By going through these Maharashtra State Board Organisation of Commerce and Management 12th Notes Chapter 3 Entrepreneurship Development students can recall all the concepts quickly.
Maharashtra State Board Organisation of Commerce and Management 12th Notes Chapter 3 Entrepreneurship Development
→ Factors of production: The basic things or inputs or resources such as land, labour, capital and entrepreneur used in the process of production to produce economic goods.
→ Risk-bearing The function of a trader to assume some non-insurable risks such as risk of deterioration in the quality of goods due to passage of time, the risk of spoilage, fall in demand due to a change in fashion, etc.
→ Finance The provision of money for a particular purpose such as capital to build a factory or to run a business, or a loan to a farmer.
→ Technology A body of information and techniques and of skills and experience, developed for the practical purposes including production and use of goods and services.
→ Raw materials: Materials acquired to manufacture a product, e.g. sugar cane is the raw material for a sugar factory.
→ Research and development: Two closely related activities in modern industry by which new products and processes are being continuously developed especially by engineers, designers and scientists.
→ Human resources: The quantity, quality, character and calibre of the people working in a business enterprise. Human resource is one of the important resources of an organisation which makes other resources active.
→ Subsidy: Money or incentive given by the government to certain producers, such as farmers, to help them to produce without loss to themselves and yet at a low price, e.g. export subsidies to encourage foreign trade.
→ Tax holidays: Tax holiday means for the purpose of growth and development the government allows certain factories or industries established in backward areas not to pay any tax to the government for a certain period, say 5 years or more.
→ Capital formation: The practice by consumers of increasing their stock of wealth by not consuming it now; instead, some of it is used to increase the supply of capital goods such as machinery and buildings needed to produce further goods.
→ Auxiliary industries: Service (tertiary) industries such as transport, insurance, bank, etc. which provide supplementary or supportive services to primary and secondary industries.
→ Service tax: A tax levied by the government on various services rendered by the individuals, firms, companies, etc.
→ Corporate tax: A tax charged by the government on the assessable profits of individual firms or a limited company during each accounting period. The rate of corporate tax directly varies with the level of profits of the company. It is as good as income tax payable by companies to the government.
→ Value Added Tax (VAT): A tax levied on a product at each stage of manufacture or distribution in proportion to the estimated increase in its ultimate sales values.
→ Excise duty: An indirect tax levied on the consumption of particular goods. It is often levied at higher rates on the goods whose consumption are injurious or harmful to health, e.g. tobacco, alcohol, etc.
→ Customs duty: A tax imposed by the government on goods imported from abroad. Customs duty is charged either in the form of a percentage of the value of the goods or as a specific duty according to the volume of the goods.
→ Demonstration method: The basic method of instructions for teaching skills type subject matter. This method is recommended for teaching a skill because it covers all the necessary steps in an effective learning order.
→ Socially disadvantaged group: A group whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.
→ Semi-finished goods: Products that have not been completely assembled or manufactured and usually sent to other departments for finishing and converting them into finished products.
→ Consumers’ education: Knowledge and necessary information given to the consumers to educate and guide them about their rights and duties, marketing procedures, quality standards, availability of credit, etc.
→ Education cess : Cess is an alternative term for a tax. The term ‘cess’ is still frequently used in a few countries including Britain and Ireland to indicate a local tax, Scotland, to indicate a land tax and India applied as a suffix to indicate a category of tax such as property cess, education cess, etc.
→ Income inequality: A considerable gap in the earnings of various sections of society. On one side we find a sizeable number of people earning say ₹ 20,000 – 30,000 per month and another class of people earning millions of rupees per month.
→ Entrepreneurship: The activity of setting up a business, taking on financial risk to earn profit.
→ Innovators: A person who introduces new methods, ideas on products.
→ Entrepreneurs: A person who sets up a business, taking on financial risk to earn profit.
→ Private enterprise: Business on industries that is managed by independent companies or private individuals.
→ Industrial Base: The part of a country or region that is involved in producing goods in large quantities in factories.
→ Freelancing: Freelancing is a self employed person who offers services, by working on several
jobs for various clients at one time.
