs
Factors Influencing Women Entrepreneurs
Women Entrepreneurship in Asia
Women Entrepreneurs in India
Women Entrepreneurship Environment
Status of Women Entrepreneurs
Challenges in the Path of Women Entrepreneurship
Lack of Confidence
Problems of Finance and Working Capital
Socio-cultural Barriers
Production Problems
Inefficient Marketing Arrangements
Strategies for the Development of Women Entrepreneurs
Empowerment of Women by Entrepreneurship
Grassroot Entrepreneurship through Self-help Groups (SHGs)
How do SHGs Work?
The SHG System
Various SHG Activities to Promote Entrepreneurship
Institutions Supporting Women Entrepreneurship in India
Consortium of Women Entrepreneurs of India (CWEI)
Federation of Indian Women Entrepreneurs (FIWE)
Federation of Ladies' Organisation (FLO)
Women's India Trust (WIT)
Cent Kalyani of Central Bank of India Credit Schemes
National Bank for Agriculture and Rural Development (NABARD)
State Government Schemes for Development of Women and Children in Rural Areas (DWCRA)
Small Industries Development Bank of India (SIDBI)
Self-Employed Women Association (SEWA)
Association of Women Entrepreneurs of Karnataka (AWAKE)
Women Entrepreneurs in India
Profiles of Successful Women Entrepreneurs
Kiran Mazumdar Shaw
Shahnaz Hussain
Ritu Kumar
Women's Organisations Supporting Women's Entrepreneurship
Shri Mahila Griha Udyog Lijjal Papad
Mahila Bunkar Sahakari Samiti
SABALA: Crafting Exports of Indian Handicrafts
Importance of the Indian handicraft industry
Summary
Key Words
Case Studies
References
Chapter 4: Institutions Supporting Small Business Enterprises
Introduction
Central Level Institutions
1. Small·scale Industries Board (SSI Board)
2. Khadi and Village Industries Commission (KVIC)
3. Small Industries Development Organisation (SIDO)
Institutional network
Services provided by SIDO
SIDO schemes
4. National Small Industries Corporation Ltd. (NSIC)
(a) Machinery and Equipment (Hire-Purchase Scheme)
(b) Machinery and Equipment (Lease Scheme)
(c) Financial Assistance Scheme
(d) Assistance for Procurement of Raw Material
(e) Marketing Assistance
(f) Government Store Purchase Programme
(g) Technology Transfer Centre (TTC)
5. The National Science and Technology Entrepreneurship Development Board (NSTEDB)
6. National Productivity Council (NPC)
7. National Institute for Small Industry Extension and Training (NISIET)
8. National Institute for Entrepreneurship and Small Business Development (NIESBUD)
9. Indian Institute of Entrepreneurship (IIE)
Objectives
10. Entrepreneurship Development Institute of India (EDII)
State Level institutions
1. Directorate of Industries (DIs)
2. District Industries Centres (DICs)
3. State Financial Corporations (SFCs)
4. State Industrial Development/Investment Corporation (SIDCs/SIICs)
5. State Small Industrial Development Corporations (SSIDCs)
Other Agencies
1. National Bank for Agricultural and Rural Development (NABARD)
2. Housing and Urban Development Corporation Ltd. (HUDCO)
3. Technical Consultancy Organisations (TCOs)
4. Non-governmental Organisations (NGOs)
Sub-contract Exchanges Set up By NGOs
Launching of Scheme
Setting up of SCXs by Industrial Associations
Quantum of Assistance Provided
Sub-contract Exchanges for Ancillary Development
Testing Centres Set up by NGOs
5. Small Industries Development Bank of India (SIDBI)
Origin and Objectives
Domain of service
Channels of assistance
Development and support services
EDPs of SIDBI
6. Scheme of Micro Finance Programme
Salient features of Micro-Finance programme
7. Export Promotion Councils (EPCs)
Industry Associations
1. Confederation of Indian Industry (CII)
2. Federation of Indian Chambers of Commerce and Industry (FICCI)
3. PHD Chamber of Commerce and Industry (PHDCCI)
4. Associated Chamber of Commerce and Industry of India (ASSOCHAM)
5. Federation of Indian Exporters Organisation (FIEO)
6. World Association for Small and Medium Enterprises (WASME)
7. Federation of Associations of Small Industries of India (FASII)
8. Laghu Udyog Bharati (LUB)
9. Indian Council of Small Industries (lCSI)
10. Council of Scientific and Industrial Research (CSIR)
11. Venture Capital
Summary
Key Words
Exercises
References
Annexure 4.1
Chapter 5: Setting Up a Small Business Enterprise
Identifying the Business Opportunity
Business Opportunities in Various Sectors
Green Business
Biotechnology
Events Management
IT Enabled Services
Food, Fruits and Vegetables Processing, Refrigeration, and Transportation
Mineral Water
Courier Services
Insurance Sector
Telecommunication
Herbal Sector
Tourism Sector
Vermiculture
Plastic