→ Synthesis: The combination of components or elements to form a connected whole.
→ Hindrances: A thing that provides resistance, delay or obstruction to something or someone.
→ Parametry: A numerical or other measurable factor forming one of a set that defines a system or sets the condition of its operation.
→ Aggrandize: To increase the power, status of wealth. „
→ Incalculable: Too great to be calculated as estimated.
→ Pervasiv : Spreading widely throughout an area or a group of people.
→ Standardisation: The process of making something confirm to a standard.
→ Fatigue: Reduce the efficiency by prolonged activity. ‘
→ Micro finance: Micro finance is a category of financial services targeting individuals and small ‘
→Socio-Economic: Relating to or concurred with the interaction of social and economic factors. –
→Capital gain: A profit from the sale of property or an investment. x
→Incubators: A place, especially with support staff and equipment, made available at low rent to new small business.
→ Greenfield Enterprise: In infrastructure, the projects on the unused lands where there is no need .
to remodel or demolish an existing structure are called greenfield enterprise/project.
→ Collateral security: Collateral security is an asset which a borrower is required to deposit with or pledge to, a lender as a condition of obtaining a loan. It can be sold off if the loan is not repaid.
→ Moratorium period: A moratorium period is a time during the loan term when the borrower is not required to make any repayment.
→ Agritourism: Tourism in which tourists stay with local people in rural areas.
Entrepreneurship is a full time job which requires dedication and hard work. They are innovators, producers, owners, creators, etc. They are regarded as ‘fourth factors of production’.
- In the early 16th century, the term ‘Entrepreneur’ was used by Frenchman for men leading in military expeditions.
- In France, contractors or architects were called entrepreneur around 1700 AD.
- The French economist Richard Cautillon used this term for business and economic activities, in early 18th century.
- In 1848, the famous economist John Sturt Mill described ‘Entrepreneurship’ as the founding of a Private enterprise.
- In India, the industrial base of our economy was very poor at the on set of independence.
The industries were facing difficulties, like shortage of raw material, capital and marketing problems, etc. However, the Indian Government is considerably enhancing the ease of doing business.
The concept of entrepreneur differs from industry to industry, country to country and time to time. An entrepreneur is “a person who starts a business and is willing to risk loss in order to make money”. The common words ‘businesses’ and ‘risk’ are f interrelated. If there is no real business or risk, a
person cannot be called as an entrepreneur.
- The small businessman having a grocery shop or the founder of a laundry service across the street is an entrepreneur.
- The founder of the multi-billion companies like Reliance, Tata is an entrepreneur.
- The freelancing plumber, carpenter, electrician work for himself is also an entrepreneur.
The entrepreneurs are passionate to innovate, lead, invent or pioneer with a disruptive product or technology. The size of business, its type, his age, education, success, failure does not matter for a person to become an entrepreneur. They have courage to share an idea or a product and try to make market a better place.
- Webster dictionary gives a definition, “An I entrepreneur is a person who starts a business and is willing to risk loss in order I to make money.”
- The Oxford Dictionary defines “an entrepreneur is a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.”
Characteristics of an Entrepreneur-
- Intellectual Capabilities: An entrepreneur is a creative thinker with good intelligence. New innovative ideas are always floated by these people who have the ability of creative thinking.
- Future Vision: The entrepreneur has the ability of foreseeing the future market conditions. They can take appropriate decision by considering market situations and changes in market conditions. This enables them to take timely actions.
- Hard Work: Hard work is necessary in any type of venture or business activity to make it more successful. He is required to work more tediously, sincerely and seriously for long hours.
- Technical Knowledge: The entrepreneur should have adequate technical knowledge about the products, process, etc. He should also update his technical knowledge to understand latest changes take place in technology.
- Communication Skills: The entrepreneur should have good communicate skill and command over language he speaks. Good communication skill is important to convey ideas and influence customers, employees, creditors, etc.
- Highly Optimistic: To be successful, he should have positive thinking and approach in all the activities he undertakes.
- Risk- bearing capacity: He should be calculative in taking risk while facing challenges and seek more new opportunities.
- Self Confidence: He should be self confident to achieve his goals. He should keep himself motivated and confident to face various obstacles.
Qualities of a Successful Entrepreneur-
- Disciplined: An entrepreneur should have comprehensive strategies and tactics to accomplish the organisational goal. Successful entrepreneur is disciplined enough to take steps every day towards the attainment of his objectives.
- Confidence : An entrepreneur is confident with the knowledge that he will make his business succeed. He shows that confidence in everything he does.
- Open Minded: An entrepreneur has the ability to look at everything around him and realizes that every event and situation is a ‘business opportunity.’
- Self Starter: An entrepreneur is proactive, not waiting for someone to give him permission. For everything that needs to be done, he should start it himself.
- Competitive: An entrepreneur knows that he can do a job better than others. He needs to be competitive to win every game of the business.
- Creativity: An entrepreneur often comes up with solutions which are the synthesis of other items and thus find connection between unrelated events.
- Determination: An entrepreneur is determined to make all of their endeavours succeed, so will try and try again until it does. He is not backdown by defeats or not believe the something cannot be achieved.
- Strong Communication Skills: The entrepreneur has strong communication skills to sell the product and to motivate employees so as to expand and grow business.
- Strong Work Ethics: An entrepreneur’s mind is constantly on his work, whether he is in or out of the work place to ensure that an outcome meets his expectations.
- Passion: Passion to make business better is the most important quality of a successful entrepreneur. He loves his work because there is a joy that his business gives which goes beyond the money.
Functions of an Entrepreneur-
- Innovation: An entrepreneur is basically an innovator. He introduces new combinations of means of production, new products and makes changes in the existing products to satisfy his customers.
- Determination of objectives: An entrepreneur has to determine the aims and objectives of business and differentiate between primary and secondary objectives.
- Development of Markets: An entrepreneur has to find out different ways for marketing the products and services by conducting constant research to increase customers demand.
- New Technology: Everyday there is an invention of new technology in the global world. Introduction of new and advanced technology, scientific methods will always result in growth of business.
- Good Relations: Good and efficient relations between subordinates, superior and employees is necessary to maintain healthy working atmosphere in an organisation.
- Organising Funds: An entrepreneur needs to find out different financial resources because adequate and continuous finance is always necessary for every business.
- Taking Decisions: Timely and correct decisions are important and necessary for a proper business plan. He should always consider the pros and cons for taking any business decisions.
Entrepreneurship is a purposeful activity of an individual or a group of associated individuals undertaken to initiate, maintain and aggrandize profit by production and distribution of economic goods and services. It is a process of setting up a new organisation.
Characteristics of Entrepreneurship :
- Innovation: Entrepreneurship is an innovation in view of changing taste of consumers from time to time. Entrepreneurship focuses on the research and development to produce goods and services to satisfy the customers.
- Economic Activity: Systematically planned activities as per his skills and knowledge to satisfy the human wants and to earn a better livelihood is quality of an entrepreneur. Hence entrepreneurship is an economic activity.
- Organisation building: It is an activity place, time and form utility is considered under one roof.
- Creative Activity: Innovation and creativity in producing something new is a big challenge for the entrepreneur. It is an essential part of entrepreneurs.
- Managerial Skills and leadership : Leadership and managerial skills are the most important quality of an entrepreneur to be successful. He should lead, have more passion of doing something new than just earning profit.
- Skilful Management: With professional and skilled managers, entrepreneurship becomes a successful activity.
- Risk-Bearing: Uncertainty is the risk which cannot be insured against and is incalculable. Entrepreneurs are risk-bearing agents in production.
- Gap Filling Functions: It is the entrepreneur’s job to fill the gap or make up the deficiencies which always exists in the knowledge about the production function.
Process of Entrepreneurship Development –
(1) Training: As against traditional thought that entrepreneurs are born, modern ways thinks entrepreneurs can be made by education and training. Training is a scheme of instructions which is planned, systematic, consistent, pervasive and monitored to measure its effectiveness. It imparts knowledge of marketing of goods, production methods, consumer’s education, etc. Training teaches an entrepreneur for the latest development which can directly or indirectly affects him. By number of methods of training, efficiency of an entrepreneur can be increased.