Fonnalities for Setting Up of a Small Business Enterprise
1. Selection of a Project
(a) Product or Service Selection
(b) Location Selection
(e) Project Feasibility study
(d) Business Plan Preparation
(e) Project profile
2. Decide on the Constitution
(a) Sole Proprietorship
(b) Partnerships
(c) Corporation/Limited company
(d) Cooperatives
(e) Franchising
3. Registration
Obtain SSI Registration
Provisional Reg;stration Certificate (PRC)
Registration Formalities
Permanent Registration Certificate (PMT)
Registration Formalities
Registering an SSI Unit
Benefits of Registering
Objectives of the Registration Scheme
Features of the Registration Scheme
Basis of Evaluation
4. Clearances from Specific Departments
5. Arrange for Land/Shed
Industrial shed
Application formalities
6. Arrange for Plant and Machinery
Direct Purchase
NSIC Hire Purchase Scheme
Process Selection
Raw Materials
Machinery and Equipments
Value of Machines
Earnest Money
Administrative Charge
Period of Repayment
Gestation Period
7. Arrange for Infrastructure
Land and Construction of Building
Getting the Utility Connections
8. Prepare Project Report
9. Apply and Obtain Finance
Means of Finance
Arranging Finance
10. Implement the Project and Obtain Final Clearances
Construct Shed
Environment Pollution Related Clearances
Summary
Key Words
Exercises
References
Annexure 5.1: Business Plan
Annexure 5.2: Project Profile
Annexure 5.3
Annexure 5.4
Chapter 6: Family Business
Importance of Family Business
Family Business Defined
Various Types of Family businesses
The "3-Circle" Model of Family Business
Family Business System Governance
Family business system governance structures
Governance of the family business
History of the Family Business
Primary Benefits
Responsibilities and Rights of Family Shareholders of a Family Business
Succession in Family Business
Trends in the Growth of Successors in Family Businesses
First Family Succession Plan, Then Business Succession Plan
Family-first Business or Business-first Family
Succession Management
Business Valuation
Buy/Sell agreemfents
Succession Planning Obstacles in Family Businesses
Fairness equals performance expectations
Succession-Three Ways to Ease Transition
Pitfalls of the Family Business
Sibling Rivalry in Family Bussinesses: Key Issues
Coping Approaches
Arbitrary approach
Managed approach
Defusing Tensions
Strategies for Improving the Capability of a Family Business
Improving Family Business Performance
Concept of "Core Business Values"
Critical Core Business Values Impacting Family Business Performance
Training
How to Overcome Nepotism in Family Businesses
Management Development Plan in Family Business
Who Should Create the Plan?
Typical Agenda Items
Creating the Plan
Family Reunion Games Promote Family Values
How to Save the Family Business
Rule I: Formulale Policy Framework and Rules
Rule II: Families Must Serve the Business
Rule III: Future Outlook
Rule IV: Accountability
Rule V: Addressing the Issue
Rule VI: Creating Shared Vision
Seasonal Nature of the Business
Surplus or Non-operating Assets
Partial Interests and Fractional Interests
Environmental Problems-Your Worst Nightmare
Contingency Plan-for an Uncertain Future
Summary
Key Words
Case Studies
References
Chapter 7: Sickness in Small Business Enterprises
Definition of Sickness and Status of Sickness of SSIs in India
Present Status of Sickness of SSIs in India
Magnitude of Sickness in the SSI Sector in Country
Highlights of Third All-India Census on Sickness in SSI
Criteria to Identify Sicknessllncipient Sickness
Magnitude of Sickness/Incipient Sickness
Causes for Sicknessllncipient Sickness in SSI
Exogenous Factors
Endogenous Factors
Finance Management
Symptoms of Sickness
Cures for SSIs' Sickness
Rehabilitation
Viability of a Sick Unit
Working Group on Rehabilitation of Sick Units
Case Studies
Summary
Key Words
Exercises
References
Chapter 8: Strategic Management in Small Business
Organisation Life Cycle
Start-up Stage
Expansion Stage
Consolidation Stage
Revival Stage
Decline Stage
Turning the Venture Around
Organisational Renewal Cycle
Strategic Management
Strategic Planning: The Challenge
Benefits of Strategic Planning
The Essence of Business Ethics
Case Study
Summary
Key Words
Exercises
References
Worksheet 8.1: Review the Organisation's Present Situation
Worksheet 8.2: History of the Organisation
Worksheet 8.3: Essence of Founders
Worksheet 8.4: Assess Your Strengths and Weaknesses
Worksheet 8.5: Conduct an Environmental Scan
Worksheet 8.6: Conduct Customer's and Competition Analysis
Worksheet 8.7: Scale for Swot
Worksheet 8.8: Assess Swot