(2) Entrepreneurship Development Programme (EBP): EDP is a device through which people with talent, entrepreneurial traits are identified, motivated to take up new industrial venture, trained in managing the unit and guided in all aspects of starting a venture/an enterprise. These programmes are designed to strengthen motive, capabilities and help to play his role efficiently.
(3) Steps in EDP:
- Arrangement of Infrastructure.
- Selection of potential entrepreneur.
- Identification of enterprise.
- Actual training program.
- Selection of training personnel.
- Selection of method of training.
- Actual training.
- Monitoring and follow-up.
(4) Objectives of EDP:
- To foster entrepreneurial growth in the country.
- Optimum use of available resources.
- Development of backward regions and improving economic status of socially disadvantaged groups.
- Generation of employment opportunities.
- Widening base for small and medium scale industries.
Recent Initiatives in Entrepreneurship Development –
Start up India :
Meaning : A start-up is defined as an entity having its headquarter in India, which was opened less than 10 years ago and has an annual turnover of less than 100 crores. Government want to encourage entrepreneurship and to promote innovations. The MUDRA Bank’s scheme, a scheme started by Government of India, in providing micro¬finance at low interest rates to low socio-economic background entrepreneurs. It was started in 2016 for economic growth and generate large scale employment. The Government has announced start¬up Indian Action Plan in following areas :
- Simplification and Handholding : Procedure for start up will be easy and winding up will be on fast track basis.
- Funding support and Incentives : Indirect participation by government in funding and tax exemptions will be allowed.
- Industry – Academia Partnership and Incubation : To introduce start up Fests, pre-incubation training, set up incubators, launch programmes for students.
Objectives of Start ups :
- ₹ 10,000 crore start-up funding pool.
- Reduction in patent registration fees.
- Improved Bankruptcy Code i.e. 90 days exit window.
- Freedom from mystifying inspections for first 3 years of operation.
- Freedom from Capital Gain Tax for first 3 years of operation.
- Freedom from tax for first 3 years of operation.
- Self-glorification compliance.
- To target 5 lakh schools, and involve 10 lakh children in innovation-related programmes.
- Encourage entrepreneurship within the country.
- Promote India across the world as a start¬up hub.
- Built Start-up Oasis as Rajasthan Incubation Center.
Stand-Up India scheme for financing bank loans between ₹ 10 lakh and ₹ 1 crore to at least one SC/ST borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise.
Following points to be learned:
(1) Objectives (2) Eligibility (3) Nature of loan (4) Purpose of loan (5) Size of loan (6) Interest rate (7) Security (8) Repayment (9) Working Capital (10) Margin money.
Agro Tourism (Rural Tourism)-
Meaning: Agro tourism is a commercial enterprise at a working farm, ranch, or agricultural plant conducted for the enjoyment of visitors that generates supplement income for the owner. Agro tourism provides a chance to reconnect with land and provide ‘hands on experience’ with local food to tourists.
Definition : “Agro tourism is the idea of bringing urban residents to rural areas for leisure travel and spending”.
Maharashtra is at the forefront in developing and promoting agro tourism in India. Agritourism is an activity which brings visitors to farm. It has grown in many countries of the world like Australia, Canada, US, etc. Business planning finding land, employees, record keeping, following regulations insuring crops, preparing for rainy day and its retirement all come under ‘Farm Management’.
Activities in Agro Tourism:
- Outdoor recreation.
- Educational experiences.
- Hospitality services.
- On-farm direct sales.
An intrapreneur is an employee who has the authority and support of his company/employer to implement his own innovative and creative ideas. The main difference between an intrapreneur and an entrepreneur is that, the latter takes financial risk while the intrapreneur does not have to invest his capital. Such innovative ideas may earn good profit for the organisation.
Gifford Pinchot ill, “Intrapreneurs are the dreamers who take hands-on responsibility for creating innovation of any kind, within a business.”