Worksheet 8.9: Critical Issues or Choices that You Face Regarding the Future
Chapter 9: Financial Management in Small Business
Importance of Financial Management
Functions of Financial Management
Working Capital Management
Estimating Working Capital - A Simplified Approach
Valuation of Stock-in-Trade
Cost Formulas
Working Capital Schemes
Accounting and Book Keeping
The Accounting Process
Types of Books of Accounts
Specimens of Essential Books
a. Purchase Book
b. Sales Book
c. Cash Book
d. Journal
E. Ledger
Financial Statements
Balance Sheet
Features of balance sheet
Various accounts of balance sheet
Profit and Loss Account
How does a profit and loss account look
Cash Flow Statement
Financial Ratio Analysis
1. Return on Investment (ROI) Ratios
2. Solvency Ratios
3. Liquidity Ratios
4. Turnover Ratios
5. Profitability Ratios
6. Du Pont Analysis
7. Capital Market Ratios
Summary
Key Words
Exercises
References
Chapter 10: Marketing Management in Small Business
Importance of Marketing
Definition
Common Marketing Problems Faced by Small-scale Industries
Marketing Process
Customer Relationship Management (CRM)
Market Segmentation
Market Research
Marketing Mix
Product
Promotion
Price
Place
Marketing of Services
India's Growing Services Sector
Differences between Goods and Services Marketing
Key Success Factors in Services Marketing
Export Marketing
Foreign Trade (Development and Regulation) Act, 1992
Foreign Exchange for Export Promotion
Foreign Industrial and Technology Agreement
(i) Outright (Sale) exports
(ii) Consignment exports
Export Incentive Schemes
Procedural Simplification
New Markets
Sources of Finance
Prp-shipment finance
Post-shipment finance
Market Segmentation
Market Research
Product Characteristics
Export Pricing
Distribution Channel
Working Document
Procedures, Formalities, and Documentation
Obligations
Facilities and benefits
Applications and application forms
Pre-shipment formalities
Submission of documents to bank
Organisational Export Assistance
1. Policy and service support organisation
2. Commodity specilisation institutions
3. Training and rpsearch institutions
4. Trading/service corporations
5. Financial institutions
6. Export promotion zones (EPZs)
Indian Exporter's Directory
Summary
Key Words
Case Studies
References
Annexure 10.1: Salient Features of Export-Import Policy for the Small-Scale Sector
Chapter 11: Production Management in Small Business
Production Management
Plant Layout
Production Planning and Control (PPC)
Phases in PPC Function
1. Planning phase
2. Action phase
3. Control phase
Materials Management
Inventory Management
Inventory Costs
Inventory Control Techniques
Benefits of Inventory Control
Tips for Stock Keeping
Productivity
Improving Materials Productivity
Improving Labour Productivity
Cutting machine time
Handling, material on and off machines
Workplace layout
Working conditions
Equipment
New investment
Choosing new machines
Maintenance
Break-Even Analysis
Types of Cost
Break-even Point
Ways to lower break-even
Total Quality Management
"Quality" Defined
Managing for Quality
Total Quality Management
Quality Improvement Tools
Quality Systems
Quality Management Principles
Requirements of Quality Management System
(1) General
(2) Process Model
(3) Compatibility with other Management Systems
Quality Management Systems-Requirements
Steps to Certification Under
Environmental Management System
ISO 14000
Benefits of Environmental Management System
ISO 14001
Environmental Management Systems-Requirements
Summary
Key Words
Exercises
References
Chapter 12: Human Resource Management in Small Business
Importance of Human Resource Management
Functions of Human Resource Development
Human Resource Development
Industrial Relations. Labour Laws, and Environmental and Pollution Control Laws
1. Laws Regulating the Conditions of Work in Factories and Establishments
The Factoms Act, 1948
Special Provisions/or Industries involving Hazardous Processes
2. Laws Relating to Wages
Minimum Wages Act, 1948
Payment of Wages Act, 1936
3. Law Relating to Social Security Measures
Workmen's Compensation Act, 1923
Employees' State Insurance Act, 1948
Employus' Provident Fund and the Family Pension Act, 1952
4. Laws Relating to Workers' Associations and Disputes
Trade Union Act 1926
Industrial Disputes Act, 1947
5. Law Relating to Women and Child Workers
6. Laws Relating to Environment and Pollution Control
Water (Prevention and Control of Pollution) Act, 1974
Air (Prevention and Control of Pollution) Act, 1981
Environment (Protection) Act, 1986
Scope and Scheme
Summary
Key Words
Exercises
Case Studies
References
Index